Divest from climate destruction & reinvest in climate resiliency
Divest resources from the extractive economy and reinvest in regenerative climate solutions, with non-extractive financing.
Moving capital out of extractive industries and institutions, and towards regenerative climate solutions is a crucial tactic for a just transition, whether that is on a local level, federally, or even between nation states.
In the last decade there have been thousands of fossil fuel divestment campaigns around the globe, from schools to churches to cities to individuals. Depending on the actor, “divestment” is a broad term that might refer to selling off stocks, screening investments through “fossil free” portfolios, switching away from private banks to credit unions, and other tactics.
Divestment policies should focus on starving extractive sectors of resources and safety nets. Specifics may include moving investments out of extractive industries and the banks that finance them, imposing taxes and fees on corporate polluters, and eliminating subsidies for dirty energy.
Like divestment, “reinvestment” is a broad umbrella term that includes many tactics to move capital towards just and equitable climate solutions. Divesting capital from extractive industries without reinvesting that capital in regenerative climate justice solutions is like building half a bridge–it won’t get us to where we need to be.
Revenue for reinvestment could come from moving private investment capital, issuing penalties and fees to large polluters, implementing progressive taxes, and directing public investments. New economy strategies, such as public banking and democractic community finance, can support economic democracy and the flow of regenerative capital towards community climate solutions.
Divest Boston; Source: facebook.com/bostonujimaproject
Divest public assets, institutions, and pension funds from the fossil fuel industry and other corporations built on environmental and social degradation, including private prisons and detention centers. Reinvest in community-owned just transition projects such as renewable energy, community-scale transit, local food systems, and other climate resiliency initiatives.
For example:
- Mazaska Talks is an Indigenous-led divestment campaign that emerged in solidarity with the Standing Rock Sioux resistance to the Dakota Access Pipeline. The campaign moved the City of Seattle to stop banking with Wells Fargo (though they eventually returned to lack of viable alternative banks). By the Spring of 2017, the campaign had organized $5 billion in commitments to be withdrawn from the banks financing DAPL and other fossil fuel infrastructure projects.
- Boston Ujima Project, Center for Economic Democracy, and other organizations within the “Reinvest Boston” coalition won a commitment from the City of Boston for move $150 million of its funds towards socially responsible companies. Furthermore, the city designated $100 million of its funds to be deposited in community banks and local finance institutions.
- Reinvest In Our Power is a collaboration between the Climate Justice Alliance, Movement Generation, and New Economy Coalition that supports divestment and reinvestment campaigns. They advocate for reinvestment that meets the following conditions:
- Shifts economic control to the people
- Democratizes the workplace
- Advances ecological restoration
- Drives racial justice and social equity
- Relocalizes most product & consumption
- Retains and restores culture and tradition
Create municipal or state-based fees on big corporations and corporate polluters that would then be invested in community-led climate justice programs. Decisions over investments would be governed by a board of designated community members.
For example:
- Portland Clean Energy Fund. “The Portland Clean Energy Fund will bring $54 to $71 million in new annual revenue for clean energy and clean energy jobs in Portland. Nonprofit organizations, alone or in partnership with for-profit companies, schools and/or other government agencies, can apply for grants from this revenue to weatherize homes, install solar and other renewable energy projects, provide job and contractor training, expand local food production and build green infrastructure in Portland. The revenue is raised by a new 1% business licensing surcharge on the Portland revenue generated by retail corporations with over $1 billion in annual revenue and at least $500,000 in Portland revenue.”
- Alliance for Clean Jobs and Energy: WA 1631 Would have required “major polluters like fossil-fuel companies to pay $15 for every ton of carbon dioxide they release into the atmosphere…to generate roughly $2.2 billion in its first five years. Initiative 1631 would then invest this windfall into a new fund to support projects that would accelerate the state’s transition away from fossil fuels, like public-transit development, energy-efficiency upgrades, and new wind- and solar-power plants. The fund would support other kinds of projects, as well. One-quarter of its revenue must be spent to protect forests and streams in the state. One-twentieth must directly flow to communities that stand to be hurt by either climate change or the transition away from fossil fuels.”
Freeze all fossil fuel subsidies and shift them towards climate justice programs.
The Federal Government gives away $15 billion in fossil fuel subsidies every year. Those subsidies must be eliminated and be rolled over into support for community-controlled renewables and climate resilient infrastructure projects.
Establish a Financial Transaction Tax
A Financial Transaction Tax, which is a micro-tax on financial transactions and high-volume speculative trading, can generate hundreds of billions in revenue towards renewable energy and climate adaptation initiatives.
For example:
- The European Union is considering a Financial Transaction Tax to resource meeting its Paris Agreement Climate Goals
Create zero interest and non-extractive loan platforms for direct investment into local green businesses and services
A just transition from an extractive energy economy to a regenerative energy economy must include non-extractive financing of community climate solutions.
For example:
- Climate Justice Alliance and Seed Commons: Our Power Loan Fund is a non-extractive loan fund governed by members of the Climate Justice Alliance, and supported by the Seed Commons Financial Cooperative. The fund resources just transition projects being built by communities at the frontlines of climate change and extractive industries.
- Community Sourced Capital was an effort in Seattle from 2013-2016 that organized 6,000 individual lenders and deployed $2 million dollars across 96 zero-interest loans to local businesses. The project drew on resources from the community and kept resources in the community.
Pay climate reparations to Global South nations
Global South nations have been colonized, occupied, environmentally degraded, and trapped in debt for centuries by high-polluting developed nations. These cycles of exploitation have allowed for the rapid extraction and burning of fossil fuels, leading to the current climate catastrophe. Furthermore, much of the Global South is intensely vulnerable to strengthening climate disasters due to weakened infrastructure and minimal resources for adaptation and recovery. Those nations and peoples who have been the least responsible for climate change are being the hardest hit by its impacts. Climate reparations are a necessity for climate justice.
Establish a Green Public Bank
Most major private banks including Wells Fargo, JP Morgan Chase, Bank of America, and others, actively invest in fossil fuel infrastructure development. To resource climate adaptation and just transition, we need Green Public Banks that are accountable to the public good, not private interests and profit.
For example:
- In Germany and Costa Rica, public banks have financed a number of green development initiatives. In the UK, they established a successful Green Investment Bank, before it was privatized in 2017.
- More: Democratize Finance, Euthanize the Fossil Fuel Industry
