A recent bill passed by the California legislature and signed into law by Governor Brown requires California’s public pension funds, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS) to withdraw their investments in thermal coal. Representatives for Environment California, which supported the legislation, hope to promote divestment among other cities and counties throughout the state of California.
The growing movement toward discontinuing the use of coal reflects an overall trend in California. Utilities have significantly reduced their use of coal as a result of its overall negative effects on environmental quality and public safety. The divestment from the fossil fuel industry by the largest public pension funds in the nation is viewed as issuing a strong statement about the state’s commitment to implementing legislation to combat climate change. CalPERS and CalSTRS are two of the 20 largest pension funds in the world, with $292 billion and $191 billion in assets, respectively.
The legislation mandates that the governing boards of the funds commit to the following actions: (i) divesting public employee retirement funds of thermal coal-related investments, (ii) rejecting new investments in thermal coal manufacturers, and (iii) liquidating current investments in thermal coal no later than 18 months after the statute goes into effect in relation to that coal company.
Coal, as a source of energy, is the leading cause of pollution and a major cause of global climate change. Coal plants are the primary producers of carbon dioxide emissions according to the United States Energy Information Service. On average, a coal plant in the United States produces 3.5 million tons of carbon dioxide per year. While significant coal emissions can be reduced with pollution control technologies, coal plants in the United States generally have not implemented the necessary infrastructure to decrease coal emissions.
Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about the practice.