Pages

Tuesday, April 22, 2014

What Wasn't Said About Fossil Fuel Divestment

Venice Beach Back in the Day
Yesterday, KCRW's Which Way LA? aired a segment on the student campaign to divest from fossil fuel companies in its endowment and pension fund.  Pretty much, everyone said what you would expect.  It came down to students wanting to save the planet vs. a finance type who said that constraining investment choice could produce suboptimal returns.  What wasn't discussed was the politics of investing in someone's pet project or divesting from someone's disfavored project.  UC has sometimes gone in that direction so it is already on a slippery slope.  But the more it goes towards a social-political portfolio, the more it invites such departures from standard investing.  The pension plan in particular is underfunded and UC is trying to get the state to recognized its liability for the plan.  Regents are the trustees of the pension fund on behalf of retirees and future retirees.  Moves that invite thinking that the funding of the plan is someone's political toy are not helpful in persuading the state to take responsibility.  Moreover, exactly where the governor stands is unclear.  Brown is taking heat from environmentalists who think he is too friendly to fracking.  However, Brown sees that states with lots of fossil fuel production are benefiting from the revenues and economic stimulus that come, or could come from a production boom.  He is worried about future revenues for the state when Prop 30 expires.  He is looking for funding for his high-speed rail plan.  Remarkably, none of this was mentioned in the broadcast. 

You can find a link to the broadcast below.  Slide to around the 5 minute mark to hear the fossil fuel segment.

No comments: