The District of Columbia Council is currently considering a proposal to divest from fossil fuel companies and bar any future investments in these industries. This legislation, to its proponents, sounds like a solid piece of attainable environmental action. But the clear reality is that this is nothing more than an ideological smokescreen capable of spurring no real change whatsoever -- and with very real economic consequences.
Environmentalists pushing the proposal say it will help fight climate change. But this is not completely true. Their argument hinges on the premise that if we divest from fossil fuel industries, these companies will be forced to change their spending habits.
But fossil fuel companies are part of a vast, international industry. The spending habits of one city, or even 10 or 20 cities, will do nothing to these companies’ bottom line, and, as a result, will do very little to change their spending habits. Perhaps even more importantly, such policies will do nothing to change the global demand for the energy these companies produce.
The divestment proposal is a prototypical “feel good” policy. Those who vote to pass it through legislation will feel as if they have taken a stand, when in reality, they have simply undermined the financial standing of their residents, weakened pension funds, and darkened the retirement outlook for thousands of employees. There is a reason why this legislation has been shot down by most cities and institutions: It is detrimental to the local economy and does nothing to help the environment.
Oil and natural gas companies tend to have a very profitable return on their investment, meaning our city’s teachers, policemen and firefighters, as well as city projects, are given a secure future. A recent study found that, when compared to other industries, fossil fuel companies average seven times greater return on investments than other companies. This is a staggering return, providing a solid justification for investing in these companies.
By totally abandoning investments in fossil fuel companies, the legislation will reduce the standard of living for many city residents by threatening the health of their pension fund without actively helping the environment.
Environmental issues are often looked at — justifiably so — as a global issue. And environmentalists who support this proposal have framed the discussion as an environmental discussion. Any realistic observer, though, must recognize that the issue at hand is decidedly local. It’s about one city stepping out on a limb that others have stayed away from and eschewing the overriding financial responsibilities of elected office in favor of rhetoric.
Council members are elected to serve our city. Activists espousing misguided rhetoric must not be allowed to derail them from carrying out this task. We need to take the conversation back from national environmentalists and refocus the debate.Norris McDonald is an environmental activist and president of the African-American Environmentalist Association, founded in 1985. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link.