No More Empty Gestures — Here’s How de Blasio Can Really Divest NYC From Fossil Fuels

Climate change is a serious threat. Selling city pension funds' stake in the fossil fuel industry to other investors is not a serious response.

Not really.
Not really.

Mayor de Blasio is at it again, making another empty gesture that mimics climate action without taking any real steps to decrease greenhouse gas emissions. This time, de Blasio teamed up with his London counterpart Sadiq Khan to grandstand in the Guardian, urging other cities to follow their example and divest public pension funds from the fossil fuel industry.

The threat of catastrophic climate change demands a serious policy response. But as long as the mayor perpetuates policies that let our car-based transportation system burn through gasoline like it’s 1960, New York will continue to pump money into the fossil fuel companies that are broiling the planet. Unless de Blasio and the world’s mayors actually set cities on a trajectory to consume less oil, it won’t make much difference if their pension funds sell their stakes in the fossil fuel business to other investors. It is not a serious response.

Real divestment from fossil fuels will require a clean break with the public policies that have propped up car ownership and driving at the expense of cleaner, more efficient modes of transportation. Here’s a look at what that would look like in the context of New York City transportation, starting with the factors that de Blasio can control most directly.

Shrink the city’s car fleet

Since de Blasio took office in 2014, the city’s car fleet has grown by 10 percent and city employees are driving 25 percent more miles, according to the New York Times. NYPD alone spent nearly $95 million on gas over the five most recent fiscal years.

A mayor who’s serious about divesting from fossil fuels would start by getting his own employees to drive less, which is a tough ask when the whole city knows you get driven 12 miles to the gym every day.

No more parking placards

NYC’s parking placard system provides a gigantic incentive for placard holders to drive everywhere. A 2006 study by Bruce Schaller found that city employees who work in Manhattan below 59th Street car commute at nearly double the rate of other workers, which Schaller attributed in large part to the free parking granted by placards.

Instead of reducing the number of city parking placards, de Blasio has increased the official placard supply by roughly 50 percent. That’s tens of thousands of city employees who have an extra incentive to drive to work and put money in the pockets of Big Oil, thanks to our mayor.

Eliminate parking minimums

Like access to a parking placard, access to a guaranteed parking space inside your home or workplace makes New Yorkers much more likely to drive. And since 1961, city zoning rules have required new buildings to include car parking. For 57 years, these parking requirements have induced driving trips and increased spending on gas, all while crowding out other uses of scarce New York City land for the sake of car storage.

A mayor who’s genuinely committed to preventing a climate change disaster would lead an all-out assault on parking minimums, but de Blasio has merely tinkered around the edges of the current system, lowering parking mandates for subsidized housing near transit.

Bus lanes and bike lanes, not ferries

New York City ferries will never generate the ridership that buses and bikes can generate on streets designed to prioritize transit and cycling — travel by boat involves too many transfers and doesn’t get people close enough to most destinations to move massive numbers. But you’d never know that from de Blasio’s budgets.

The de Blasio administration has spent hundreds of millions of dollars on a ferry system that moves as many people as a single moderately busy bus route. The one advantage ferries have is political: Because boat docks don’t take away space from gas guzzling cars (and keep that money flowing to the fossil fuel industry), they appeal to timid mayors in a way that bus lanes and bike lanes never will.

Get behind congestion pricing already

City Council Speaker Corey Johnson gets it. Reducing car traffic is such an imperative for the health and vitality of New York that Johnson wants to enact congestion pricing without waiting for approval from Albany.

In nearly five years as mayor, de Blasio has never even plainly said that he supports congestion pricing. Meanwhile, New York City traffic keeps getting worse and the oil merchants keep raking in more cash from city drivers.

Develop more near transit

Last but not least, the more New York City grows, the less pressure for development to extend outward into car-centric, greenhouse gas-belching sprawl. But in some of the most transit-accessible districts of the city, zoning prevents development beyond a few stories. Despite pushing for a few upzonings, de Blasio has not challenged the NIMBY power base in the affluent central neighborhoods where new development can increase the city’s supply of housing with minimal impact on working class households. And every person who opts for the suburbs because they couldn’t find or afford space in NYC is a gift to the fossil fuel industry.

  • walks bikes drives

    While I agree with the other points of lowering fossil fuel usage, I do not think that divestment is empty or hollow. Yes, other investors will buy the stocks, but when you have millions of dollars worth of stock owned by a municipal entity being put up for sale, that devalues the stock. When a lot of institutional sized investors refuse to purchase a stock, that will deflate the stock price because it is less valuable if it is harder to sell in the future. So, while NYC alone divesting will not produce a vast deflation in stock price, getting other big municipalities on board can provide a modest enough deflation, in theory. But this is always hard to measure because there is no true index for how a particular stock would do with or without grand scale divestment, since there are too many other factors that affect stock prices. But as a symbolic gesture alone, I do appreciate the divestment. But now let’s get some of those other things on Ben’s list going as well.

  • Joe R.

    One more thing should be on your list. Besides shrinking the city’s fleet, what remains should go 100% electric. We can also require private operators with large fleets to only operate electric vehicles within city limits. A big municipality like NYC will buy in enough volume to enable the economies of scale to drop electric vehicle prices under those for similar gas vehicles. That in turn should spur even more widespread adoption of electric vehicles. Granted, electric vehicles still have most of the problems of fossil-fuel powered vehicles, but at least they don’t pollute the air or make lots of noise.

  • Joe R.

    Divestment will certainly help in that lower stock prices will mean oil companies can’t raise as much capital for things like new drilling projects. That in turn should mean we don’t bother drilling harder to get oil at oil as the profits wouldn’t be there. Long term however reducing demand is the only real answer. So long as people want oil for fuel, the oil companies will provide it.

  • Joe

    One of the most impactful climate change fighting actions a person can take is to reduce or eliminate consumption of animal products in general, and cows in particular. In addition to the changes on Ben’s list reducing personal car use, the city should also be encouraging a reduction in red meat consumption. One example is school cafeteria lunches.

  • Komanoff

    Sorry, guys, but what determines stock prices is [the present-value of] expected future earnings, and what determines those is demand for the products the corporation makes and sells. Divestment is barely even tinkering around the edges. Symbolic gestures have their place, but it’s pure fig-leaf in this case. Bravo, Ben F.

  • Bernard Finucane

    Incinerating household waste instead of dumping it and burning gas would be a great idea too.

  • TacoKnight

    Institutional divestment does take away a source of capital funding from a company on which to grow their infrastructure or otherwise expand that they and prospective investors would look at to drive their future earnings.

    Also, consider that institutional investing is not usually in individual companies, but rather in funds. If you say you’re going to take your $2B pension out of a $40B fund because it has $500M in some oil company, the fund managers might divest the fund from the company in order to keep the pension’s business.

    That’s how you turn symbolic gestures into behavioral change.

  • AnoNYC

    Even better, NYC could collaborate with other cities for unprecedented purchases of the same types of vehicles.

  • Komanoff

    Sure. But another source will pop up in its place. Demand is what drives investment in FF infrastructure. I agree that symbolic gestures can build movements and nudge culture, but all that vanishes into air w/o policy changes that attack usage/demand.

  • walks bikes drives

    Charles, what you are describing sounds more like commodities futures. Stock prices are more based on how much investors are willing to pay, based on what they think the value of the company is, and what the value of the stock will be in the future. That’s why Amazon always had such a high stock value well before they ever turned a profit. So if we can turn the tide of investors, making a very large number of institutional sized investors soured to a stock, another investor will take that into account that there are fewer possible others who would buy the stock from them when they wanted to sell. Just because a stock is valued at 12$ per share, for example, does not mean you will actually be able to sell it at will, for 12$ per share. That’s how the value of stocks go up and down.

  • Komanoff

    It’s fantasy to imagine that enough investors will sour on a stock to drive its price down significantly. And I repeat: if demand for petroleum or whatever is robust, some entity will materialize to meet it. Divestment feels good. And, yes, it helps build the climate movement. But destroying *demand* is at least an order of magnitude more important.

  • walks bikes drives

    Of course reduction of fossil fuel usage is an order of magnitude, or four, above divestment. That’s not my argument. My argument is that divestment is neither hollow nor useless.

  • Komanoff

    Then I agree with you.

    Do *you* agree w/ *me* that BdB’s trumpeting divestment (which hasn’t even happened yet, btw) as a big win for the climate is a distraction and fig leaf? I hope so!

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