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The Oregon Treasury Department could soon sell up to $1 billion in stock held in companies that mine and burn coal.
House Bill 4083The law, also known as the COAL Act, directs the Treasury Department to sell the state’s $94 billion Public Employees Retirement System (PERS) of its holdings in publicly traded companies that derive more than 20% of their revenue from coal production. That’s what you do. Additionally, restrictions will be placed on new investments in such companies.
The Senate Energy and Environment Committee passed the proposal on a 3-2 party-line vote led by Democrats on Tuesday, sending it to the full Oregon Senate for a vote that has not yet been scheduled. The bill has already passed the Oregon House of Representatives. It also has the backing of Oregon State Treasurer Tobias Reid, who ends his final term as the state’s chief investor this year and plans to make PERS investments net-zero by 2035. is suggesting.
The COAL Act is sponsored by Rep. Khan Pham (D-Portland), who has been working for three years to pass legislation that would limit fossil fuel investments in PERS to address the threat of climate change and financial risks. . In her earlier testimony, she referred to coal as a “stranded asset.”
“Solar energy and wind energy are now cheaper, cleaner, and growing so fast that keeping 99% of the country’s coal-fired power plants running requires a completely new supply of wind and solar energy in the near future.” It’s more expensive than building a power plant,” she told colleagues at a hearing on the bill last week.
In 2001, coal was the largest source of electricity in 32 states. According to the U.S. Energy Information Administration, only 15 states still get most of their electricity from coal. Most have moved away from coal, primarily burning natural gas (methane, which is almost entirely a fossil fuel), and relying on renewable sources such as wind and solar power.
investment income
About 75% of all benefits paid to PERS retirees come from Treasury investment income, the agency said. Currently, more than 160,000 PERS retirees receive an average of $34,000 annually from the fund.
About half of the $94 billion PERS fund is invested in private equity funds and real assets, including investments in infrastructure, commodities and natural resources. Private equity assets are overseen by state-hired investment managers, and little is shared publicly about the companies within these portfolios. However, the other half of PERS consists primarily of investments in publicly traded companies. Up to $1 billion of that money is invested in companies that mine and burn coal, according to Divest Oregon, a nonprofit environmental and justice coalition.
Under the COAL Act, the Treasury Department would be directed to sell its holdings in publicly traded coal mining and energy companies and limit new investment in those companies.
“Net Zero” plan
I read it earlier this month presented a plan It has been submitted to the Oregon Investment Council to begin the process of reducing the carbon footprint of PERS holdings to “net zero” by 2035.
This does not mean divesting fossil fuel-holding funds completely, but rather reducing and absorbing carbon-intensive industries and those that are reducing or absorbing emissions, or working to do so by 2035. This means striking a balance with investment in industry.
Since 2019, Reed and the Investment Council have doubled PERS investments in renewable energy from nearly $370 million to $717 million, still less than 1% of the fund’s overall investments. Over the same period, we reduced our fossil fuel investments by about $100 million, but fossil fuels account for a much larger share of the overall PERS portfolio than renewables. More than $3.5 billion has been invested in fossil fuels, representing about 3.7% of total funding.
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