I’d be curious to know what green / sustainable / climate investments CalPERS has identified that give them confidence that they can achieve the IRR needed to meet or exceed their pension obligations.
i really don't thing this is the same. part of investing in sustainable solutions is for one's own existence. second, sometimes only large funds like this have the money to invest in certain technologies. it might take 20 years to pay off, but it could have a fantastic return on investment after that.
reminds me of the beginning of casino, where only the teamsters could put together enough money to fund a huge casino. now $70 million for a brand new casino seems like a joke.
>part of investing in sustainable solutions is for one's own existence
Irrelevant to the incentives to the rating agencies.
>only large funds like this have the money to invest in certain technologies.
Again irrelevant, but also just wrong. Care barely even begin to describe how wrong this is. It's ignorant of how money pooling and funds work.
>it might take 20 years to pay off, but it could have a fantastic return on investment after that.
Ahh long time horizons and losing money for a long time. I'm sure Uber and Facebook were funded by the government then?
No only the government, and bureaucratic pension funds from California apparently, could fund investments into projects that lose money over 20 years to appease their constituents.
if the rating agencies don't have anything to rate, they're not going to exist. the world changes too.
nuclear fusion is not funded by peter thiel. there is a difference between the history behind "oppenheimer" and making pizza delivery or taxi rides more efficient to order.
either a half trillion dollar pension fund agrees with me, or you're the only smart person on the internet and me and calpers are wrong.
oh man you're fucking impossible to have a conversation with. you really think peter thiel is responsible for fusion? if a donate a few bucks to the salvation army, i dont tell people "i've funded the salvation army."
you're intentionally misunderstanding what i'm saying because...i dont know you don't want people investing in sustainable tech? like i think you mostly understand how all of these things work, but it seems like you're missing some of the key information.
tell me a little bit more about why you think ratings agencies will give good ratings to bad investments for sustainable technologies the way the did for mortgages?
>you really think peter thiel is responsible for fusion?
No, but pension funds are not doing grant research investments either so I'm certainly operating in the correct sphere of comparison. You are miles off target with your implications.
>you're intentionally misunderstanding what i'm saying because
Because you are operating in an area where you do not have sufficient knowledge or at the minimum vocabulary to communicate as if you do so.
>i dont know you don't want people investing in sustainable tech?
They absolutely can and should, but pensions are required to operate their investments at very safe low risk technologies. Sustainable tech is novel and should be prices outside their regulatory limits.
>why you think ratings agencies will give good ratings to bad investments for sustainable technologies the way the did for mortgages?
The massive demand driven by ESG style initiatives beyond the scope of products at the appropriate risk. There are more buyers as the risk profile drops. As the gap between products and demand grows so will the temptation to price incorrectly will.
The mortgage demand was much more pure greed than 'moral'. Pensions wanted higher returns similarly pushed for more product than existed.
The common theme of excess demand for products runs through both.
Climate risk also is treated by individuals on varying spectrums of 'intentionally ignorant to it's existent' to 'quasi-death cult we're all dying tomorrow'. If one or more rating agency has been staffed with many on the death cult area of that spectrum they might believe is morally imperative to get these investments out to firms. The raters are aware of the thresholds for pension funds etc to lend.
My big worry is that this will just be another FTX situation. In the last few years, we saw so many bubbles pop. I'm not excited to see big funds rush in to inflate another one.
So in 6 years they’re going to transform about 25% of their holdings. I think it’s great the public employees of CA are going to put their money where their mouths and votes are and double down on climate tech.
It should be noted that the underfunding is largely related to those who got into CalPERS before 2012. They adjusted the defined benefit payouts to more realistic percentages for those who got in after 2012, like me, we are considered PEPRA (Public Employee's Pension Reform Act). We are aware of the unfairness, but we know it can't go on like it used to.
What's happening now is that the grandfathered CalPERS people are working together to maximize their benefit payouts at retirement at the expense of PEPRA workers. At a recent agency I worked at, many seniors retired since pandemic, including department directors. Instead of promoting lower ranks, they've been consolidating the higher ranks into the remaining seniors, like having the same director for IT & Finance, vs having two, but that person gets like a 50% pay increase. CalPERS payout is based on highest average annual compensation during any consecutive 12-month or 36-month period of employment. This is creating an incentive for the grandfathered to overinflate their pay before they retire, so that they can milk retirement funds even more before the gig is up. Taking on two director positions is an insane amount of work though, so guess who gets to pick up that slack? Yup, all the PEPRA workers. Just another example of how the younger generations are getting screwed, but we keep getting blamed for everything.
I don't THINK this is specific to either CalPERS or PEPRA, here in Iowa we have IPERS and there are always old folks scooping up all the overtime in their last two or three years for the exact same reason.
Pretty bummed out to see someone with 35 years experience picking up 400-500 hours of overtime in the year.
> It's especially rampant in public safety, amongst fire and police workers.
There was a big paper thing a couple of years ago where some journo figured out that like the top 10 OT workers in the police were getting something like 75% of all OT hours to the point some were working 100+ hour weeks consistently. I believe right after the Chief started putting caps on the number of hours able to be worked per week(because if you work 80 hours of special OT how focused are you gonna be at your standard 40?).
The problem was as soon as they did that there started to be a huge rash of police details not getting filled at all. So the weekly caps started getting relaxed back until there effectively stopped being caps again once everybody forgot about it.
Don't tell me they didn't invest in Chinese banks chasing return and currying favor....maybe this is backfill for when that (publicly) becomes a smoking hole
I can’t say the recent run of solar and wind companies, nor the way California runs its public utilities, would give me much confidence this will turn out good from a retiree perspective. Sure hope they don’t torpedo hundreds of thousands of people’s 401(k) for this initiative
They don't care. They also don't invest in guns or tobacco either. A few other industries too I believe. Their investment decisions are based on politics, not what is best for people relying on their pension (like me). I'm sure most redditors agree with that approach but only because California is doing it. If Texas was doing it this sub would call it criminally negligent to consider politics in investment decisions.
Edit: Guys if climate solutions aren't political then it doesn't matter which political party we vote for regarding the climate, right? Can't have it both ways.
You’re arguing with teenagers who think that they’re right so there’s nothing to discuss. Ergo it’s “not political, just “reality.”” It’s as dumb as it sounds.
The suggestion that climate solutions is political is frightening. The planet is dying and we wanna dig in our heels depending on which side of the aisles you identify with.
It isn't as much the problem thats political. It's how big the problem is and what to do about it. This is a totally separate issue from the investment decision in this post, but climate change is absolutely political in many ways. I paid 8 cents for a bag yesterday. Soon my state won't allow the sale of new gas vehicles. These solutions may work or they may not. But it isn't hard to see why these sorts of policies might cause political division.
Consider it this way: PG&E has had a revolving door of failed leaders and is responsible for a raft of wildfires due to their antiquated, barely maintained equipment in the field. Is punishing PG&E and forcing them to adhere to stricter safety guidelines political? Or is it just California trying to keep a sloppy, irresponsibly greedy utility from burning up the state?
Doing something about a threat isn't political. Doing nothing isn't political. It's suicidal.
I'm not arguing one way or another. I'm just saying there is a scale to how big people believe this problem is. Some think we're already screwed, some think we have 10 years, some think we have 100, and some think we'll adapt and it will never really be a problem. The fixes are debatable as well. How much responsibility does the individual bear? How much should the government do? How much money should we spend? Whose money should we spend? How do we measure that any of this is working anyway? And who's to say the government is being honest? In my state, WA, there is a lawsuit from a former state employee right now against the state stating that he was forced to lie about the effects of climate policy. There is so much more to this topic than "the climate is a big problem." Even if every single person agreed it was a problem, there is the endless fighting over what to do about it.
a) pension funds are long term investments. They don't necessarily look at quarterly or even yearly profit, but 10 years windows of potential growth.
b) If the pension fund manager sincerely believes climate change is gonna ravage the planet then it would actually be prudent to divest from things like Oil or gas and invest in alternative energy like Solar, wind, or nuclear.
It is a sad state of affairs where something like "you should listen to experts" statement can hinge on what political party you follow.
I think every human being has an obligation to do the ethical thing in whatever situation they're in, for a large portion of all philosophical systems. Creating certain classes of "exempt" human activity is why we're in the situation we're in and why we keep getting into trouble. This goes from the 1930's and 40s German soldiers who were "just following orders" to game companies who make addictive games for kids to CEOs who suddenly cut out everyone but shareholders as stakeholders in their company. They used to quite literally make decisions that would not harm their workers because of the workers.
The codification of psychopathy in business is a relatively recent phenomenon and I wish people could see past it. There is no real justification for it. Somebody said "shareholder supremacy" and waved their hand and that was it.
Similarly the thought-terminating cliché of "just a political opinion" has been thrown about in the several years for everything all the way to our most basic human rights. You cannot tie your shit opinion up in a bow and tag it political and demand respect for it.
> The suggestion that climate solutions is political is frightening.
It shouldn’t be. It’s political because it’s essentially the tragedy of the commons, which is a social and political problem not an economical one.
Economically, it will always be preferential to share your costs with everyone while keeping the benefits to yourself. This is avoided through social and political venues.
We could just universally decide on our own to stop using fossil fuels. And we could socially ostracize anyone who does, so that they are pressured to stop using fossil fuels too. But at the scale of the world/country, it’s much more efficient to address the issue politically instead of socially.
Precisely. This is why the recent moves at the global scale (Paris Conference, for example) are so frightening. They declare basically that despite being the World's largest polluter, China doesn't have to do anything whatsoever. This is amazing for China, who get all of the benefit while being the black lung of the entire planet.
If we cared about a solution, then we would be working hard to reduce pollution from everywhere. The accords target America and the west, as they should. Fortunately, The emissions of America and Western Europe have actually declined so much since 2010 that it actually more than makes up for the modest gains in South America, India, and Africa; just considering those areas, the world's emissions would be falling, as we would hope.
Sadly, China's emissions have simply exploded in the same time, while for example being the most significant place where emissions increased during the COVID lockdowns (they decreased almost everywhere else).
If we care about solving the problem, we need to have the entire world on board.
If you don’t think “climate solutions are political” then let me decide what you get to consume for the rest of your life.
I’ve decided that you having a car, using air travel, and using electricity produced by fossil fuels is destroying the climate. Since you gave me a blank check, it is now illegal for you to do these things. Good luck.
I can’t roll my eyes any harder. Humanity has overcome far worse. We will overcome this. How best to use limited resources is a cornerstone of politics. Some really crazy climate activists believe we should give up air travel and the internet and medicine and insulated homes and children and all the other things which contribute to global warming. While it would solve the problem, it would also result in a terrible quality of life for humanity. We need to balance the costs with the benefits. Politics is negotiating where that place is.
>Some really crazy climate activists believe we should give up air travel and the internet and medicine and insulated homes and children and all the other things which contribute to global warming.
We do not have to give up most of these things. Most of the world has these things and contributes far, far less to warming than larger nations do.
Look, I kinda agree with you - I think nuclear annihilation is probably the most urgent/worst threat humanity has ever faced, but climate change is probably pretty close. Just because the consequences are decades in the future doesn't mean it's not dire.
The consequences have been “decades in the future” since this hysteria really gained stream decades ago.
Climate change is real and we’ll see small increases in temperature but it isn’t the apocalypse and the harm caused by such change is tiny in comparison to the gains from fossil fuels. The previous century saw 40-80 million die from famine… in China alone! Famine mortality is trivial now by comparison.
War and economic and political mismanagement are far, FAR bigger threats than a couple of degrees of climate change.
>The consequences have been “decades in the future” since this hysteria really gained stream decades ago.
Decades ago? Climate change has been a significant policy point since maybe the Kyoto Protocol in the late 90s. It's been at most 30 years since it became heavily politicized, despite small mentions of climate change prior to that.
And... we're starting to see consequences of climate change. We've already seen an increase in global temperatures by 1.8 degrees. Sea level rise rates have almost doubled in the past 30 years. Flooding has become more common in the US, as have droughts. Hurricanes are measurably stronger. Wildfires are more frequent.
Based on your response here, I'm having a hard time believing you've spent much time looking at this issue. For example:
>we’ll see small increases in temperature
is really underselling what climate change will bring. Small temperature increases will mean that Nebraska/Iowa will feel like southern Texas did over the past 20 years with moderate emissions. Under a high emission scenario, North Dakota and NYC will be experiencing south Texas temps by the end of the century. Map to demonstrate.
But temperatures aren't the only impact of climate change. Parts of the midwest will see moderate (5-20%) increases in crop yields, but much of the south and southeast (Texas, Oklahoma, Kansas, Arkansas, etc.) will see crop yield drops of ~40-75%. More frequent hurricanes and sea level rise will cause hundreds of billions of dollars of damage in the Gulf Coast. Again, map to demonstrate.
Water scarcity is also a large issue being driven by climate change. The impact to the US economy due to mass migration caused by water stress is potentially massive. Article discussing this with some handy maps as well.
The impacts due to climate change aren't just temperature increases, but more frequent damaging climate events like hurricanes, redistribution of/increase in scarcity of water, increased climate refugee activity, etc.
>harm caused by such change is tiny in comparison to the gains from fossil fuels
Fossil fuels have certainly given huge gains to humanity, no doubt. But saying that the gains are huge relative to the consequences isn't backed by any sort of data, because it can't be. Fossil fuels are like taking out debt - it certainly increases quality of life today, but it comes at a later cost that we will pay back. Only, we don't know the interest rate on that debt, because we don't know how long the effects of climate change will last or whether they'll eventually be reversible. We could have had ~250 years of advancement (industrial revolution to now) paid for by fossil fuel use, but the consequences of that usage might last for 500, 750, 1000, or more years - we have no idea - or it could quite literally drive us into eventual extinction. Would 250 years of advancement outweigh extinction of humans, in the extreme scenario?
>The previous century saw 40-80 million die from famine… in China alone!
Oh, come on. Surely you cannot be using famine in China caused by Mao's mismanagement of agriculture as proof of fossil fuels' benefit to society. Lack of fossil fuels isn't what caused those famines.
Again, I agree that fossil fuels have benefitted us, significantly. But you must weigh that benefit against the very long term cost of them.
>War and economic and political mismanagement are far, FAR bigger threats than a couple of degrees of climate change.
No. They're more immediate threats. But they're much less likely to kill the amount of people that climate change will likely kill over the long run. If you only consider your and my lifetimes, then you'd be right. But climate change will affect us, will affect our children even more than us, will affect their children even more than us, and so on. The problem is compounding.
How about this, we run a tally of lives lost due to war/economic mismanagement/political oppression v lives lost due to climate change for the next hundred years and see what happens? Hell, I’d run it for a thousand years or 10,000 years but we’ll be dead by then.
Surely you can’t lose. I’ll give you great odds! I’ll even give you a handicap… say, I’ll give you a free 100,000 deaths?
Or hell, let’s keep the bet super limited. I bet that crop yields in Kansas will not drop by 50% over the next 50 years. Want to take that bet? I bet that global crop yields will go up over the next century.
What? It's happening RIGHT NOW. A suburban subdivision near me burned down in a wildfire, two of my coworkers lost their homes. Miami floods every time the tide comes in. Lakes Powell and Mead will likely never fill again, and we're not sure where the water to keep LA and Phoenix running will come from. The nation of Tuvalu is being EVACUATED because the sea is rising up over it. The immigration crisis at the US southern border is very much exacerbated by the chronic drought in central America, we have literal climate refugees on our doorsteps and you think this is a problem for later?!
Wildfires, droughts and floods have happened for all of human history. Somehow we’ve managed.
LA, Vegas and Phoenix are all in deserts. Yet somehow everyone in the city has water. And will continue to have water through the power of engineering.
“Climate refugees” is straight up fiction. Nearly all so-called “refugees” to the US are economic migrants (seeking better wages) or political migrants (fleeing oppression, like in Venezuela) or a mix of both. No one is fleeing because of weather changes, that’s absolutely fucking ridiculous.
> The previous century saw 40-80 million die from famine… in China alone! Famine mortality is trivial now by comparison.
What do you think will happen when crop yield is severely impacted by a changing climate? When the AMOC collapses and weather patterns in different parts of the world change rapidly?
Well let’s see, crop yields have continually gone up for decades despite climate change.
I expect this trend to continue.
I expect the apocalyptic predictions by doomers to continue to be wrong, as they have been for decades.
I expect gradual increases in emissions as the rest of the world industrializes and lifts itself out of poverty. Then, when their economies are more mature, gradual decreases in emissions.
The predictions have been accurate. Just because you extremists think scientists saying hey we'll reach x point in a decade, being correct, then saying hey we need to change y in a decade, nothing gets done, then saying if we continue down this path, we'll reach z point in a decade... Means predictions are wrong, doesn't mean they are.
You anti science extremists just can't comprehend anything more complicated than "should I get coke or pepsi.", Thank goodness your evil ideology is dying off.
He said that humanity has never overcome a greater threat than climate change and I said that is hysterical.
What argument are you looking for exactly? For one thing, it’s a subjective opinion. For another thing, if you think that climate change is the greatest threat in the history of the world, you are hysterical. End of story.
The government should be investing in climate solutions. A pension fund should not care, especially since it is at least 20% underfunded as it is.
If climate solutions weren't political everybody would be in agreement and there would be no issues, right? Just because you don't want it to be political doesn't make it reality.
People aren’t in agreement because of bullshit politics. Climate change science has the gold standard of science — there’s nothing political about climate change. Morons made it political
Again, I bet if Texas was betting its pensioners financial future not based on the best returns but based on politics you would think that is evil. It's not just climate stuff if you want to pretend that is not political; its guns, tobacco, etc too. That philosophy is what I am criticizing.
I’m criticizing the philosophy of letting people change reality based on their feelings that go against established facts. I don’t care they think it’s political. It’s not. It’s stupid of people to let them.
It is political though. Political doesn't mean it doesn't matter or that it's partisan, It means the decision is made not necessarily on purely economic ground.
There are a host of different solutions that have both tradeoffs and disproportionately effect different groups. Of COURSE that is political. Why wouldn't it be?
Imagine 10 people on a boat, and 4 have to jump off and drown to save the other 6. That would definitely be political, and is a good parallel to the situation we are in globally.
Why do I have to say this 5 times? Just because you don't want it to be political does not mean it is not political. What is so hard to grasp about that?
Even if everyone agreed to never burn carbon again we still have to figure out how to allocate resources, making it political again. You far left people whining about how it shouldn't be political must have a really hard time in life if you can't accept that simple reality.
It’s partially political but if you look at where capital and R&D is flowing it is clearly the future of energy/tech and thus where the returns will be.
Great, if that is true, then there’s no need for a quota. If those are truly the best investments then capital will continue to flow there.
But for some reason they decided to put a quota, suggesting that even if they DO determine that such investments provide an inferior return that they will continue to put money into them. Which sounds like a breach of fiduciary duty to me.
I think the rationale goes that “fossil fuel companies will go out of business in a few decades so we shouldnt invest in businesses likely to die”. Whether that is true in anyway remains to be seen.
That should be part of the decision on a security by security basis. You can make a good investment on a company that's going to go out of business if you buy it at the right price. If fossil fuel companies have a decade or two left but sell at a low PE and pay a handsome dividend then they are still a good investment. One of the biggest misconceptions people have investing is that companies or sectors need to do well in order for you to do well on your investment. It's all about the price you pay.
Making a sweeping statement like this is political.
I'm sure there are many very good projects. I'm 99% sure we will fund the projects that politicians kids are involved in instead. If the projects could stand on their own merits they wouldn't need this.
That argument about politicians children is just pure speculation and based on nothing. If you disagree with the decision then fine, but your just speculating with no facts to back it up
No, its based on how the big round of green funding from Obama all went to firms connected to politicians relatives. Remember all the jobs that were promised from that? Where are they?
You realize plenty of projects that are profitable and do not need subsidies still raise money from VC and Pension funds…right? You do realize the petroleum industry is still heavily subsidized…right?
This is an economics sub. If you want your misinformed opinion validated go to one of the political subs.
lol, What does any of that have to do with a public pension fund making investment decisions based on politics instead of investment returns? I know I triggered you somehow, just not sure how.
I don’t think any public pension in the u.s. actually plans/believes in future solvency. That is for the central government to fix in the future . That is for taxpayers without pensions to worry about.
Yes, they are insured. That is exactly the problem. Organizarions made pension commitments then under funded those plans. When they fail, the insurance pays. Very similar to what happened in 2008 with banks. But much larger.
https://www.pbgc.gov/
Do you think the Federal Pension Benefits Guarantee Corporation has the reserves required to bail them out when TSHTF? Nope.
Pensions are fine. Irresponsible pension fund management is not. And they won't end up picking up the tab. Again.
They have thought about that. They have thought about what it means to Karen and Kyle who work for the public to have their pensions evaporate; and they have thought about all ensuing consequences of forcing Paul and Penny Private Industry to pay up a 2nd time. They, have. Rest assured.
I know there was CalPERS funding invested in a development I worked on recently. The building had to meet certain sustainability and performance goals, and they would review the documents we provided to the developer. I’m assuming they’ll get a portion of tenants rent or a portion of the sale of the building
Renewable investments including wind turbines can offer utility type returns, solar can also do the same. Leasing home battery systems offer returns; investing on n all of the manufacturing companies also provides green returns
You could search across Europe, the wind generation systems are viable. Companies invest across solar in australia which is also viable. Companies install solar on domestic and commercial buildings and give a % of sales etc. there are so many models you don’t have to look far.
US. And man, all I’m asking for is one name to support your statement. You’re the one who made it. My hypothesis is that there really aren’t any at all that would generate the multi-year CAGR required to support pension funding.
Seriously? Pensions invest in bonds on very low yields same for infrastructure. I live in australia. When we put 11kw of solar on our house the savings alone provided a return higher than the debt funding, much higher. Next we will do battery and go off grid. We can fit another 20kw on our roof using the same panels we used 2 years ago. Pretty much every major energy provider in australia offers to place panels on roofs which provides them with an ROI. The US has cheap energy as most other places have taxes added which all incentivise investment in renewals
I referenced myself as it’s viable for domestic people to put solar on their roof. Do you have solar on your roof? There is not that many wind systems that I have seen that are applicable for domestic houses and not every house is situated where wind is constant. Why are you so lazy, just google companies that invest in this space. Then google companies that manufacture the systems, the ones that have listed securities are all investable by pension funds. I spent 20 years with banks and identifying these companies is easy. You are just lazy
Scope creep and politicization of pension funds is destructive and a breach of fiduciary duty.
Setting a quota for minimum “green” spending virtually guarantees misallocated funds that do not have the best interests of the pension fund recipients at heart. If these “green investments” are the best possible option the quota ends up being pointless, and if they are inferior investment options then they shouldn’t be invested in. As it stands, this will just be subsidizing a political aim with retiree funds.
And what happens when this inevitably causes them to underperform? The pensions are guaranteed by law in California, so California taxpayers will be on the hook (and if the federal government helps bail them out then all US taxpayers will be on the hook).
but how do you weight the environmental / climate benefits for Californians against the financial cost? What is cleaner air in California worth for the state?
I am not condoning this pension fund's plan, but I don't agree with seeing climate action as purely political. and if the state is backstopping the pension, then maybe this is the ideal market mechanism for the State to invest in climate action? It reduces politicisation by going via a pension fund
This artificial incentive will bring a lot of nonviable “green” businesses/practices forward. While some may genuinely develop tech and processes to help make improvements, most will fail but still get invested in because they check a bureaucratic necessity
Seriously if I was in the California state teachers pension fund I would be out so fast. Give me the lump sum asap I’ll put it in index funds and find another job.
Lol here (in the Netherlands) you have zero choice.
You want to have 100% equity after retirement because you already have enough and can take on more risk to give to your children? Nope.
You want to withdraw everything because you are terminally ill? Nope.
Even if you don't have a pension fund and invest in a tax-advantaged retirement account you are forced to buy an annuity at retirement date, so you lose out on future returns and pay insurance premiums...
I’m all for saving the environment and everything but the managers in charge of this pension fund have one job and one job only: protect the massive amount of money these ~~teachers~~ state employees have entrusted to you.
Actually CALPERS has no teachers in it, just other state employees. The teachers have another pension fund CALSTRS that (I am given to understand) is somewhat better managed.
They're both supposed to invest in technology that is critical for the future. They're supposed to invest to provide the best possible return for the plan members. It is possible there is some overlap in those 2 statements. But they should be investing in those companies BECAUSE it's the best possible return and not because it's the right thing to do. They have a duty to their plan members not to citizens who will be impacted by climate change.
To be clear I’m not saying they can’t invest in renewable companies I’m saying it’s extremely short sighted/risky to invest nearly 1/4th of a pension fund in an extremely volatile niche market like this.
Proper portfolio management is all about risk management via diversification. This is essentially the opposite of that.
Large entities have been trading in wind farm assets for years with stable returns due to contracted energy prices. There are a large amount of renewable energy companies to invest in.
Edit: with all the negative comments on a large fund planning to invest in companies that could have a positive impact for America and the world, I am wearing my tin foil hat and wondering if there are Russians in here trying to shit on anything that would move us away from oil. There is even one comment saying they would rather own tobacco companies than any climate change aware investments like renewable energy companies. Tobacco companies who poison people and cause so much damage, both emotionally and financially, to our health and healthcare systems is what he wants to make money from. No wonder people think capitalism is a sick system when these are the views spouted by parties most interested in economics.
I would think so as well, usually this sub learns left and advocates for some forms of more stringent regulatory scrutiny over our markets which may or may not have merits but this comment section is completely whacky.
I am very familiar with some pension funds and other state investment groups and you're right none of this is new. Without subsidies oil and natural gas are really not as ahead of solar and wind as people would like to think in terms of profitability, add in the fact that oil/gas has more volatility than other energy markets and you've got a proven winner for the future. Pension funds don't like messing around with volatility much with their constant cashflow pulls they receive from ever more increasing pensioners. Even if we strip this down to a pure investment analysis and skim off the ESG stuff we're left with a fairly competitive option, the photovoltaic cells will only become more cost effective while oil and gas will only become more cost ineffective, if we're planning out a 50, 100 year investment horizon the choice is glaringly obvious even for the wallstreetbets-bros that infest these subs
the mission of a pension fund is not to invest in companies "that might change the world". It is to invest in companies that have a proven track record, good business models, pay nice dividends, etc.
"investing" in outfits similar to Solyndra, or highly speculative ventures, is a violation of that mission.
GE makes wind turbines, and that is a reasonable investment. But just because someone makes a wind turbine or solar panel does not make them a good, profitable company.
>There are a large amount of renewable energy companies to invest in.
Sure, but overweighting an investment portfolio into 25% renewables is nuts for a pension plan. The risk of underperformance is huge.
>There is even one comment saying they would rather own tobacco companies than any climate change aware investments like renewable energy companies. Tobacco companies who poison people and cause so much damage, both emotionally and financially, to our health and healthcare systems is what he wants to make money from.
I don't know who commented that but I agree with them. Tobacco companies are more likely to meet the goals of the pension fund than renewable energy companies... Which is what the pension fund managers are entrusted to do. It doesn't really matter how beneficial to society a company is - the fund has a duty to its members.
I kept checking what sub I was in, thinking I stumbled into r/conservative or somehow opened up X instead.
There's always gonna be some BS within a $100B investment but renewables are pretty safe MEGA-BUX investments, especially when you're likely to have some foreknowledge of government investment & such.
I said solar was worse than coal? Pretty sure I didn't
solar panels / plants require massive mining projects for cobalt, lithium, silver, rare-earths, etc. The panels themselves are toxic, and have to be shipped by diesel powered ships to the US. The panels last for like 20 years and then end up in landfills.
The solar plant requires natural gas or coal back up
I consider myself an environmentalist, and I am all about developing new technologies to help clean up pollution, reduce emissions, etc. But that is not the goal of a pension fund.
I hate how modern government funds social priorities using a massive complex of incentives, different funs, and incentive schemes. It causes scope creep and twists programs that were good when initially created into lovecraftian monsters.
If California wants to fund Climate Change it should allocate a few billion dollars directly into these technologies through subsidized loans or just cash grants. Put it on the balance sheet as it is. These pensions funds by definition will underperform (if these were the best investments there would be no need for a special initiative), so the difference in performance should really just be a direct state subsidy.
> I hate how modern government funds social priorities using a massive complex of incentives, different funs, and incentive schemes.
This is a product of how the government is formed in the first place - competitive elections where special interest groups and power brokers have the ability to sway voters.
I want to bring up how two cold entities are taking climate change more seriously: the military, and insurance actuaries. These are unsexy professions that do not have a vested interest in maintaining the current pipeline. They may be slow to adapt sometimes, but they're not dumb; they just want to avoid the future costs of climate change, because they're on the hook for it! Every fuel convey is a valuable target. The less fuel they have to ship to bases, the fewer attacks. And insurance? Who do you think has to cover flood and hurricane damage? Who is letting people build in places that'll be flattened?
So when I see people dismiss climate change just because the Other Guy is going all-in, I want them to consider their rationale. Don't just reflexively reject the opposing viewpoint, because this isn't a binary choice.
The reason it is dumb is because they are intentionally setting a quota, hell or high water.
A well run pension fund focused on their responsibility to pensioners considers “green investment” as one of many potential areas for investment.
A pension fund focused on meeting political goals, compromising their responsibility to pensioners, says “we will invest a minimum of x% in green technologies, regardless of the relative strength of these investments to other non-green options.”
The problem is they are reflexively rejecting non-green investments, as a matter of policy, for non-return related political reasons.
ESG focused hedge funds have become insane leftist political activist front groups... who are using your pension funds to force leftist ideology on established companies and gamble on obvious scams like Nikola motor company and the dozens of overpriced predatory solar firms who have gone under.
For example... Exxon mobile has a higher climate score then Tesla because space man bad...
CalPERS is gonna lose big time on this, if the last few years of ESG is any indication.
The ESG fund managers arent leftists, theyre opportunists. They dont care about the environment any more than Nestle Oreos cares about gay people. They are doing these things to make money off people who want to feel good but actually do nothing.
Not all are leftists... which is why some people like blackrock's Larry Fink and Disney have started talking about how ESG is too political and failing.
But the vast majority are... and they are wreaking destruction of entire industries via hostile board takeovers... Mostly using public, union and academic pension funds.
Either way... reality is starting to hit the masses... and people are fed up mostly with the "S" part of the ESG(E.G. Disney), and until energy prices start moving down... The "E" part, too.
Pretty hilarious they boxed themselves in so hard with the "S" part... that its hurting the "E" part... since they cant tell everyone to JuSt gO BuY A TesLA if they dont like the high gas prices.
Firstly, let's examine the fact that although climate tech may not have as high a return as other sectors, it benefits pensioners through other means. What's better:
A pension fund that returns 6% annually and supports gigatonnes of oil and gas extraction and measurably contributes to climate change -- or a pension fund that returns 5% annually and removes carbon from the atmosphere? Oh wait, there's also the catch that under the first pension fund 4% of the pensioners houses will be under water by retirement, 1% will burn down every year in massive wildfires, 10% will suffer greater wind damage...
Secondly, pension funds are products, and if customers want their pension funds to support green energy (or not support fossil fuels), then they should cater to their customers. And yes, an overwhelming number of millennial and gen-z customers don't want to invest in fossil fuels. A commitment for 2030 means that its these younger generations that this pension fund is tailoring its product towards. The issue of the day is climate change.
Thirdly, there's nothing "liberal" or politicized about science and morality. You're the one who's politicizing the issue -- by calling it politicized. Pension funds have always had moral standards accompanying them. Nobody balks when pension funds decline to include cigarette companies. There's an entire organization devoted to it. How many pension funds in the 80s were invested in Soviet industries? How many are invested in asbestos production? Pension funds are touched on by huge numbers of investors, and so they've always been inherently conscious of the moral hazards of the day. That's the product.
In conclusion: (1) I'd reiterate that these top comments are horrible, and (2) my wife and I would be upset if our pension funds were supporting fossil fuel extraction. That's not what we intend for our money.
I would be very upset if any of my pension funds were being invested into something marketed as “ambitious”. Stability and strength to resist market variances it’s what’s important for long term accounts.
Many pension funds have set venture allocations, albeit in most cases it is a relatively small part of their total private markets allocation. You should check out where your pensions invest, you may be surprised!
>They’re about addressing the major risks that financial markets and companies face as a result of the changing climate—the supply chain disruptions, the diminished worker productivity, the damage to corporate infrastructure and the communities businesses operate in. Risks that continue to escalate.
This is without a doubt the dumbest thing I will read all day. It's like they're completely detached from reality. Environmentalism has become this kooky, state-mandated religion, complete with leaders, followers, and sacrifices to be made for Gaia.
But what does the state have to do with this? They are doing this because there's risks associated with climate change and as a pension fund they must mitigate risk. Climate change is a reality, so I'm wondering who's actually detached from reality. It's you, if you think climate change isn't a problem. It's a problem today, it's gonna still be a problem later
You are intentionally misinterpreting “risk mitigation.”
They have to invest with acknowledgment of financial risks to the pension fund - they are supposed to take risk into account while seeking the best returns for the fund.
They are NOT responsible for mitigating risks in the world at large. They are not responsible for climate change, just the same as they are not responsible for world peace, ending hunger or curing cancer. These things are all problems, but if you are managing a pension fund your responsibility is to the pensioners, not to nebulous “climate change” goals.
Green tech has one of the largest projected CAGRs for the rest of this decade and just had a $1T investment by the federal government. Its honestly not that risky of an investment strategy.
I could quibble separately with those projections but let’s say they’re true.
The point isn’t whether or not it’s a risky strategy, the point is that a pension fund is allocating money towards a specifically political aim rather than “best returns for investors.”
They could allocate 100% of the fund to green investment and that wouldn’t be an issue if their argument was simply “these are the best possible investments for investor returns.”
I mean, the reality of this announcement is that they are probably changing nothing about what they are doing and they simply will classify given investments as “green” if necessary to meet the quota they’ve set for themselves. Or they were already are on track to invest that much and they just decided to announce it in the form of a quota.
Ok, then the government has decided you must give up your car, electricity and air travel in the name of fighting climate change.
You have no choice but to accept this, as after all, this was “not political.” If you think this is too extreme, then you simply are not recognizing the reality of climate change.
I’m saying that climate change itself does represent a financial risk that must be accounted for. Presumably the rationale is that since climate change is about to be a problem, investing in companies that would solve that problem or mitigate in some way will represent an acceptable return. Doesn’t have to be altruistic
What you’re describing is investing for a political motive. Perhaps it is altruistic. Maybe you think “well we need to cure cancer, so we should plow 20% of the fund into experimental cancer treatment research.” Or you could say “well the risk of political instability and war could threaten the economy so we need to invest more in national defense” and earmark 20% of the fund to weapons manufacturers. But that isn’t what investors or regulators mean when they say “risk management.” That is picking a political angle.
You can account for the risk of climate change for any given investment, but saying broadly “we need to fix it” isn’t risk management. You can say “well we shouldn’t invest in beachfront property” or “we predict that there will be increased demand for EVs therefore let’s buy this stock” but saying “we need to spend our fund to solve X problem” is just turning the pension fund into a climate agency.
They aren’t mitigating risk though. That’s the whole problem. They are just exchanging one risk for another. You can think climate change is the biggest risk ever while also acknowledging that investing in climate solutions is extremely risky for the fund. This has nothing to do with someone’s opinion on climate risk.
If climate change is such a risk that it threatens everything in some way, doesn’t it make sense to try to get ahead of that? If you expect the entire market to take a shit because of it, then I think it makes sense to get in on whatever would beat the market. I’d have to read the article to know the strategy but to me it looks defensible
again the whole point of a pension fund in the end is mitigating risk. new green startups are extremely risky. much more so than the economy wide risk of climate changing. in general investing 25% of your entire fund into one industry just by itself is a bit crazy. Let alone one of the more risky industries.
That is simply not true. The climate is for sure changing. Whether or not it’s man made is the question. Also, it is man made. And any scientist with any credibility can confirm. That’s why this fund is investing in this - it’s accurately assessing risk vs known scientific reality. I know it’s easier to slurp up the copium and bury one’s head in the sand but I mean as Ben Shapiro says, facts don’t care about your feelings
This seems more like investing in a bailout then anything. When the fund doesn't cover its needs and it begins requesting bailouts the investments laid out here will pay dividends in political capital, not in financial returns.
Read somewhere that in total climate defense costs for the US alone could end up being something like 14 trillion dollars within 50 years or something.
It's also important to know that petrochemical companies are doing well, continue to be profitable and won't take responsibility for any of it though, so there's that.
Invest in transit projects across the US especially in NYC. I believe Montreal just opened a whole transit system funded like this. Invest in walkable streeets and bus networks. Work with local governments to implement this. Will do so much better than whatever bro in tech Jason has up his sleeve
notwyntonmarsalis | 2 years ago
I’d be curious to know what green / sustainable / climate investments CalPERS has identified that give them confidence that they can achieve the IRR needed to meet or exceed their pension obligations.
Commander_Chaos | 2 years ago
By 2030… they are still trying to figure out the answer to your question.
Diabetous | 2 years ago
So there is now a massive demand side to rating things in a certain sphere of influence safe enough for pensions...
Surely the rating agencies won't buckle to temptation and rate bad debt higher just to open up a new cash cow.
Can't possibly be just like the subprime mortgage situation...
trumpsiranwar | 2 years ago
No one lives in climate solution think tanks
mortgagepants | 2 years ago
i really don't thing this is the same. part of investing in sustainable solutions is for one's own existence. second, sometimes only large funds like this have the money to invest in certain technologies. it might take 20 years to pay off, but it could have a fantastic return on investment after that.
reminds me of the beginning of casino, where only the teamsters could put together enough money to fund a huge casino. now $70 million for a brand new casino seems like a joke.
Diabetous | 2 years ago
>part of investing in sustainable solutions is for one's own existence
Irrelevant to the incentives to the rating agencies.
>only large funds like this have the money to invest in certain technologies.
Again irrelevant, but also just wrong. Care barely even begin to describe how wrong this is. It's ignorant of how money pooling and funds work.
>it might take 20 years to pay off, but it could have a fantastic return on investment after that.
Ahh long time horizons and losing money for a long time. I'm sure Uber and Facebook were funded by the government then?
No only the government, and bureaucratic pension funds from California apparently, could fund investments into projects that lose money over 20 years to appease their constituents.
mortgagepants | 2 years ago
lol okay.
if the rating agencies don't have anything to rate, they're not going to exist. the world changes too.
nuclear fusion is not funded by peter thiel. there is a difference between the history behind "oppenheimer" and making pizza delivery or taxi rides more efficient to order.
either a half trillion dollar pension fund agrees with me, or you're the only smart person on the internet and me and calpers are wrong.
Diabetous | 2 years ago
>nuclear fusion is not funded by peter thiel
Lol. Again, just so fucking wrong!
> nuclear fusion
https://techcrunch.com/2021/11/05/helion-series-e/
"Existing investors, including co-founder of Facebook Dustin Moskovitz, Peter Thiel’s Mithril Capital"
>if the rating agencies don't have anything to rate, they're not going to exist. the world changes too.
What does this mean in the context were talking about? Are you seriously arguing normal financial products won't exist?!
Are you even aware you basically said that?
Do you understand the implications of such a decline in the system to get to that point?
>either a half trillion dollar pension fund agrees with me, or you're the only smart person on the internet and me and calpers are wrong.
The pension fund wouldn't agree with someone who doesn't understand the fuck about the things his talking about...
mortgagepants | 2 years ago
oh man you're fucking impossible to have a conversation with. you really think peter thiel is responsible for fusion? if a donate a few bucks to the salvation army, i dont tell people "i've funded the salvation army."
you're intentionally misunderstanding what i'm saying because...i dont know you don't want people investing in sustainable tech? like i think you mostly understand how all of these things work, but it seems like you're missing some of the key information.
tell me a little bit more about why you think ratings agencies will give good ratings to bad investments for sustainable technologies the way the did for mortgages?
Diabetous | 2 years ago
>you really think peter thiel is responsible for fusion?
No, but pension funds are not doing grant research investments either so I'm certainly operating in the correct sphere of comparison. You are miles off target with your implications.
>you're intentionally misunderstanding what i'm saying because
Because you are operating in an area where you do not have sufficient knowledge or at the minimum vocabulary to communicate as if you do so.
>i dont know you don't want people investing in sustainable tech?
They absolutely can and should, but pensions are required to operate their investments at very safe low risk technologies. Sustainable tech is novel and should be prices outside their regulatory limits.
>why you think ratings agencies will give good ratings to bad investments for sustainable technologies the way the did for mortgages?
The massive demand driven by ESG style initiatives beyond the scope of products at the appropriate risk. There are more buyers as the risk profile drops. As the gap between products and demand grows so will the temptation to price incorrectly will.
The mortgage demand was much more pure greed than 'moral'. Pensions wanted higher returns similarly pushed for more product than existed.
The common theme of excess demand for products runs through both.
Climate risk also is treated by individuals on varying spectrums of 'intentionally ignorant to it's existent' to 'quasi-death cult we're all dying tomorrow'. If one or more rating agency has been staffed with many on the death cult area of that spectrum they might believe is morally imperative to get these investments out to firms. The raters are aware of the thresholds for pension funds etc to lend.
trumpsiranwar | 2 years ago
Himm Michael Bloomberg or this guy?
BoBromhal | 2 years ago
Oh, they’re investing in nuclear?!?!?! That WOULD be smart
Godkun007 | 2 years ago
My big worry is that this will just be another FTX situation. In the last few years, we saw so many bubbles pop. I'm not excited to see big funds rush in to inflate another one.
BoBromhal | 2 years ago
So in 6 years they’re going to transform about 25% of their holdings. I think it’s great the public employees of CA are going to put their money where their mouths and votes are and double down on climate tech.
PavlovsDog12 | 2 years ago
They're doubling down on an insolvent pension fund
I_hate_alot_a_lot | 2 years ago
A pension plan, which mind you, is already comically underfunded.
https://www.ocregister.com/2022/11/25/public-pension-debt-grows-as-calpers-reports-even-more-losses/
hcbaron | 2 years ago
It should be noted that the underfunding is largely related to those who got into CalPERS before 2012. They adjusted the defined benefit payouts to more realistic percentages for those who got in after 2012, like me, we are considered PEPRA (Public Employee's Pension Reform Act). We are aware of the unfairness, but we know it can't go on like it used to.
What's happening now is that the grandfathered CalPERS people are working together to maximize their benefit payouts at retirement at the expense of PEPRA workers. At a recent agency I worked at, many seniors retired since pandemic, including department directors. Instead of promoting lower ranks, they've been consolidating the higher ranks into the remaining seniors, like having the same director for IT & Finance, vs having two, but that person gets like a 50% pay increase. CalPERS payout is based on highest average annual compensation during any consecutive 12-month or 36-month period of employment. This is creating an incentive for the grandfathered to overinflate their pay before they retire, so that they can milk retirement funds even more before the gig is up. Taking on two director positions is an insane amount of work though, so guess who gets to pick up that slack? Yup, all the PEPRA workers. Just another example of how the younger generations are getting screwed, but we keep getting blamed for everything.
ThisAccountHasNeverP | 2 years ago
I don't THINK this is specific to either CalPERS or PEPRA, here in Iowa we have IPERS and there are always old folks scooping up all the overtime in their last two or three years for the exact same reason.
Pretty bummed out to see someone with 35 years experience picking up 400-500 hours of overtime in the year.
hcbaron | 2 years ago
Oh man, don't even get me started on the overtime (OT) abuse. It's especially rampant in public safety, amongst fire and police workers.
Geno0wl | 2 years ago
> It's especially rampant in public safety, amongst fire and police workers.
There was a big paper thing a couple of years ago where some journo figured out that like the top 10 OT workers in the police were getting something like 75% of all OT hours to the point some were working 100+ hour weeks consistently. I believe right after the Chief started putting caps on the number of hours able to be worked per week(because if you work 80 hours of special OT how focused are you gonna be at your standard 40?).
The problem was as soon as they did that there started to be a huge rash of police details not getting filled at all. So the weekly caps started getting relaxed back until there effectively stopped being caps again once everybody forgot about it.
itsallrighthere | 2 years ago
They will come to the federal government, hat in hand, asking for a bail out.
I_hate_alot_a_lot | 2 years ago
"But... we invested in renewables / climate solutions! Bail us out pls."
NoFanoftheFED | 2 years ago
Don't tell me they didn't invest in Chinese banks chasing return and currying favor....maybe this is backfill for when that (publicly) becomes a smoking hole
BonjinTheMark | 2 years ago
I can’t say the recent run of solar and wind companies, nor the way California runs its public utilities, would give me much confidence this will turn out good from a retiree perspective. Sure hope they don’t torpedo hundreds of thousands of people’s 401(k) for this initiative
0010719840 | 2 years ago
They don't care. They also don't invest in guns or tobacco either. A few other industries too I believe. Their investment decisions are based on politics, not what is best for people relying on their pension (like me). I'm sure most redditors agree with that approach but only because California is doing it. If Texas was doing it this sub would call it criminally negligent to consider politics in investment decisions.
Edit: Guys if climate solutions aren't political then it doesn't matter which political party we vote for regarding the climate, right? Can't have it both ways.
Direct_Card3980 | 2 years ago
You’re arguing with teenagers who think that they’re right so there’s nothing to discuss. Ergo it’s “not political, just “reality.”” It’s as dumb as it sounds.
SouplessePlease | 2 years ago
The suggestion that climate solutions is political is frightening. The planet is dying and we wanna dig in our heels depending on which side of the aisles you identify with.
Energy_Turtle | 2 years ago
It isn't as much the problem thats political. It's how big the problem is and what to do about it. This is a totally separate issue from the investment decision in this post, but climate change is absolutely political in many ways. I paid 8 cents for a bag yesterday. Soon my state won't allow the sale of new gas vehicles. These solutions may work or they may not. But it isn't hard to see why these sorts of policies might cause political division.
Knute5 | 2 years ago
Consider it this way: PG&E has had a revolving door of failed leaders and is responsible for a raft of wildfires due to their antiquated, barely maintained equipment in the field. Is punishing PG&E and forcing them to adhere to stricter safety guidelines political? Or is it just California trying to keep a sloppy, irresponsibly greedy utility from burning up the state?
Doing something about a threat isn't political. Doing nothing isn't political. It's suicidal.
imatexass | 2 years ago
We know how big od a problem it is and it's a problem showing every sign of increasing in size.
https://www.weforum.org/agenda/2023/10/climate-loss-and-damage-cost-16-million-per-hour/#:~:text=Climate%20change%20is%20costing%20the,per%20hour%20%7C%20World%20Economic%20Forum
Energy_Turtle | 2 years ago
I'm not arguing one way or another. I'm just saying there is a scale to how big people believe this problem is. Some think we're already screwed, some think we have 10 years, some think we have 100, and some think we'll adapt and it will never really be a problem. The fixes are debatable as well. How much responsibility does the individual bear? How much should the government do? How much money should we spend? Whose money should we spend? How do we measure that any of this is working anyway? And who's to say the government is being honest? In my state, WA, there is a lawsuit from a former state employee right now against the state stating that he was forced to lie about the effects of climate policy. There is so much more to this topic than "the climate is a big problem." Even if every single person agreed it was a problem, there is the endless fighting over what to do about it.
Hamster_S_Thompson | 2 years ago
But it's not the role of a pension fund to fix it with other people's money.
Geno0wl | 2 years ago
Two things
a) pension funds are long term investments. They don't necessarily look at quarterly or even yearly profit, but 10 years windows of potential growth.
b) If the pension fund manager sincerely believes climate change is gonna ravage the planet then it would actually be prudent to divest from things like Oil or gas and invest in alternative energy like Solar, wind, or nuclear.
It is a sad state of affairs where something like "you should listen to experts" statement can hinge on what political party you follow.
cupofchupachups | 2 years ago
I think every human being has an obligation to do the ethical thing in whatever situation they're in, for a large portion of all philosophical systems. Creating certain classes of "exempt" human activity is why we're in the situation we're in and why we keep getting into trouble. This goes from the 1930's and 40s German soldiers who were "just following orders" to game companies who make addictive games for kids to CEOs who suddenly cut out everyone but shareholders as stakeholders in their company. They used to quite literally make decisions that would not harm their workers because of the workers.
The codification of psychopathy in business is a relatively recent phenomenon and I wish people could see past it. There is no real justification for it. Somebody said "shareholder supremacy" and waved their hand and that was it.
Similarly the thought-terminating cliché of "just a political opinion" has been thrown about in the several years for everything all the way to our most basic human rights. You cannot tie your shit opinion up in a bow and tag it political and demand respect for it.
kiklion | 2 years ago
> The suggestion that climate solutions is political is frightening.
It shouldn’t be. It’s political because it’s essentially the tragedy of the commons, which is a social and political problem not an economical one.
Economically, it will always be preferential to share your costs with everyone while keeping the benefits to yourself. This is avoided through social and political venues.
We could just universally decide on our own to stop using fossil fuels. And we could socially ostracize anyone who does, so that they are pressured to stop using fossil fuels too. But at the scale of the world/country, it’s much more efficient to address the issue politically instead of socially.
JJJSchmidt_etAl | 2 years ago
Precisely. This is why the recent moves at the global scale (Paris Conference, for example) are so frightening. They declare basically that despite being the World's largest polluter, China doesn't have to do anything whatsoever. This is amazing for China, who get all of the benefit while being the black lung of the entire planet.
If we cared about a solution, then we would be working hard to reduce pollution from everywhere. The accords target America and the west, as they should. Fortunately, The emissions of America and Western Europe have actually declined so much since 2010 that it actually more than makes up for the modest gains in South America, India, and Africa; just considering those areas, the world's emissions would be falling, as we would hope.
Sadly, China's emissions have simply exploded in the same time, while for example being the most significant place where emissions increased during the COVID lockdowns (they decreased almost everywhere else).
If we care about solving the problem, we need to have the entire world on board.
newprofile15 | 2 years ago
Everything that has tradeoffs is political.
If you don’t think “climate solutions are political” then let me decide what you get to consume for the rest of your life.
I’ve decided that you having a car, using air travel, and using electricity produced by fossil fuels is destroying the climate. Since you gave me a blank check, it is now illegal for you to do these things. Good luck.
SteelmanINC | 2 years ago
That’s not what he said at all, bud. I’d suggest you take your partisan glasses off.
Direct_Card3980 | 2 years ago
> The planet is dying
I can’t roll my eyes any harder. Humanity has overcome far worse. We will overcome this. How best to use limited resources is a cornerstone of politics. Some really crazy climate activists believe we should give up air travel and the internet and medicine and insulated homes and children and all the other things which contribute to global warming. While it would solve the problem, it would also result in a terrible quality of life for humanity. We need to balance the costs with the benefits. Politics is negotiating where that place is.
Villager723 | 2 years ago
>Some really crazy climate activists believe we should give up air travel and the internet and medicine and insulated homes and children and all the other things which contribute to global warming.
We do not have to give up most of these things. Most of the world has these things and contributes far, far less to warming than larger nations do.
YIMBYqueer | 2 years ago
>Humanity has overcome far worse
No, we really haven't and no, those "crazy climate activists" you mentioned aren't pushing the scientifically back solutions like you try to imply
newprofile15 | 2 years ago
Climate hysteria religion in a nutshell, thinking that this is literally the worst threat that humanity has ever faced.
saudiaramcoshill | 2 years ago
Look, I kinda agree with you - I think nuclear annihilation is probably the most urgent/worst threat humanity has ever faced, but climate change is probably pretty close. Just because the consequences are decades in the future doesn't mean it's not dire.
newprofile15 | 2 years ago
The consequences have been “decades in the future” since this hysteria really gained stream decades ago.
Climate change is real and we’ll see small increases in temperature but it isn’t the apocalypse and the harm caused by such change is tiny in comparison to the gains from fossil fuels. The previous century saw 40-80 million die from famine… in China alone! Famine mortality is trivial now by comparison.
War and economic and political mismanagement are far, FAR bigger threats than a couple of degrees of climate change.
saudiaramcoshill | 2 years ago
>The consequences have been “decades in the future” since this hysteria really gained stream decades ago.
Decades ago? Climate change has been a significant policy point since maybe the Kyoto Protocol in the late 90s. It's been at most 30 years since it became heavily politicized, despite small mentions of climate change prior to that.
And... we're starting to see consequences of climate change. We've already seen an increase in global temperatures by 1.8 degrees. Sea level rise rates have almost doubled in the past 30 years. Flooding has become more common in the US, as have droughts. Hurricanes are measurably stronger. Wildfires are more frequent.
Based on your response here, I'm having a hard time believing you've spent much time looking at this issue. For example:
>we’ll see small increases in temperature
is really underselling what climate change will bring. Small temperature increases will mean that Nebraska/Iowa will feel like southern Texas did over the past 20 years with moderate emissions. Under a high emission scenario, North Dakota and NYC will be experiencing south Texas temps by the end of the century. Map to demonstrate.
But temperatures aren't the only impact of climate change. Parts of the midwest will see moderate (5-20%) increases in crop yields, but much of the south and southeast (Texas, Oklahoma, Kansas, Arkansas, etc.) will see crop yield drops of ~40-75%. More frequent hurricanes and sea level rise will cause hundreds of billions of dollars of damage in the Gulf Coast. Again, map to demonstrate.
Water scarcity is also a large issue being driven by climate change. The impact to the US economy due to mass migration caused by water stress is potentially massive. Article discussing this with some handy maps as well.
The impacts due to climate change aren't just temperature increases, but more frequent damaging climate events like hurricanes, redistribution of/increase in scarcity of water, increased climate refugee activity, etc.
>harm caused by such change is tiny in comparison to the gains from fossil fuels
Fossil fuels have certainly given huge gains to humanity, no doubt. But saying that the gains are huge relative to the consequences isn't backed by any sort of data, because it can't be. Fossil fuels are like taking out debt - it certainly increases quality of life today, but it comes at a later cost that we will pay back. Only, we don't know the interest rate on that debt, because we don't know how long the effects of climate change will last or whether they'll eventually be reversible. We could have had ~250 years of advancement (industrial revolution to now) paid for by fossil fuel use, but the consequences of that usage might last for 500, 750, 1000, or more years - we have no idea - or it could quite literally drive us into eventual extinction. Would 250 years of advancement outweigh extinction of humans, in the extreme scenario?
>The previous century saw 40-80 million die from famine… in China alone!
Oh, come on. Surely you cannot be using famine in China caused by Mao's mismanagement of agriculture as proof of fossil fuels' benefit to society. Lack of fossil fuels isn't what caused those famines.
Again, I agree that fossil fuels have benefitted us, significantly. But you must weigh that benefit against the very long term cost of them.
>War and economic and political mismanagement are far, FAR bigger threats than a couple of degrees of climate change.
No. They're more immediate threats. But they're much less likely to kill the amount of people that climate change will likely kill over the long run. If you only consider your and my lifetimes, then you'd be right. But climate change will affect us, will affect our children even more than us, will affect their children even more than us, and so on. The problem is compounding.
newprofile15 | 2 years ago
How about this, we run a tally of lives lost due to war/economic mismanagement/political oppression v lives lost due to climate change for the next hundred years and see what happens? Hell, I’d run it for a thousand years or 10,000 years but we’ll be dead by then.
Surely you can’t lose. I’ll give you great odds! I’ll even give you a handicap… say, I’ll give you a free 100,000 deaths?
Or hell, let’s keep the bet super limited. I bet that crop yields in Kansas will not drop by 50% over the next 50 years. Want to take that bet? I bet that global crop yields will go up over the next century.
eukomos | 2 years ago
What? It's happening RIGHT NOW. A suburban subdivision near me burned down in a wildfire, two of my coworkers lost their homes. Miami floods every time the tide comes in. Lakes Powell and Mead will likely never fill again, and we're not sure where the water to keep LA and Phoenix running will come from. The nation of Tuvalu is being EVACUATED because the sea is rising up over it. The immigration crisis at the US southern border is very much exacerbated by the chronic drought in central America, we have literal climate refugees on our doorsteps and you think this is a problem for later?!
newprofile15 | 2 years ago
Wildfires, droughts and floods have happened for all of human history. Somehow we’ve managed.
LA, Vegas and Phoenix are all in deserts. Yet somehow everyone in the city has water. And will continue to have water through the power of engineering.
“Climate refugees” is straight up fiction. Nearly all so-called “refugees” to the US are economic migrants (seeking better wages) or political migrants (fleeing oppression, like in Venezuela) or a mix of both. No one is fleeing because of weather changes, that’s absolutely fucking ridiculous.
Villager723 | 2 years ago
> The previous century saw 40-80 million die from famine… in China alone! Famine mortality is trivial now by comparison.
What do you think will happen when crop yield is severely impacted by a changing climate? When the AMOC collapses and weather patterns in different parts of the world change rapidly?
newprofile15 | 2 years ago
Well let’s see, crop yields have continually gone up for decades despite climate change.
I expect this trend to continue.
I expect the apocalyptic predictions by doomers to continue to be wrong, as they have been for decades.
I expect gradual increases in emissions as the rest of the world industrializes and lifts itself out of poverty. Then, when their economies are more mature, gradual decreases in emissions.
YIMBYqueer | 2 years ago
The predictions have been accurate. Just because you extremists think scientists saying hey we'll reach x point in a decade, being correct, then saying hey we need to change y in a decade, nothing gets done, then saying if we continue down this path, we'll reach z point in a decade... Means predictions are wrong, doesn't mean they are.
You anti science extremists just can't comprehend anything more complicated than "should I get coke or pepsi.", Thank goodness your evil ideology is dying off.
YIMBYqueer | 2 years ago
Not surprising you anti science extremists can't comprehend reality.
Legitimate_Sail7792 | 2 years ago
This is a non argument.
newprofile15 | 2 years ago
He said that humanity has never overcome a greater threat than climate change and I said that is hysterical.
What argument are you looking for exactly? For one thing, it’s a subjective opinion. For another thing, if you think that climate change is the greatest threat in the history of the world, you are hysterical. End of story.
0010719840 | 2 years ago
The government should be investing in climate solutions. A pension fund should not care, especially since it is at least 20% underfunded as it is.
If climate solutions weren't political everybody would be in agreement and there would be no issues, right? Just because you don't want it to be political doesn't make it reality.
Greensun30 | 2 years ago
People aren’t in agreement because of bullshit politics. Climate change science has the gold standard of science — there’s nothing political about climate change. Morons made it political
0010719840 | 2 years ago
It doesn't matter why its political, the point is it is political. Just because you wish it wasn't doesn't change the reality of the situation.
Greensun30 | 2 years ago
What a worthless argument to make
0010719840 | 2 years ago
Again, I bet if Texas was betting its pensioners financial future not based on the best returns but based on politics you would think that is evil. It's not just climate stuff if you want to pretend that is not political; its guns, tobacco, etc too. That philosophy is what I am criticizing.
Greensun30 | 2 years ago
I’m criticizing the philosophy of letting people change reality based on their feelings that go against established facts. I don’t care they think it’s political. It’s not. It’s stupid of people to let them.
newprofile15 | 2 years ago
So your theory is that it isn’t political, but that if it is political, it is only because everyone who disagrees with you is a moron?
Greensun30 | 2 years ago
You have the reading comprehension of a squirrel
MinkDishrag | 2 years ago
You do understand that politics is only “who gets what” right?
seridos | 2 years ago
It is political though. Political doesn't mean it doesn't matter or that it's partisan, It means the decision is made not necessarily on purely economic ground.
Akitten | 2 years ago
> climate solutions is political
There are a host of different solutions that have both tradeoffs and disproportionately effect different groups. Of COURSE that is political. Why wouldn't it be?
Imagine 10 people on a boat, and 4 have to jump off and drown to save the other 6. That would definitely be political, and is a good parallel to the situation we are in globally.
Knute5 | 2 years ago
Wanting to survive isn't political. It's just survival.
Those who don't know or don't care are the only ones to have the luxury of calling it political.
0010719840 | 2 years ago
Why do I have to say this 5 times? Just because you don't want it to be political does not mean it is not political. What is so hard to grasp about that?
Even if everyone agreed to never burn carbon again we still have to figure out how to allocate resources, making it political again. You far left people whining about how it shouldn't be political must have a really hard time in life if you can't accept that simple reality.
Knute5 | 2 years ago
I'm far from far left. You're making it political in a way that obliterates the practical.
belovedkid | 2 years ago
It’s partially political but if you look at where capital and R&D is flowing it is clearly the future of energy/tech and thus where the returns will be.
newprofile15 | 2 years ago
Great, if that is true, then there’s no need for a quota. If those are truly the best investments then capital will continue to flow there.
But for some reason they decided to put a quota, suggesting that even if they DO determine that such investments provide an inferior return that they will continue to put money into them. Which sounds like a breach of fiduciary duty to me.
HeKnee | 2 years ago
I think the rationale goes that “fossil fuel companies will go out of business in a few decades so we shouldnt invest in businesses likely to die”. Whether that is true in anyway remains to be seen.
seridos | 2 years ago
That should be part of the decision on a security by security basis. You can make a good investment on a company that's going to go out of business if you buy it at the right price. If fossil fuel companies have a decade or two left but sell at a low PE and pay a handsome dividend then they are still a good investment. One of the biggest misconceptions people have investing is that companies or sectors need to do well in order for you to do well on your investment. It's all about the price you pay.
Making a sweeping statement like this is political.
0010719840 | 2 years ago
I'm sure there are many very good projects. I'm 99% sure we will fund the projects that politicians kids are involved in instead. If the projects could stand on their own merits they wouldn't need this.
10354141 | 2 years ago
That argument about politicians children is just pure speculation and based on nothing. If you disagree with the decision then fine, but your just speculating with no facts to back it up
0010719840 | 2 years ago
No, its based on how the big round of green funding from Obama all went to firms connected to politicians relatives. Remember all the jobs that were promised from that? Where are they?
https://www.bostonherald.com/2019/03/27/obamas-green-new-deal-was-a-billion-dollar-bust/
belovedkid | 2 years ago
You realize plenty of projects that are profitable and do not need subsidies still raise money from VC and Pension funds…right? You do realize the petroleum industry is still heavily subsidized…right?
This is an economics sub. If you want your misinformed opinion validated go to one of the political subs.
saudiaramcoshill | 2 years ago
I agree with you generally but
>You do realize the petroleum industry is still heavily subsidized…right?
Is not really true. Direct subsides going to oil and gas are very small, and well under subsidies to green energy (as they should be).
0010719840 | 2 years ago
lol, What does any of that have to do with a public pension fund making investment decisions based on politics instead of investment returns? I know I triggered you somehow, just not sure how.
dontrackonme | 2 years ago
I don’t think any public pension in the u.s. actually plans/believes in future solvency. That is for the central government to fix in the future . That is for taxpayers without pensions to worry about.
YIMBYqueer | 2 years ago
Those taxpayers can demand pensions from their employees too if they stop being so anti union
Edit: lol anti union dumbasses are pissed someone defended unions
itsallrighthere | 2 years ago
They can demand whatever they want but when their employers go BK they will be SOL.
thewimsey | 2 years ago
Pensions are insured.
Redditors just really hate pensions, despite really knowing nothing about them.
itsallrighthere | 2 years ago
Casting aspersions against your fellow Redditors?
Yes, they are insured. That is exactly the problem. Organizarions made pension commitments then under funded those plans. When they fail, the insurance pays. Very similar to what happened in 2008 with banks. But much larger.
https://www.pbgc.gov/
Do you think the Federal Pension Benefits Guarantee Corporation has the reserves required to bail them out when TSHTF? Nope.
Pensions are fine. Irresponsible pension fund management is not. And they won't end up picking up the tab. Again.
zacker150 | 2 years ago
I'll pass. Give me a 401k instead.
YIMBYqueer | 2 years ago
Cool, unions fought for those too
zacker150 | 2 years ago
This is simply revisionist history.
Unions opposed and continue to oppose 401ks.
thewimsey | 2 years ago
The original three legged stool of retirment was pension, 401(k), and SS. And that's still the best approach.
NoFanoftheFED | 2 years ago
They have thought about that. They have thought about what it means to Karen and Kyle who work for the public to have their pensions evaporate; and they have thought about all ensuing consequences of forcing Paul and Penny Private Industry to pay up a 2nd time. They, have. Rest assured.
newprofile15 | 2 years ago
As if they care about meeting IRR goals, lol. Like everything in California, it is just another political entity captured by partisan goons.
jorvis_nonof | 2 years ago
Perhaps this is what California governor Gavin Newsom's recent trip to China was really about.
CorbuGlasses | 2 years ago
I know there was CalPERS funding invested in a development I worked on recently. The building had to meet certain sustainability and performance goals, and they would review the documents we provided to the developer. I’m assuming they’ll get a portion of tenants rent or a portion of the sale of the building
tangraves | 2 years ago
Ugh, what if it's Neom...
seanmonaghan1968 | 2 years ago
Renewable investments including wind turbines can offer utility type returns, solar can also do the same. Leasing home battery systems offer returns; investing on n all of the manufacturing companies also provides green returns
notwyntonmarsalis | 2 years ago
Can you name some that have generated these types of returns?
seanmonaghan1968 | 2 years ago
You could search across Europe, the wind generation systems are viable. Companies invest across solar in australia which is also viable. Companies install solar on domestic and commercial buildings and give a % of sales etc. there are so many models you don’t have to look far.
notwyntonmarsalis | 2 years ago
I’m asking you to name one.
seanmonaghan1968 | 2 years ago
Seriously just search. There is billions invested in australia alone. And probably 100x that in europe. Where do you live?
notwyntonmarsalis | 2 years ago
US. And man, all I’m asking for is one name to support your statement. You’re the one who made it. My hypothesis is that there really aren’t any at all that would generate the multi-year CAGR required to support pension funding.
seanmonaghan1968 | 2 years ago
Seriously? Pensions invest in bonds on very low yields same for infrastructure. I live in australia. When we put 11kw of solar on our house the savings alone provided a return higher than the debt funding, much higher. Next we will do battery and go off grid. We can fit another 20kw on our roof using the same panels we used 2 years ago. Pretty much every major energy provider in australia offers to place panels on roofs which provides them with an ROI. The US has cheap energy as most other places have taxes added which all incentivise investment in renewals
notwyntonmarsalis | 2 years ago
Ok, so you have none you can reference.
seanmonaghan1968 | 2 years ago
I referenced myself as it’s viable for domestic people to put solar on their roof. Do you have solar on your roof? There is not that many wind systems that I have seen that are applicable for domestic houses and not every house is situated where wind is constant. Why are you so lazy, just google companies that invest in this space. Then google companies that manufacture the systems, the ones that have listed securities are all investable by pension funds. I spent 20 years with banks and identifying these companies is easy. You are just lazy
newprofile15 | 2 years ago
Scope creep and politicization of pension funds is destructive and a breach of fiduciary duty.
Setting a quota for minimum “green” spending virtually guarantees misallocated funds that do not have the best interests of the pension fund recipients at heart. If these “green investments” are the best possible option the quota ends up being pointless, and if they are inferior investment options then they shouldn’t be invested in. As it stands, this will just be subsidizing a political aim with retiree funds.
And what happens when this inevitably causes them to underperform? The pensions are guaranteed by law in California, so California taxpayers will be on the hook (and if the federal government helps bail them out then all US taxpayers will be on the hook).
magkruppe | 2 years ago
but how do you weight the environmental / climate benefits for Californians against the financial cost? What is cleaner air in California worth for the state?
I am not condoning this pension fund's plan, but I don't agree with seeing climate action as purely political. and if the state is backstopping the pension, then maybe this is the ideal market mechanism for the State to invest in climate action? It reduces politicisation by going via a pension fund
Common-Ramen | 2 years ago
This artificial incentive will bring a lot of nonviable “green” businesses/practices forward. While some may genuinely develop tech and processes to help make improvements, most will fail but still get invested in because they check a bureaucratic necessity
Merrill1066 | 2 years ago
So they will be investing in things like startups, unproven technologies, underfunded and mismanaged organizations, etc.
stuff like brother-in-law Tony's solar installation company
the pension fund has a duty to those who have invested in it to achieve benchmark returns and protect principal
I see massive losses and lawsuits ...
Dr-McLuvin | 2 years ago
Seriously if I was in the California state teachers pension fund I would be out so fast. Give me the lump sum asap I’ll put it in index funds and find another job.
xiaoqi7 | 2 years ago
Lol here (in the Netherlands) you have zero choice.
You want to have 100% equity after retirement because you already have enough and can take on more risk to give to your children? Nope.
You want to withdraw everything because you are terminally ill? Nope.
Even if you don't have a pension fund and invest in a tax-advantaged retirement account you are forced to buy an annuity at retirement date, so you lose out on future returns and pay insurance premiums...
Direct_Card3980 | 2 years ago
Right?? Don’t they have some kind of charter to provide the best returns possible? Surely this violates their core principles.
Dr-McLuvin | 2 years ago
I would think so as well.
I’m all for saving the environment and everything but the managers in charge of this pension fund have one job and one job only: protect the massive amount of money these ~~teachers~~ state employees have entrusted to you.
CosmicQuantum42 | 2 years ago
Actually CALPERS has no teachers in it, just other state employees. The teachers have another pension fund CALSTRS that (I am given to understand) is somewhat better managed.
Dr-McLuvin | 2 years ago
Sorry my bad I got them confused
newprofile15 | 2 years ago
The increasing politicization and scope creep of the corporate and financial world is disastrous.
YIMBYqueer | 2 years ago
Green technology isn't some brand spanking new thing with no established companies.
WonTon-Burrito-Meals | 2 years ago
Because they invest in technology that are critical for the future? Remind me to not invest in your mutual fund lol
DanielBox4 | 2 years ago
They're both supposed to invest in technology that is critical for the future. They're supposed to invest to provide the best possible return for the plan members. It is possible there is some overlap in those 2 statements. But they should be investing in those companies BECAUSE it's the best possible return and not because it's the right thing to do. They have a duty to their plan members not to citizens who will be impacted by climate change.
Dr-McLuvin | 2 years ago
To be clear I’m not saying they can’t invest in renewable companies I’m saying it’s extremely short sighted/risky to invest nearly 1/4th of a pension fund in an extremely volatile niche market like this.
Proper portfolio management is all about risk management via diversification. This is essentially the opposite of that.
kman1018 | 2 years ago
The key here is that they’re not doing this all at once. You think they’ll just drop 100B on a green mutual fund?
It’s by 2030, which gives them plenty of time to “back off” their goals if they feel need they need to.
Matt2_ASC | 2 years ago
Did you time travel from the 60s?
Large entities have been trading in wind farm assets for years with stable returns due to contracted energy prices. There are a large amount of renewable energy companies to invest in.
Edit: with all the negative comments on a large fund planning to invest in companies that could have a positive impact for America and the world, I am wearing my tin foil hat and wondering if there are Russians in here trying to shit on anything that would move us away from oil. There is even one comment saying they would rather own tobacco companies than any climate change aware investments like renewable energy companies. Tobacco companies who poison people and cause so much damage, both emotionally and financially, to our health and healthcare systems is what he wants to make money from. No wonder people think capitalism is a sick system when these are the views spouted by parties most interested in economics.
Goatsonice | 2 years ago
I would think so as well, usually this sub learns left and advocates for some forms of more stringent regulatory scrutiny over our markets which may or may not have merits but this comment section is completely whacky.
I am very familiar with some pension funds and other state investment groups and you're right none of this is new. Without subsidies oil and natural gas are really not as ahead of solar and wind as people would like to think in terms of profitability, add in the fact that oil/gas has more volatility than other energy markets and you've got a proven winner for the future. Pension funds don't like messing around with volatility much with their constant cashflow pulls they receive from ever more increasing pensioners. Even if we strip this down to a pure investment analysis and skim off the ESG stuff we're left with a fairly competitive option, the photovoltaic cells will only become more cost effective while oil and gas will only become more cost ineffective, if we're planning out a 50, 100 year investment horizon the choice is glaringly obvious even for the wallstreetbets-bros that infest these subs
Merrill1066 | 2 years ago
the mission of a pension fund is not to invest in companies "that might change the world". It is to invest in companies that have a proven track record, good business models, pay nice dividends, etc.
"investing" in outfits similar to Solyndra, or highly speculative ventures, is a violation of that mission.
GE makes wind turbines, and that is a reasonable investment. But just because someone makes a wind turbine or solar panel does not make them a good, profitable company.
Enron__Musk | 2 years ago
Exactly...the botting on Reddit is out of control.
There are altria stock bots pushing that shit and don't forget the meme stocks. Create a bunch of bag holders
saudiaramcoshill | 2 years ago
>There are a large amount of renewable energy companies to invest in.
Sure, but overweighting an investment portfolio into 25% renewables is nuts for a pension plan. The risk of underperformance is huge.
>There is even one comment saying they would rather own tobacco companies than any climate change aware investments like renewable energy companies. Tobacco companies who poison people and cause so much damage, both emotionally and financially, to our health and healthcare systems is what he wants to make money from.
I don't know who commented that but I agree with them. Tobacco companies are more likely to meet the goals of the pension fund than renewable energy companies... Which is what the pension fund managers are entrusted to do. It doesn't really matter how beneficial to society a company is - the fund has a duty to its members.
EthanielRain | 2 years ago
I kept checking what sub I was in, thinking I stumbled into r/conservative or somehow opened up X instead.
There's always gonna be some BS within a $100B investment but renewables are pretty safe MEGA-BUX investments, especially when you're likely to have some foreknowledge of government investment & such.
Great-Pay1241 | 2 years ago
Who gives a fuck about the world. Economics is about leverage.
YIMBYqueer | 2 years ago
Green technology isn't some brand spanking new thing with no established companies.
Merrill1066 | 2 years ago
I mean we could start on the premise that there is really "green energy". I think this little video puts in nicely
https://www.youtube.com/watch?v=EHSGsDipTOU&t=29s
YIMBYqueer | 2 years ago
Video unavailable
Bet it was a video by an oil oligarch though
Merrill1066 | 2 years ago
nope. was actually a video from Michael Moore showing how solar panels are made
once you get your Internet figured out and learn to use things like youtube, go check it out
YIMBYqueer | 2 years ago
Lol you sent me a fucking video that's unavailable on YouTube in my region and you have the gall to say I'm the dumb one?
You claim solar panels are fucking worse than oil/coal/gas then claim I'm the dumb one?
Thank goodness your evil ideology is dying off.
Merrill1066 | 2 years ago
I said solar was worse than coal? Pretty sure I didn't
solar panels / plants require massive mining projects for cobalt, lithium, silver, rare-earths, etc. The panels themselves are toxic, and have to be shipped by diesel powered ships to the US. The panels last for like 20 years and then end up in landfills.
The solar plant requires natural gas or coal back up
there is nothing "green" about any of this
YIMBYqueer | 2 years ago
Yet here you are constantly screaming that solar isn't perfect to hide the fact that solar makes oil/coal look like a super volcano.
No, solar doesn't need those backups. There's alternatives to gas and coal.
Stop you far right bullshit.
Merrill1066 | 2 years ago
the alternative to all this stuff is nuclear, but solar *requires* backup. The sun doesn't shine 24 hours a day
this has nothing to do with politics --it's science
YIMBYqueer | 2 years ago
We don't have a decade of doing nothing to build a nuclear plant or two. You need both ffs.
jorvis_nonof | 2 years ago
> stuff like brother-in-law Tony's solar installation company
Did everyone already forget about Obama's pet project Solyndra and how much of a fiasco that was?
No_Initiative_9878 | 2 years ago
Largest U.S. Pension Fund managing $446 billion announced plan to seek bailout by 2031
WonTon-Burrito-Meals | 2 years ago
We get it, you're a conservative lol
Merrill1066 | 2 years ago
nothing to do with that at all
I consider myself an environmentalist, and I am all about developing new technologies to help clean up pollution, reduce emissions, etc. But that is not the goal of a pension fund.
Person_756335846 | 2 years ago
I hate how modern government funds social priorities using a massive complex of incentives, different funs, and incentive schemes. It causes scope creep and twists programs that were good when initially created into lovecraftian monsters.
If California wants to fund Climate Change it should allocate a few billion dollars directly into these technologies through subsidized loans or just cash grants. Put it on the balance sheet as it is. These pensions funds by definition will underperform (if these were the best investments there would be no need for a special initiative), so the difference in performance should really just be a direct state subsidy.
newprofile15 | 2 years ago
The political capture of institutions works its way through mission creep in every single entity.
Colleges are no longer just for education they are for politics.
Corporations are no longer for producing and selling goods and services for profits they are for politics.
Pension funds are no longer for pensioners retirement they are for politics.
jorvis_nonof | 2 years ago
> I hate how modern government funds social priorities using a massive complex of incentives, different funs, and incentive schemes.
This is a product of how the government is formed in the first place - competitive elections where special interest groups and power brokers have the ability to sway voters.
Swordbow | 2 years ago
I want to bring up how two cold entities are taking climate change more seriously: the military, and insurance actuaries. These are unsexy professions that do not have a vested interest in maintaining the current pipeline. They may be slow to adapt sometimes, but they're not dumb; they just want to avoid the future costs of climate change, because they're on the hook for it! Every fuel convey is a valuable target. The less fuel they have to ship to bases, the fewer attacks. And insurance? Who do you think has to cover flood and hurricane damage? Who is letting people build in places that'll be flattened?
So when I see people dismiss climate change just because the Other Guy is going all-in, I want them to consider their rationale. Don't just reflexively reject the opposing viewpoint, because this isn't a binary choice.
newprofile15 | 2 years ago
The reason it is dumb is because they are intentionally setting a quota, hell or high water.
A well run pension fund focused on their responsibility to pensioners considers “green investment” as one of many potential areas for investment.
A pension fund focused on meeting political goals, compromising their responsibility to pensioners, says “we will invest a minimum of x% in green technologies, regardless of the relative strength of these investments to other non-green options.”
The problem is they are reflexively rejecting non-green investments, as a matter of policy, for non-return related political reasons.
FireFoxG | 2 years ago
ESG focused hedge funds have become insane leftist political activist front groups... who are using your pension funds to force leftist ideology on established companies and gamble on obvious scams like Nikola motor company and the dozens of overpriced predatory solar firms who have gone under.
For example... Exxon mobile has a higher climate score then Tesla because space man bad...
CalPERS is gonna lose big time on this, if the last few years of ESG is any indication.
PraiseBogle | 2 years ago
The ESG fund managers arent leftists, theyre opportunists. They dont care about the environment any more than Nestle Oreos cares about gay people. They are doing these things to make money off people who want to feel good but actually do nothing.
FireFoxG | 2 years ago
Not all are leftists... which is why some people like blackrock's Larry Fink and Disney have started talking about how ESG is too political and failing.
But the vast majority are... and they are wreaking destruction of entire industries via hostile board takeovers... Mostly using public, union and academic pension funds.
Either way... reality is starting to hit the masses... and people are fed up mostly with the "S" part of the ESG(E.G. Disney), and until energy prices start moving down... The "E" part, too.
Pretty hilarious they boxed themselves in so hard with the "S" part... that its hurting the "E" part... since they cant tell everyone to JuSt gO BuY A TesLA if they dont like the high gas prices.
AshingiiAshuaa | 2 years ago
... and then they'll ask for a federal bailout. So all of us without pensions will get to cover theirs.
jethoniss | 2 years ago
Boy these comments are horrible.
Firstly, let's examine the fact that although climate tech may not have as high a return as other sectors, it benefits pensioners through other means. What's better:
Maybe you think one number is esoteric and the other is solid. Not true. Scientists have placed tangible economic value on each tonne of CO2 placed into the atmosphere, and that math can be extended directly to pensioners. Don't like it? Write a rebuttal and submit it for peer review.
Secondly, pension funds are products, and if customers want their pension funds to support green energy (or not support fossil fuels), then they should cater to their customers. And yes, an overwhelming number of millennial and gen-z customers don't want to invest in fossil fuels. A commitment for 2030 means that its these younger generations that this pension fund is tailoring its product towards. The issue of the day is climate change.
Thirdly, there's nothing "liberal" or politicized about science and morality. You're the one who's politicizing the issue -- by calling it politicized. Pension funds have always had moral standards accompanying them. Nobody balks when pension funds decline to include cigarette companies. There's an entire organization devoted to it. How many pension funds in the 80s were invested in Soviet industries? How many are invested in asbestos production? Pension funds are touched on by huge numbers of investors, and so they've always been inherently conscious of the moral hazards of the day. That's the product.
In conclusion: (1) I'd reiterate that these top comments are horrible, and (2) my wife and I would be upset if our pension funds were supporting fossil fuel extraction. That's not what we intend for our money.
RedJerk5 | 2 years ago
I would be very upset if any of my pension funds were being invested into something marketed as “ambitious”. Stability and strength to resist market variances it’s what’s important for long term accounts.
jfrizz | 2 years ago
Many pension funds have set venture allocations, albeit in most cases it is a relatively small part of their total private markets allocation. You should check out where your pensions invest, you may be surprised!
n_55 | 2 years ago
>They’re about addressing the major risks that financial markets and companies face as a result of the changing climate—the supply chain disruptions, the diminished worker productivity, the damage to corporate infrastructure and the communities businesses operate in. Risks that continue to escalate.
This is without a doubt the dumbest thing I will read all day. It's like they're completely detached from reality. Environmentalism has become this kooky, state-mandated religion, complete with leaders, followers, and sacrifices to be made for Gaia.
therapist122 | 2 years ago
But what does the state have to do with this? They are doing this because there's risks associated with climate change and as a pension fund they must mitigate risk. Climate change is a reality, so I'm wondering who's actually detached from reality. It's you, if you think climate change isn't a problem. It's a problem today, it's gonna still be a problem later
newprofile15 | 2 years ago
You are intentionally misinterpreting “risk mitigation.”
They have to invest with acknowledgment of financial risks to the pension fund - they are supposed to take risk into account while seeking the best returns for the fund.
They are NOT responsible for mitigating risks in the world at large. They are not responsible for climate change, just the same as they are not responsible for world peace, ending hunger or curing cancer. These things are all problems, but if you are managing a pension fund your responsibility is to the pensioners, not to nebulous “climate change” goals.
SnarkOff | 2 years ago
Green tech has one of the largest projected CAGRs for the rest of this decade and just had a $1T investment by the federal government. Its honestly not that risky of an investment strategy.
newprofile15 | 2 years ago
I could quibble separately with those projections but let’s say they’re true.
The point isn’t whether or not it’s a risky strategy, the point is that a pension fund is allocating money towards a specifically political aim rather than “best returns for investors.”
They could allocate 100% of the fund to green investment and that wouldn’t be an issue if their argument was simply “these are the best possible investments for investor returns.”
I mean, the reality of this announcement is that they are probably changing nothing about what they are doing and they simply will classify given investments as “green” if necessary to meet the quota they’ve set for themselves. Or they were already are on track to invest that much and they just decided to announce it in the form of a quota.
Innovestor5 | 2 years ago
Climate change isn't political.
newprofile15 | 2 years ago
Ok, then the government has decided you must give up your car, electricity and air travel in the name of fighting climate change.
You have no choice but to accept this, as after all, this was “not political.” If you think this is too extreme, then you simply are not recognizing the reality of climate change.
Innovestor5 | 2 years ago
The government has decided no such thing. Take your slippery slope argument elsewhere.
therapist122 | 2 years ago
I’m saying that climate change itself does represent a financial risk that must be accounted for. Presumably the rationale is that since climate change is about to be a problem, investing in companies that would solve that problem or mitigate in some way will represent an acceptable return. Doesn’t have to be altruistic
newprofile15 | 2 years ago
What you’re describing is investing for a political motive. Perhaps it is altruistic. Maybe you think “well we need to cure cancer, so we should plow 20% of the fund into experimental cancer treatment research.” Or you could say “well the risk of political instability and war could threaten the economy so we need to invest more in national defense” and earmark 20% of the fund to weapons manufacturers. But that isn’t what investors or regulators mean when they say “risk management.” That is picking a political angle.
You can account for the risk of climate change for any given investment, but saying broadly “we need to fix it” isn’t risk management. You can say “well we shouldn’t invest in beachfront property” or “we predict that there will be increased demand for EVs therefore let’s buy this stock” but saying “we need to spend our fund to solve X problem” is just turning the pension fund into a climate agency.
SteelmanINC | 2 years ago
They aren’t mitigating risk though. That’s the whole problem. They are just exchanging one risk for another. You can think climate change is the biggest risk ever while also acknowledging that investing in climate solutions is extremely risky for the fund. This has nothing to do with someone’s opinion on climate risk.
therapist122 | 2 years ago
If climate change is such a risk that it threatens everything in some way, doesn’t it make sense to try to get ahead of that? If you expect the entire market to take a shit because of it, then I think it makes sense to get in on whatever would beat the market. I’d have to read the article to know the strategy but to me it looks defensible
SteelmanINC | 2 years ago
again the whole point of a pension fund in the end is mitigating risk. new green startups are extremely risky. much more so than the economy wide risk of climate changing. in general investing 25% of your entire fund into one industry just by itself is a bit crazy. Let alone one of the more risky industries.
Virtual_Pollution_9 | 2 years ago
>Climate change is a reality
It has no basis in science at all. It's a political movement that seeks to deindustrialize western countries cause "whites bad"
therapist122 | 2 years ago
That is simply not true. The climate is for sure changing. Whether or not it’s man made is the question. Also, it is man made. And any scientist with any credibility can confirm. That’s why this fund is investing in this - it’s accurately assessing risk vs known scientific reality. I know it’s easier to slurp up the copium and bury one’s head in the sand but I mean as Ben Shapiro says, facts don’t care about your feelings
hodd01 | 2 years ago
This seems more like investing in a bailout then anything. When the fund doesn't cover its needs and it begins requesting bailouts the investments laid out here will pay dividends in political capital, not in financial returns.
Hazzman | 2 years ago
Read somewhere that in total climate defense costs for the US alone could end up being something like 14 trillion dollars within 50 years or something.
It's also important to know that petrochemical companies are doing well, continue to be profitable and won't take responsibility for any of it though, so there's that.
FluxCrave | 2 years ago
Invest in transit projects across the US especially in NYC. I believe Montreal just opened a whole transit system funded like this. Invest in walkable streeets and bus networks. Work with local governments to implement this. Will do so much better than whatever bro in tech Jason has up his sleeve
PraiseBogle | 2 years ago
> Invest in transit projects across the US especially in NYC
That shit doesnt make money. Pension funds have a fiduciary reponsibility to its members.
troifa | 2 years ago
Pension funds aren’t in the business of losing money investing in public infrastructure projects lol