A new report out today concluded what anybody with common sense would imagine – selling out of oil and gas would cost the Colorado Public Employee Retirement Association, or PERA, between $36 million and $50 million per year if it was to divest fully from fossil fuels. And PERA doesn’t really have any wiggle room regarding returns.
But that won’t stop radical environmental groups like 350.org from pushing for divestment.
The report was commissioned by the Independent Petroleum Association of America and was conducted by three economists – Professor Daniel Fischel at the University of Chicago Law School as well as Christopher Fiore and Todd Kendall of economic consulting firm Compass Lexecon.
Here’s what Fischel said about the study:
“Our research shows that large pension funds stand to lose a substantial amount of value if they decide to adopt a divestment policy. The energy sector plays an important role in diversifying a given portfolio, so eliminating that exposure means higher risk and reduced returns to the tune of millions if not trillions of dollars over an extended timeframe. These types of costs leave pensions to make a hard choice: reduce pensioner benefits or increase contributions from taxpayers to the fund.”
But it’s good to know where 350.org stands on the issue. Apparently, it’s more important for these radicalists to get their way than for state employees to have secure retirements. That’s our takeaway, anyway.