by Joseph Perkins | May 30, 2014 12:44 pm
The scene brought to mind Tom Wolfe’s essay “Mau Mauing the Flak Catchers,” which was published all the way back in 1970, when young Jerry Brown was a member of the Los Angeles Community College Board of Trustees.
Wolfe’s non-fiction essay was set at San Francisco’s Office of Economic Activity, where government functionaries – flak catchers – kowtowed to community activist types issuing one demand or another.
Fast forward to the recent meet-up of the University of California’s Board of Regents at the Sacramento Convention Center.
Outside the meeting room, a few dozen student activists from a group that calls itself Fossil Free UC noisily demanded that the regents – latter day flak catchers – divest the system’s $7.7 billion general endowment fund of fossil fuel investments.
The regents responded to being mau maued by Fossil Free UC’s student activists by expressing empathy with the group’s cause, which regent Norman Pattiz declared “valid.”
Regent Jerry Brown, now the governor of course, went so far as to say he was amendable to “some targeted disinvestment” in fossil fuels, with coal being at the top of the hit list.
Indeed, Brown and his fellow regents tasked managers of the UC endowment fund to prepare an analysis by July of the financial consequences of dumping the fund’s coal equities. Depending on the findings, the regents could act at their September board meeting in San Francisco.
Fossil Free UC’s organizer, UC Berkeley student activist Ophir Bruck, said his group is “excited about” the prospect that the regents will vote to disinvest in coal. However, he added, the ultimate goal is complete disinvestment in fossil fuels. Or, as the group’s website states, “to remove the fossil fuel industry’s social license to operate.”
This is a common meme among disinvestment groups. For example, urges We Are Power Shift, a climate-change group, “Divestment is an opportunity to expose the real financial liability of investing in a company, country, or industry, and to remove the financial support that enables that them to operate according to business as usual.”
However, the global reality is that fossil fuels are as vital as ever. China and Russia just signed a $400 billion natural gas deal. And since 2010 China, not the Unites States, has been the world’s largest manufacturing economy, a position it keeps expanding. Anything done by the UC Regents might only free resources to be used by China.
It remains to be seen if the UC regents bow to Fossil Free UC’s demands. According to UC reports, the school’s general endowment has holdings in 67 of the 2,000 largest fossil-fuel reserve firms. If the endowment sold off all those holdings, it almost certainly would incur substantial losses.
As UC regents consider whether to disinvest in fossil fuels, they should consider the last time they made a politically-driven investment decision. It was in 2001, when they voted to sell all of UC’s tobacco-related holdings. As a result of the regents’ decision, UC lost a whopping $500 million in potential gains between 2001 and 2012.
UC can hardly afford to repeat that expensive mistake when it comes to fossil fuels. But if that does happen, the ultimate victims could be the students, who might face higher tuition or, for poor students, a reduction in scholarships.
Source URL: https://calwatchdog.com/2014/05/30/column-uc-regents-urged-to-divest-in-fossil-fuels/
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