Providence City Council passed a resolution 11-1 in June that committed the city to divestment from any of its holdings in the top 200 fossil fuel companies in the next five years, making Providence the first capital city in the United States to do so.
Councilman Seth Yurdin, Ward 1, lead sponsor of the resolution, said its passage stemmed from the City Council’s concern over the possible environmental dangers fossil fuels present.
“Climate change is probably the most important issue that everybody’s facing,” he said.
Divestment, which involves withdrawing current investments in fossil fuel companies and committing to discontinue the practice, is seen by many activists as a powerful way to stand up to the fossil fuel industry. Jamie Henn, co-founder and communications director of 350.org, an organization that runs worldwide campaigns to fight climate change, said that while divestment does not immediately hurt fossil fuel companies economically, it does send a political message.
Calls for divestment “show that (fossil fuel companies) are morally bankrupt,” he said.
These companies need to “keep roughly 80 percent of the current fossil fuel reserves … underground, in order to reach the target of keeping global warming below 2 degrees Celsius,” Henn said. They “exert a tremendous amount of power in Washington,” and divesting from them is a public way to challenge that power, he added.
The 350.org organization, which helped organize the grassroots campaign in Providence, operates off the motto “if it’s wrong to wreck the planet, then it’s wrong to profit from that wreckage,” Henn said.
Divestment is only “one of a number of tools” being used to respond to environmental concerns, said Yurdin, adding that the City Council has previously taken other sustainability measures, such as single-stream recycling and the creation of a sustainability director position.
“There’s a plan to deal with transportation. This place is small enough … you could often really not need a car here,” Yurdin said, indicating possible steps the council could implement in the future, such as a bike-share program.
The divestment resolution is still under review by the Board of Investment Commissioners, which is in charge of the city’s investments, Yurdin said.
Resolutions passed by the council are not binding, and final implementation decisions remain up to the Board of Investment Commissioners, which is chaired by Mayor Angel Taveras.
Yurdin said he was optimistic the resolution would be implemented, as the plan is already popular with board members. He added that the review conditions within the plan were included to allow for a sound financial strategy.
Divestment supporters such as Henn point to recent studies that suggest divestment from fossil fuels would not severely harm investment portfolios. The Aperio Group, an investment management firm in California, concluded that the risk of divesting from fossil fuels is “statistically irrelevant” in a 2012 report. Henn cited an Associated Press study that concluded divestment from fossil fuels two decades ago by institutions with large endowments actually would have increased current profits by millions.
350.org is currently working with 350 colleges and universities and 100 cities and states to promote divestment from fossil fuels.
Providence’s action “sends a powerful signal and helps bring other cities on board,” Henn said. “We need personal action, but we also need political action.”
As Rhode Island’s capital, Providence serves as an example to “provide incentive” for change in other parts of the state, Yurdin said.
Brown Divest Coal, a student group organizing for a Corporation vote on possible University divestment from coal, was not directly involved in the movement to divest Providence from fossil fuels. But Trevor Culhane ’15, a member of Brown Divest Coal, said the action “bolsters our campaign because Brown is a big part of the Providence community.”
“It sends a strong message that Brown should get on board with it,” Culhane said.
Brown Divest Coal does not have any current plans to push the University to divest from fossil fuels in general, Culhane said, adding that coal remains the group’s current focus.