In its original form, the bill faced considerable opposition from a variety of groups. The Montgomery County Retired Employees Association (MCREA), which represents more than 6,000 retired County workers, submitted comments in December opposing the bill stating that “divestment offers symbolic rather than genuine impact on climate change given the complexity of fossil fuel investments.” MCREA also said that the original bill “seriously threatens and impacts the funding for both the retirement plan trust fund and the retiree health care trust fund” and that the “bill will not have the desired effect and will have real and potentially negative impacts to pension structure and funding.”
The editorial board of The Washington Post, usually sympathetic to progressive causes, penned a blistering editorial against the legislation. Calling divestment “no more than a feel-good gesture” the editors warned that the bill would “achieve no actual reduction in carbon consumption while imposing very real costs on the county’s pension fund, on which tens of thousands of retirees depend.”
Given that the original bill was deemed simultaneously dangerous to the county’s pension funds and ineffective in its broader purpose, there is no reason that Council members should consider this resolution, as it proposes the same damaging behavior as the original bill. Legitimizing divestment, no matter what form, opens the possibilities pressures of divestment on other grounds, forcing lawmakers to play divestment whack-a-mole, and further destabilizing portfolios in the process.
One needs to look no further than Portland, Oregon, where in a move that one local newspaper described as “bizarre”, Portland’s City Council voted to divest themselves of all corporations, and invest their assets in schemes that guaranteed negligible returns. According to the supporters of the bill, the move would cost the city at least $4.5 million, with higher losses possible in the following years.
The divestment resolution that is still being pushed by Council President Berliner opens the door to this kind of reckless behavior. We encourage him and the rest of the Montgomery County Council to focus on the many real problems that the county faces, instead of engaging in symbolic behavior that will do nothing to address environmental concerns.