California leaders can begin a historic economic transition from risky fossil fuel investments towards a high-employment, low-polluting economy based on renewable resources and energy efficiency. A possible initiative to divest public funds from coal and fossil fuels while also reinvesting in clean energy is being carefully considered as the new legislative session nears.
On the surface, the prospects are uphill. California public pension funds have at least $17 billion invested in profitable fuels like coal, oil, natural gas, or the sources of spiraling levels of greenhouse gas emissions. The University of California Regents recently rejected a divestment proposal from student environmental activists. California pension fund trustees generally oppose such initiatives.
But the ground is shifting steadily.
Stanford University stands out among major campuses for having decided to divest $18.7 billion of its endowment funds away from coal-mining corporations. States and municipalities have lagged far behind, although divestment bills have been introduced in Vermont, Maine and Massachusetts.
California has a previous history of national leadership in triggering divestment from South African apartheid and the cancer-causing tobacco industry. With the eighth-largest economy in the world, California now can shake the foundations of the fossil fuel industry and stimulate new clean energy investments simply by a public signal that the shift is beginning.
California leaders can propose a Stanford-like divestment from coal combined with a more gradual path away from increasingly risky fossil fuel investment to a clean energy alternative.
The actual content of the initiative might be the subject of in-depth public hearings and debate across the state, with the full engagement of labor, financial investors, renewable industries, faith communities, and activist networks like the UC Student Sustainability Coalition and 350.Org who helped initiate the demand for a fossil-free future.
Coupled with Governor Jerry Brown setting significant new emission reduction goals and implementing $21 billion annually for California's clean energy programs, a divestment/investment strategy might be a notable California contribution to global leadership in the international climate talks.