President Trump faces a new challenge from city governments. These are the cities where many progressives live and feel powerless to challenge the Trump administration’s new anti-environmental policies. Their solution is to inventively use the tools that are available to them.
They are taking a lead in defunding the Dakota Access Pipeline by using tactics that Trump’s federal powers cannot quash as his administration is attempting to do with sanctuary cities protecting undocumented immigrants.
An effort is unfolding to go after the banks that are funding fossil fuel climate change. Each city has public funds that need to be deposited in a major bank to allow a daily shifting of revenues and expenses. They also have a need to deposit their pension funds in a bank. This is a local decision and not one the federal government could halt.
Some cities are focusing on divesting from Wells Fargo. According to the Securities and Exchange Commission the bank has supplied $347 million in credit to the companies building the pipeline and administers an additional $3.7-billion line of credit to help the project.
On February 7th, Seattle terminated its $3 billion relationship with Wells Fargo in large part because it has been funding the Dakota Access Pipeline. A few days afterward, Davis in California cut ties with Wells Fargo, as had Santa Monica just before it.
Very likely most big banks serve corporations that despoil the earth. However, cities should consider taking a useful tactic that unions applied for decades in successfully negotiating better wages and working conditions for autoworkers: they focused on just one company at a time not all of them at once. After they succeeded in bringing one of the big four auto companies to an agreement the other companies usually followed, knowing what they faced. The same tactic could be applied to divesting from banks by choosing to go after Wells Fargo first through identifying those cities that use its services. Another key targeted bank would be lined up after concessions have been wrung from Wells Fargo.
Attention is also being focused on public money held in pension funds for city employees. These funds seek stability. Divesting from fossil fuel investments not serves to help address climate change but it also is a more responsible approach to safeguarding pensions.
Seattle’s Pension Retirement Board began looking at what the possible consequences of divesting from fossil fuels would be after the city council adopted a resolution to support such an approach. A letter to the mayor, city council and the retirement board signed by local politicians, church and community groups was presented on the 15th of February, it asked the city to proceed with the following actions:
- Stop any new investments in the top 200 fossil fuel companies,
- Drop coal, oil and gas from its investment portfolio by divesting from the top 200 fossil fuel companies by 2020,
- Commit to reinvesting at least 5 percent of its portfolio into climate solutions defined as, but not limited to, renewable energy, energy efficiency, clean technology, community adaptation funds, transit, and clean energy access.
This approach makes financial sense. A report commissioned by 350.Seattle showed the City of Seattle losing over $65 million by remaining in fossil fuels in the last ten years. Meanwhile, the Gates Foundation has lost billions by remaining invested in fossil fuels in recent years. A combination of the Gates Foundation’s losses on fossil fuel investments and the public outcry for fossil fuel divestment resulted in them divesting 85% of their fossil fuel holdings from a starting point of $1.4 billion in 2014.
Community organizations, like DivestYourCity have begun to identify cities to join in withdrawing their business from banks funding the North Dakota Pipeline. Those in favor environmental protections, who live in cities and feel unsure how they can impact national policies that are beyond the control of their local governments, need to look at their own tool shed and see how previous uses of these tools, like the use of public funds, can be handled in a manner that can have a national impact.
This strategy augments resisting Trump Administration’s policies by pursuing actions that are beyond the reach of the federal government. Then, let President Trump spend his twitter time trying to resist it.
