Opinion: Fossil fuel divestment spells crisis for pensioners and taxpayers
As Gov. Gavin Newsom pushes an “inflation relief” plan that would actually worsen the inflation problem, Sacramento is waging another war on fossil fuels that the state can ill afford.
If the Fossil Fuel Divestment Act becomes law, CalPERS and CalSTRS will join the University of California and Cal State University pension systems in fully divesting from fossil fuels. They will also be prohibited from making new investments in fossil fuel companies. In the annual Unaccountable and Unaffordable report, ALEC uses more prudent and conservative assumptions to calculate total unfunded liabilities. At $1.5 trillion, California is higher than any other state and up $145 billion since last year’s report. The nationwide total for all 50 states is more than $8.2 trillion.
Much of the funding problem stems from making political crusades, such as Environmental, Social, and Governance practices, the primary goal of investing. Although Senate Bill 1173 is the most recent divestment bill, CalPERS and CalSTRS have been allowing politics to dictate investments for the past 20 years. In that time, these funds have divested from tobacco and firearms, for example, and restricted plan managers’ ability to invest in fossil fuels.