KLEIN AND MCKIBBEN COMMENT ON NEW YORK CITY DIVESTMENT AND OIL CO. LAWSUIT

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13 january 2018

The Politically Impossible Has Suddenly Become Possible

By Naomi Klein, The Intercept, via Reader Supported News, 13 January 2018

Five years ago, when 350.org helped kick off the global fossil fuel divestment movement, one of the slogans the team came up with was “We > Fossil Fuels.”

The T-shirts and stickers were nice, but I have to admit that I never really felt it. Bigger than fossil fuels? With their bottomless budgets? Their endless capacity to blanket the airwaves and bankroll political parties? The slogan always made me kind of sad.

Well, yesterday in New York City, listening to Mayor Bill de Blasio announce that the city had just filed a lawsuit against five oil majors and intended to divest $5 billion from fossil fuel companies, I actually felt it. After being outgunned by the power and wealth of this industry for so many years, the balance of power seemed to physically tilt. It’s still not equal — not by a long shot — but something big changed nonetheless. Regular humans may not be more powerful than the fossil fuel companies now — but we might be soon.

Within minutes of de Blasio’s announcement going public, activists in London started tweeting at their mayor to step up in equally bold fashion. And while the press conference was still streaming live, several of us started to get emails from city councillors in other cities around the world, promising to initiate a similar process in their communities.

Such is the power of an action emanating from a center as symbolically important as New York City: What felt politically impossible yesterday suddenly seems possible, and the dominos start instantly falling.

It’s also extremely significant that the divestment and lawsuit were announced in tandem — because they have the potential to reinforce one another in a kind of virtuous market cycle. Part of the reason why fossil fuel divestment has picked up so much momentum over the past two years is that fossil fuel stocks have been performing badly. This is mainly because the price of oil has been depressed, but it is also because of market uncertainty created by the increasingly powerful climate and indigenous rights movements, and the signing of the Paris climate agreement.

All of this has raised the question of whether fossil fuel companies are really going to be able to get their pipelines and other infrastructure built, given the strength of the opposition. And they have also raised the question of whether these companies will be able dig up the huge oil, gas, and coal reserves that are currently factored into their stock prices — or are these are going to become stranded assets? Right now, we don’t know the answers to these questions, and that uncertainty can give many smart investors pause.

(The Trump administration, by ditching the Paris Agreement and opening up vast new swaths of territory for exploration, has been trying frantically to reassure the markets by sending the opposite message — that it’s back to dirty business as usual.)

Now, with New York City’s lawsuit for climate damages, the market is confronting the prospect of a cascade of similar legal actions — cities, towns, and countries all suing the industry for billions or even (combined) trillions of dollars in damages caused by sea-level rise and extreme weather events. The more suits that get filed, the more the market will have to factor in the possibility of fossil fuel companies having to pay out huge settlements in the near to medium term, much as the tobacco companies were forced to in past decades.

As that threat becomes more credible, with more players taking New York City’s lead, the investor case for dumping these stocks as overly high risk will be strengthened, thereby lending a potent new tool to the fossil fuel divestment movement. A virtuous cycle. Oh, and the more we are able to hit the industry in the pocketbook, the less likely costly new drilling and pipeline projects will be to go ahead, no matter how many precious national parks and pristine coastlines the Trump administration attempts to desecrate. If the economics don’t make sense, the drilling simply won’t advance.

That’s why New York’s actions are so significant, not just in New York or the United States, but globally. (It’s also why I got so cranky with the New York Times for treating it like a minor municipal event, buried on page 23.)

Yesterday was a big, good day for the planet – and we needed one of those.

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New York City Just Declared War on the Oil Industry

By Bill McKibben, The Guardian via Reader Supported News, 13 January 2018

The home of Wall Street announced on Wednesday that it will be divesting its massive pension fund from fossil fuels. That hits fossil fuel giants where it hurts


ver the years, the capital of the fight against climate change has been Kyoto, or Paris – that’s where the symbolic political agreements to try and curb the earth’s greenhouse gas emissions have been negotiated and signed. But now, New York City vaulted to leadership in the battle.

On Wednesday, its leaders, at a press conference in a neighborhood damaged over five years ago by Hurricane Sandy, announced that the city was divesting its massive pension fund from fossil fuels, and added for good measure that they were suing the five biggest oil companies for damages. Our planet’s most important city was now at war with its richest industry. And overnight, the battle to save the planet shifted from largely political to largely financial.

That shift had been under way for a long time, of course. The divestment campaign, which my organization 350.org helped launch, has become the largest of its kind in history, with now more than $6tn in endowments and portfolios divesting in part or in whole from coal, oil and gas.

Smart money has been pouring into renewables; dumb money has stuck with fossil fuel, even as it underperformed markets for the last half-decade. Just two months ago Norway’s vast sovereign wealth fund began to divest, which was a pretty good signal: if even an oil industry stalwart thought the game was up, they were probably right.

But New York is different, and that’s why its decision signals the start of a real rout. For one thing, of course, it’s the center of world finance – you could toss a chunk of coal from the mayor’s press conference and hit Wall St. Its money managers have a well-deserved reputation for excellence, so when city comptroller Scott Stringer said divestment was necessary to protect the retirement savings of city workers, he implied the obvious: the go-along investors thinking that Exxon is still a blue-chip aren’t doing their homework.

Many pension fund administrators and institutional trustees have refused to divest because they say they’d rather “engage” with oil companies and get them to change their ways. But New York called out that sophistry on Wednesday too. For all the “climate risk disclosure” and token investments in renewables that the industry promises, it’s clear that nothing is really changing with their business model.

Indeed they’ve doubled down in recent weeks, using their political clout to convince Washington that they should be allowed to drill in wildlife refuges and winning the right to put up platforms along every American coast. Someday New Yorkers may stand on the Battery and stare out at Lady Liberty lifting her torch – and then on into the distance where a giant drilling light is flaring gas into the night sky.

But of course when New Yorkers stand at the Battery they should probably be looking down – at the narrowing gap between the top of the water and the top of the seawall. In the end, that’s the real bottom line.

New York and most of the world’s other great cities aren’t viable if the sea keeps rising: they will be destroyed. And New York, for one, isn’t taking it any more. It’s going to use its considerable power to try to hold the oil companies accountable.

That includes taking them to court. Journalists have done a superb job over the last three years of exposing the truth: companies like Exxon knew everything there was to know about climate change decades ago.

But instead of ’fessing up, they covered up, funding the massive campaigns of denial that ended with Donald Trump in the White House convinced climate change was a Chinese hoax. It seemed like a great strategy at the time, buying the fossil fuel companies more years of record profits. But now it exposes them to vast, essentially infinite levels of risk. Who isn’t going to sue? Who wants to be the chump?

The industry’s irresponsibility (a kinder word than it deserves) has cost us a crucial quarter-century when we could have been taking on this crisis. New York’s action on Wednesday means, finally, that these companies are being called to account. Let’s hope it’s not too late.

13 January 18


The home of Wall Street announced on Wednesday that it will be divesting its massive pension fund from fossil fuels. That hits fossil fuel giants where it hurts


ver the years, the capital of the fight against climate change has been Kyoto, or Paris – that’s where the symbolic political agreements to try and curb the earth’s greenhouse gas emissions have been negotiated and signed. But now, New York City vaulted to leadership in the battle.

On Wednesday, its leaders, at a press conference in a neighborhood damaged over five years ago by Hurricane Sandy, announced that the city was divesting its massive pension fund from fossil fuels, and added for good measure that they were suing the five biggest oil companies for damages. Our planet’s most important city was now at war with its richest industry. And overnight, the battle to save the planet shifted from largely political to largely financial.

That shift had been under way for a long time, of course. The divestment campaign, which my organization 350.org helped launch, has become the largest of its kind in history, with now more than $6tn in endowments and portfolios divesting in part or in whole from coal, oil and gas.

Smart money has been pouring into renewables; dumb money has stuck with fossil fuel, even as it underperformed markets for the last half-decade. Just two months ago Norway’s vast sovereign wealth fund began to divest, which was a pretty good signal: if even an oil industry stalwart thought the game was up, they were probably right.

But New York is different, and that’s why its decision signals the start of a real rout. For one thing, of course, it’s the center of world finance – you could toss a chunk of coal from the mayor’s press conference and hit Wall St. Its money managers have a well-deserved reputation for excellence, so when city comptroller Scott Stringer said divestment was necessary to protect the retirement savings of city workers, he implied the obvious: the go-along investors thinking that Exxon is still a blue-chip aren’t doing their homework.

Many pension fund administrators and institutional trustees have refused to divest because they say they’d rather “engage” with oil companies and get them to change their ways. But New York called out that sophistry on Wednesday too. For all the “climate risk disclosure” and token investments in renewables that the industry promises, it’s clear that nothing is really changing with their business model.

Indeed they’ve doubled down in recent weeks, using their political clout to convince Washington that they should be allowed to drill in wildlife refuges and winning the right to put up platforms along every American coast. Someday New Yorkers may stand on the Battery and stare out at Lady Liberty lifting her torch – and then on into the distance where a giant drilling light is flaring gas into the night sky.

But of course when New Yorkers stand at the Battery they should probably be looking down – at the narrowing gap between the top of the water and the top of the seawall. In the end, that’s the real bottom line.

New York and most of the world’s other great cities aren’t viable if the sea keeps rising: they will be destroyed. And New York, for one, isn’t taking it any more. It’s going to use its considerable power to try to hold the oil companies accountable.

That includes taking them to court. Journalists have done a superb job over the last three years of exposing the truth: companies like Exxon knew everything there was to know about climate change decades ago.

But instead of ’fessing up, they covered up, funding the massive campaigns of denial that ended with Donald Trump in the White House convinced climate change was a Chinese hoax. It seemed like a great strategy at the time, buying the fossil fuel companies more years of record profits. But now it exposes them to vast, essentially infinite levels of risk. Who isn’t going to sue? Who wants to be the chump?

The industry’s irresponsibility (a kinder word than it deserves) has cost us a crucial quarter-century when we could have been taking on this crisis. New York’s action on Wednesday means, finally, that these companies are being called to account. Let’s hope it’s not too late.


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