April 22, 2024
Investments

House bill on divesting coal investments would align Treasury holdings with other state initiatives – Oregon Capital Chronicle


The Oregon State Treasury has hundreds of millions of dollars invested in coal but the Clean Oregon Asset Legislation – or COAL Act – would clean up those holdings. 

House Bill 4083 would encourage the Treasury to stop investing in coal, phase out existing coal investments and report on this progress. Rep. Khanh Pham, D-Portland, is championing the bill in Salem alongside a large and growing number of legislative co-sponsors. It is due for a vote Thursday in the Emergency Management, General Government and Veterans Committee.

In the past two years, Divest Oregon has seen a groundswell of support for this kind of legislation, including among tens of thousands of Public Employee System beneficiaries who are worried about climate change and its financial impact on their retirement. They know that coal is a losing bet in the long term: The world is shifting to clean energy and coal demand is expected to decline.

The COAL Act would mark a small step to address the concerns about fossil fuel holdings, while building on what our Treasury is already doing. In early February, Oregon Treasurer Tobias Read unveiled his Pathway To Net Zero” plan which is aimed at reducing greenhouse gas emissions created by firms in which the Treasury is invested. 

The COAL Act codifies one element of the Treasurer’s net-zero plan by moving away from one of the worst emissions contributors as soon as possible. We know the burning of coal is a public health and climate risk as well as an immediate financial risk. Cleaner and more cost-effective technologies are already available. Wind and solar are now the cheapest sources of energy generation in most of the world.

Analysis shows that the Treasury’s investments in coal have underperformed in the past eight years. That underperformance will most likely accelerate in the years to come. Not acting urgently will expose the portfolio to stranded assets such as coal resources that cannot be burned and their related losses in value.

There is support and precedent for this bill. Treasurer Read testified in support of the COAL Act in a recent House committee hearing on the bill, and the COAL Act is based on a previous 2005 Oregon law on the removal of investments in Sudan that undermined human rights that  the Treasury implemented successfully. Almost a decade ago, the California State Assembly mandated coal divestment from its state employee pension funds and CalPERS, California’s public employee retirement system, showed a positive impact of hundreds of millions by divesting. 

Climate change is one of the greatest challenges of our time, which also comes with serious financial risks requiring urgent action. Read stated in his net-zero plan that the impacts of a changing climate pose risks to supply chains, threaten property and transportation infrastructure, force insurance companies to pull out of entire geographic areas and disrupt commodity markets. As Read said, climate change will affect our investments. The question is when and how.

Oregon has been a leading state in responding to climate change by enacting greenhouse gas reduction goals through government action and legislative action. Although Oregon is behind on aligning the Treasury with these initiatives, this bill will allow us to start playing catch-up. 

Passage of the COAL Act would be a critical first step to protect PERS and the environment we all share. 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

SUBSCRIBE TO OUR NEWSLETTER

Get our latest downloads and information first.
Complete the form below to subscribe to our weekly newsletter.


100% secure your website.