Joining 17 other American cities, including Washington, D.C.; San Francisco; Seattle; and Ann Arbor, Michigan, New York City announced its $187 billion pension funds will divest $5 billion of fossil fuel investments. In addition, the Big Apple is joining Oakland and San Francisco, California in suing the five leading fossil fuel companies — BP, Exxon Mobil, Chevron, ConocoPhillips and Shell — for their central role in adding greenhouse gases to the atmosphere. According to NYC city government, the city is seeking billions to “protect New Yorkers from the effects of climate change” — covering both funds that have already been spent in the wake of Hurricane Sandy to make the city more resilient and expected future expenses, which are expected to be upwards of $20 billion.
At a press conference, Mayor Bill de Blasio said “we’re bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect their profits. As climate change continues to worsen, it’s up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient.” A recent report found just 100 companies are responsible for 70 percent of the world’s greenhouse gas emissions, with the five identified in NYC’s lawsuit as the largest historic emitters.
Some argue New York City’s action is important and will lead other major cities to follow the same path.
Bill McKibben, head of 350.org, told the The Guardian: “New York City today becomes a capital of the fight against climate change on this planet. With its communities exceptionally vulnerable to a rising sea, the city is showing the spirit for which it’s famous – it’s not pretending that working with the fossil fuel companies will somehow save the day, but instead standing up to them, in the financial markets and in court.”
And Jeffrey Sachs, a leading economist and professor at Columbia University, said: “This is a really big deal. Pension funds of other major US cities will follow, I think. New York is the neighborhood of the very big money managers. It’s a powerful, personal signal to them that they cannot keep funding the sorts of projects they have in the past.”
But business groups like the National Association of Manufacturers (NAM) think these “hyper-political” moves are a “fundamental waste of the court’s time and the taxpayer’s resources.”
According to Crain’s New York Business, NAM senior vice president Linda Kelly argued cities can’t sue energy companies for their role in climate change because “a 2011 Supreme Court decision determined carbon-dioxide emitters cannot be declared a ‘public nuisance,’ as the federal Clean Air Act pre-empts such claims.”
However, San Francisco and Oakland, which filed legal actions against oil companies in 2017, have “sought to sidestep the 2011 ruling by pointing to swelling ocean tides, not greenhouse gases, as the relevant public nuisance.” And New York City is also focusing on the impact of sea level rise and increased flooding and the high cost of coastal resilience efforts.
Beyond divesting by city governments, major universities like Johns Hopkins University, Yale University, Stanford University, and the University of Massachusetts have also committed to stop investing in coal or oil companies. And under pressure from students, Harvard University has also agreed to “pause” investment in fossil fuel companies.
Still, US universities are far behind UK universities in their pledges. As of August 2017, Times Higher Education reports that some $112 billion has been divested by universities globally, with more than half of that coming from UK universities.