The California Assembly passed a bill Wednesday that prompts the state’s public employee pension funds to divest from coal.
The bill passed the Assemby with a vote of 43 to 27, and will require the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS) — which combined are responsible for $476 billion in assets — to remove all holdings in companies that get at least half of their revenue from coal mining. The divestment would have to be completed by July 2017. If signed into law, the measure would be the first of its kind in the United States.
“Coal is the fuel of the past and it’s no longer a wise investment for our pensioners,” California assemblyman Rob Bonta, who presented the bill, said in a statement. “I’m pleased that my colleagues agree: it’s time to move on from this dirty energy source.”
California’s Senate President Pro Tem Kevin de León, who introduced the bill, also praised its passage.
“Coal is losing value quickly and investing in coal is a losing proposition for our retirees; it’s a nuisance to public health; and it’s inconsistent with our values as a state on the forefront of efforts to address global climate change,” de León said. “California’s utilities are phasing out coal, and it’s time our pension funds did the same.”
The bill now heads to Gov. Jerry Brown’s desk. The governor has been vocal about the need to act on climate change — he said in June that, when talking about climate action, “we are talking about extinction. We are talking about climate regimes that have not been seen for tens of millions of years. We’re not there yet, but we’re on our way.” The governor is expected to sign the divestment bill.
The bill’s passage comes soon before the expected Assembly vote on a broader package of climate bills. One of the four bills — SB 350, which was also introduced by de León — calls for a 50 percent reduction in petroleum use in the state’s cars and trucks, a 50 percent increase in energy efficiency in buildings, and a goal of 50 percent of state utilities’ power coming from renewable energy by 2030. Another, SB 32, would build on California’s climate change law by locking the state into a goal of reducing its emissions 80 percent below 1990 levels by 2050. These bills, which have gained praise from the White House as well as from economists and scientists, were passed by the Senate in June and are expected to be voted on by the Assembly in the coming weeks.
The signing of the divestment bill would also make California the latest state to acknowledge the claim that divesting from fossil fuels is an important part of addressing climate change. The divestment movement has been pushing schools, cities, states, and companies to purge their holdings of coal and other fossil fuels. So far, according to 350.org’s divestment project, nearly 400 institutions have committed to some form of divestment. Coal, however, tends to be easier to divest from than fossil fuels in general, because the coal market is struggling and because it makes up a smaller chunk of the market than oil and gas does.
“This is a big moment for California, and for everyone around the world standing up to the most powerful and destructive industry in history,” May Boeve, executive director of 350.org, told RTCC on Wednesday. “Today’s vote is so meaningful because it sends a strong message: political leadership on climate change means being willing to stand up to powerful moneyed interests, and call out the destructive practices of the companies causing the climate crisis.”