A bill has been filed in the state legislature that, if passed, would make Massachusetts the first state in the country to divest its public pension fund from the fossil fuel industry.
The bill, S.1225, is sponsored by Sen. Benjamin Downing (D-Pittsfield) and calls for the state to gradually divest its pension fund holdings from fossil fuel companies. Specifically, the Act would direct the fund managers to cease any new investments in fossil fuels and divest 20 percent in holdings in fossil fuel companies each year over five years, so long as the aggregate value of the fund does not drop more than .5 percent as direct result of divestment.
Massachusetts currently has close to $1.4 billion invested in fossil fuel companies out of a pension fund with a total value of $54 billion, according to Sen. Downing.
“We know that at some point these investments in fossil fuel companies will not get a good return,” the senator explained. “At some point what will get a good return is investments in the clean energy economy and we want to haste that.”
Sen. Downing said he decided to file the bill last year having followed the divestment debate on college campuses and in other institutions over the past 12-18 months. He did a little bit of his own research into past divestment campaigns and wanted to see how divestment could fit in with Massachusetts’s efforts to address climate change. “I became convinced that divestment was one of many tools that we could use as a state to make the transition to a clean energy economy,” he said.
Divestment has been used as a tool in past struggles against oppressive regimes and industries such as apartheid in South Africa, tobacco companies, and the Iranian nuclear weapons program. In the current struggle against the fossil fuel industry, a handful of colleges have already committed to divest, including Hampshire College in western MA, and so have over a dozen cities including Northampton, MA, which just two weeks ago voted in favor of divesting.
Now, Sen. Downing’s bill aims to make Massachusetts the first state to commit to divest from fossil fuels.
According to the senator, although this bill does raise awareness about the urgency of addressing climate change, the strongest argument for the bill at this point is economic and financial.
“I think if we want to protect and fully fund the pensions that we promise to teachers and firefighters and state cops, the smartest thing we can do is stop relying on returns in profits from fossil fuel companies, because we know that if we’re going to be serious about climate change, those companies aren’t going to get profits from oil and coal and gas in the future,” the senator explained.
State House hearing
Sen. Downing brought this argument to a Public Service Committee hearing at the State House on Tuesday, September 10.
“If we want to protect our state’s pension, and if we want to protect the pensioners and retirees who depend on it to give them the security and stability that they deserve, then we need to transition as quickly as possible away from relying on fossil fuel companies,” Sen. Downing said during his testimony.
Sen. Karen Spilka (D-Ashland) also voiced her support for the bill at the hearing. “I’m proud to have been one of the original sponsors of the Global Warming Solutions Act…and I would be proud to be one of those members to vote in favor of making Massachusetts the first state to divest from fossil fuels in our pension.”
She emphasized that state pension investments should not conflict with the state’s goals and principles. “Our pension should reflect our values. Investing in Big Oil is counterintuitive to the ambitious goals we have set for ourselves as a state to halt the climate crisis.”
“I’m concerned as a mother,” Sen. Spilka continued, “I’m concerned for the fate of my children and hopefully eventually my grandchildren, and by divesting we are demonstrating a commitment to being the leader in halting climate change.”
Hundreds gather before hearing
The hearing on Tuesday was preceded by a rally in front of the State House organized by the group 350MA. Over 200 people turned out to hear from a series of speakers and enjoy a few musical performances.
“We know right now that investing as usual is complacency. We know that the only responsible thing to do right now is to divest, and if we don’t divest, that complacency will leave us on its path to destruction,” said Jay Carmona, divestment campaigner for the international climate organization 350.org.
“I’m here today because I’m scared for our future, I’m scared for my future,” Varshini Prakash, a student at UMass-Amherst and leader in their campus divestment campaign, explained to the crowd. “But my fate does not rest in my hands. It is entrusted to the people seated in the State House behind me. My future is entrusted to the Commonwealth of Massachusetts, it is entrusted to each and every one of you, because the work we do today will dictate how I live my life 50 years down the road.”
Prakash eloquently pointed out that when it comes to climate change, “We have the choice to stop it, and consequently defend future generations from strife, hunger, and a collapsing world. Or we also have the choice to blindly embezzle from our future.”
“Massachusetts, you are at a crossroads!” she exclaimed in closing. “Which path will you take?”
“Massachusetts is a Commonwealth, a Common Wealth, our wealth is in the common good, not in the greed of the shortsighted,” Rev. Fred Small explained to the crowd. Rev. Small is Senior Minister of First Parish Cambridge, which has already committed to divest.
“Our government is in a chokehold by the most powerful lobby in the history of the planet,” he continued. “But divestment is getting their attention. We know that money talks – we’re proving that money listens.”
Sen. Downing also spoke at the rally, pointing out that despite Massachusetts’s ambitious efforts to tackle climate change through advancing clean energy and energy efficiency, those initiatives become “cancelled out” so long as the state continues to invest its pension fund in fossil fuels.
“The most powerful part of the political process is each and every one of you,” he went on to tell the spirited crowd gathered in front of State House. “You all have the power to make sure that Massachusetts is a leader on this issue, and any number of different other issues…I look forward to walking with each and every one of you and being here on the day that the governor signs that bill into law and [makes] Massachusetts the first state in the nation to divest our pension funds from fossil fuels!”