As we witness the heartbreaking human suffering wrought by Hurricane Harvey and experience record-breaking heat waves at home and abroad, we are once again reminded of the vital need for a vast cultural shift in humankind’s relationship with the planet. It is time for the San Francisco Employees Retirement System (SFERS) to stop dithering on climate change and move its money out of the volatile fossil fuel industry. Like the fox guarding the hen house, our pension fund oversight body has prioritized the diminishing returns of dirty energy investments over a portfolio that reflects San Francisco’s role as the national standard-bearer for decisive environmental action. As the Trump Administration rapidly dismantles years of environmental protections and accelerates the climate chaos that, in recent weeks, has inundated Houston and the Gulf Coast, covered one third of Bangladesh in flood waters and bombarded Nigeria and the western coast of India with torrential rains, the SFERS Board continues to deny that public investments have anything to do with humanitarian catastrophes caused by global warming.
The source of our troubles is a vicious cycle that is scientific canon: The burning of fossil fuels emits greenhouse gases that trap the earth’s heat in our atmosphere and raise global temperatures. Glaciers melt, and their waters swell our oceans. The earth’s warmer atmosphere absorbs greater amounts of evaporation. Increased moisture in our atmosphere creates massive storms, like Harvey, Katrina and Sandy. These storms arrive with greater frequency and increasing catastrophe. Meanwhile, earlier snow melt and increased evaporation and transpiration create a higher risk of catastrophic drought. These phenomena are linked to human behavior, and in order to prevent further climate disruption, we must limit the burning of fossil fuel, keep the sources of carbon in the ground and shift entirely to renewable sources of energy.
In spite of the clear evidence of humankind’s impact on climate change, Big Oil continues to lead a climate change denial campaign, fueling fake news with dark money to mislead the public and protect its wealth. Even a recent op-ed in the San Francisco Examiner — “Divesting would bring SFERS high costs, no rewards” — cites a years-old Compass Lexecon report that claims that divestment could result in an $11.5 million annual loss to the retirement system.
For some perspective, the bare minimum cost of reinforcing The City’s seawall in anticipation of rising tides is an astonishing $5 billion. Unfortunately, the authors failed to disclose (and for that matter, the Examiner didn’t mention) that Big Oil paid for their “study.” That’s right: The Compass Lexecon report was commissioned by the Independent Petroleum Association of America, comprised of members of the very industry the study serves to protect.
Big Oil’s fake news has been published everywhere, from the Wall Street Journal and on Fox News, in an attempt to shame public education institutions and retirement funds for taking prudent steps to diversify their portfolios in the booming clean energy sector. Even so, the divestment movement continues to gain steam. As of August 2017, 747 institutions and 58,000 individuals across 76 countries had committed to fossil fuel divestment to the tune of $5 trillion. Locally, the San Francisco Board of Supervisors has been unwavering in its resolve, voting unanimously in 2013 to urge full divestment from fossil fuels. In spite of the turpitude of our current Commander in Chief and the absurdly well-funded Koch Brothers’ campaigns to crush the divestment movement, California has rebuked the federal government and reaffirmed its commitment to the Paris Climate Accord.
Meanwhile, in the lead-up to Hurricane Harvey, few noticed that Donald Trump and his administration of Big Oil beneficiaries were deliberately cutting some of the very regulations on refineries and public infrastructure that would limit the catastrophic effects of climate disruption on our communities. Last month, Environmental Protection Agency Director Scott Pruitt eliminated a rule requiring refineries to limit toxic emissions during the shutdown and start-up of refinery operations. In August, Transportation Secretary Elaine Chao stood next to Trump in his gold-leaf tower and revoked Obama-era rules requiring infrastructure projects to factor in scientific projections for the effects of climate change.
Not to be outdone, a majority of the SFERS Board still clings to fossil fuels, at the insistence of their Chief Investment Officer — The City’s highest-paid employee at more than $500,000 — who glazes over diminishing returns on the fossil fuels portfolio since The City unanimously urged divestment in 2013. The public isn’t buying it. It’s beyond time for SFERS to fulfill its moral and fiduciary responsibility and avoid The City having to bail out the fund for SFERS’ refusal to enter into a new era of sound public investment for the greatest good. And if there’s not enough political will to convince SFERS to divest on its own accord, let’s ask the voters to weigh in on the June 2018 ballot, so we can show in no uncertain terms that the people of San Francisco would rather fully divest from Big Oil than wait to see what happens if we don’t.
Aaron Peskin represents District 3 on the San Francisco Board of Supervisors and the North Central Coastal Zone on the California Coastal Commission. John Avalos is a former San Francisco supervisor and former chair of the Climate Protection Committee of the Bay Area Air Quality Management District.