Fossil Fuel Divestment Talking Points

DivestNJ Coalition

350NJ-Rockland, NJ Sierra Club, Environment NJ, Food and Water Watch, Climate Mama, Green Faith, NJ Sustainable Business Council

Climate Change Is A Crisis

• The UN Intergovernmental Panel on Climate Change has determined that we have twelve years to dramatically change the way we live if we are to avoid climate catastrophe. The 2018 US National Climate Assessment confirms that the impacts if we do not stop climate change will be devastating.
• 2015 to 2018 were the four hottest years on record. The sea level around New Jersey is already rising and we are experiencing more dangerous weather events (Irene, Sandy, Harvey, Irma, Maria, California fires).
• Scientists warn that if we reach a tipping point (estimated at an increase of 1.5C), huge parts of the planet will become uninhabitable, there will be extensive hunger, there will be millions of climate refugees, and there will be mass extinctions. In many countries, climate change  is already driving people off of their land and creating scarce resources.  
• To avoid climate catastrophe 80% of all known fossil fuels must not be burned. Oil, gas and coal companies already have five times that much in reserve.
• The situation is urgent: indeed, some scientists think that we have already passed the point of no return.

Why Divestment?

• Divestment campaigns have been successful in the past. Divestment helped end apartheid in South Africa in the mid-1980s.  Other divestment campaigns include tobacco and private prisons which focus attention on these socially offensive investments.
• Continued investment in fossil fuels is financially irresponsible (see below).
• Divestment appropriately stigmatizes the fossil fuel industry for its culpability in the climate crisis, and will eventually break the hold that the fossil fuel industry has on our government.
• Divestment is a material risk and can make it harder for companies to get financing for expansion projects.
• Divestment is a leadership statement: it generates greater awareness by the public and it inspires action by more institutions and individuals.

Fiscal Responsibility

• The state has a fiduciary responsibility to protect the retirement funds from risky investments. Fossil fuel investments are risky now because:
• The world transition to renewable energy is accelerating rapidly.  Renewable energy is already less costly than fossil fuel energy.
• The energy sector is significantly lagging the rest of the financial markets. It was the worst performing sector of the S&P in 2018. There may be temporary upticks but the long term prospects are dimming.
• It is estimated that $1 trillion in oil reserves and $300 billion in natural gas reserves will become ‘stranded assets’ and need to be written off resulting in enormous loss of value.

Why New Jersey?

• The Trump administration is filled with climate deniers, has withdrawn from the Paris Accord and is rolling back federal climate protections.  New Jersey and all states must take the lead since the federal government has abandoned its responsibility.
• Governor Murphy ran as a climate champion, with a goal of 100% renewable energy by 2050. He is also the Chair of the Delaware River Basin Commission (DRBC) and is pushing the other three states (NY, PA, DE) for the commission to ban fracking in the Delaware River Basin.
• In April 2018 the NJ state legislature passed three bills which (1) increase the amount of renewable energy the utility companies are required to acquire to 35% by 2015 and 50% by 2030  (2) boost the target for solar energy through 2021 and set up a community solar program (for non-homeowners to access) and (3) provide offshore wind energy with tax breaks and training for workers. With these goals and mandates, why would the State Investment Council (SIC) want to continue to invest in fossil-fuel energy? The State Investment Council must align its investment policy with the Governor's and the state legislature’s mission.
• NJ's pension is the #49th most underfunded pension in the country. This makes it all the more critical that the State Investment Council makes prudent and responsible financial and fiduciary decisions for the pension.  The fossil fuel energy sector is no longer a reliable Blue Chip investment.  In 2018, this sector was the worst performing in the Standard & Poor's 500 dragging down the profitability of the entire portfolio.  And the outlook for fossil fuels is decidedly negative given the increasingly competitive renewable pricing and transition to Electric Vehicles (EVs.) 
• New Jersey is very vulnerable to climate impacts, with sea level rise threatening lives, property, tourism, transportation networks, and fresh water aquifers. Rising temperatures will cause agricultural disruption, harm to our forests, and grave health impacts to residents. Extreme weather events will routinely batter us (think Superstorm Sandy, which has been estimated to cost NJ over $29 billion), costing our residents precious tax dollars that should be going to fund our pension fund.  
• Divestment would build on New Jersey's legacy as a climate leader. Under Governor Corzine the state legislature passed the Global Warming Response Act in 2007 to reduce greenhouse gas emissions. But Governor Christie gutted the reporting requirements and diverted allocated funding. New Jersey can once again offer leadership to the country by becoming a climate leader through divestment.