New York City Mayor Bill de Blasio has announced a game-changing lawsuit against five major oil companies in an attempt to recover the cost of damages from climate change and make infrastructure improvements to cope with its effects. In addition, as part of his recent offensive to tackle climate change, de Blasio announced plans for the city’s pension funds to divest from fossil fuel companies over the next five years, a massive victory for the global divestment movement.
“New York City is standing up for future generations by becoming the first major U.S. city to divest our pension funds from fossil fuels,” de Blasio said today. “At the same time, we’re bringing the fight against climate change straight to the fossil fuel companies that knew about its effects and intentionally misled the public to protect their profits. As climate change continues to worsen, it’s up to the fossil fuel companies whose greed put us in this position to shoulder the cost of making New York safer and more resilient.”
The news comes just days after ExxonMobil launched an attack in a Texas court against coastal communities in California that sued Exxon and others for climate impacts last year.
"The city seeks to shift the costs of protecting the city from climate change impacts back onto the companies that have done nearly all they could to create this existential threat," states the lawsuit, which was filed in the Southern District of New York.
The city names BP, Chevron, ConocoPhillips, ExxonMobil and Royal Dutch Shell as defendants, alleging that the fossil fuel companies have produced more than 11 percent of the world's carbon and methane pollution from industrial sources "since the dawn of the industrial revolution."
Environmentalists and climate change activists roundly hailed de Blasio's announcement.
"New York City today becomes a capital of the fight against climate change on this planet," said Bill McKibben, co-founder of 350.org, which has spearheaded a global campaign for fossil-fuel divestment. "With its communities exceptionally vulnerable to a rising sea, the city is showing the spirit for which it's famous: it's not pretending that working with the fossil fuel companies will somehow save the day, but instead standing up to them, in the financial markets and in court."
“Climate change is potentially more cataclysmic and expensive than any problem ever faced by humanity," said Richard Wiles, executive director of the Center for Climate Integrity. "Yet in one very important way climate change is no different than any other environmental issue: the polluters have to pay for the damages they have caused."
"The polluter pays principle goes back to Plato, and applies to Exxon and other fossil fuel companies for their climate pollution," said Durwood Zaelke, president of the Institute for Governance & Sustainable Development. "The bill for climate change is coming due, and can’t be fobbed off to unsuspecting taxpayers."
In 2012, Superstorm Sandy battered the east coast of the U.S., resulting in more than 230 fatalities and causing $75 billion in damages. The deadliest and most destructive hurricane of the 2012 Atlantic hurricane season, Sandy was the second-costliest hurricane in American history at the time. (It fell to fourth last year, following Hurricanes Katrina, Maria and Harvey, each of which was costlier.)
Some 100,000 homes in Long Island were damaged, flooded or completely destroyed by Sandy. The storm also triggered a series of massive fires, including a six-alarm fire in Queens that destroyed over 100 structures. Heavy winds toppled construction cranes and even damaged the space shuttle Enterprise, on board the flight deck of the Intrepid Sea, Air & Space Museum in the Hudson River. All told, Sandy caused an estimated $19 billion in economic losses across New York City.
Sandy's aftermath: A beach house in Far Rockaway, New York was completely destroyed by the 2012 superstorm. (image: Leonard Zhukovsky/Shutterstock)
But Sandy, according to many scientists, was not simply an act of god. Human activity takes some of the blame for its development and intensity. Like many extreme weather events, Superstorm Sandy has been linked to global warming. A 2015 study published in the journal Nature Climate Change and led by Dr. Kevin Trenberth, a climatologist at the National Center for Atmospheric Research, concluded that humanity's greenhouse gas emissions have the power to increase the frequency and severity of particular weather events.
Using Sandy as a case study, Dr. Trenberth and his team found that human-caused sea level rise made the storm surge worse: "It is possible that subways and tunnels may not have been flooded without the warming-induced increases in sea level and storm intensity and size, putting the potential price tag of human climate change on this storm in the tens of billions of dollars."
"There is no dispute about the fact that fossil fuels are the principal cause of global warming. There is no dispute about that fact that global warming is causing climate changes, which are battering coastal communities more and more each year," said Ken Adams, coordinating counsel for the Center for Climate Integrity. "Who is going to pay for the damage? The cost estimates are in the tens of billions of dollars in some states."
Flooding in the buildings at Sheepshead Bay, Brooklyn, New York, due to storm surge from Hurricane Sandy. (image: FashionStock.com/Shutterstock)
The other main thrust of today's announcement—divesting the city's pension funds from fossil fuels—is also a turning point in the fight against climate change, not just because these funds have some $5 billion currently invested in fossil fuels, but because other cities may follow suit. City officials contend that the divestment will be the largest of any U.S. municipality to date.
New York City's pension fund systems, as of February 2017, have over $175 billion in assets under management, making it the fourth largest public pension plan in the United States. The two biggest pension funds—Teachers’ Retirement System and New York City Employees’ Retirement System—will pursue divesting by 2022, officials said, "consistent with prudent practice and in line with their fiduciary responsibilities." The other three major pension funds will be encouraged to start the divestment process as quickly as practical.
“Safeguarding the retirement of our city’s police officers, teachers and firefighters is our top priority, and we believe that their financial future is linked to the sustainability of the planet,” said New York City comptroller Scott Stringer. "Our announcement sends a message to the world that a brighter economy rests on being green. It’s complex, it will take time, and there are going to be many steps. But we’re breaking new ground, and we are committed to forging a path forward while remaining laser-focused on our role as fiduciaries to the systems and beneficiaries we serve.”
The city's new divestment plan follows New York Governor Andrew Cuomo's announcement last month that the state pension funds will also divest from fossil fuel investments.
“From global financial capital to a center for climate action, New York City’s leaders have created a watershed moment for the climate movement in a city devastated by Superstorm Sandy just five years ago," said Denise Patel, coordinator of the Divest-Invest Network. "New York City is taking aim at the heart of the fossil fuel industry through divestment and litigation from the bow of resistance against the Trump administration. We commend them for this bold move."
Naomi Klein, author of No Is Not Enough and co-founder of The Leap, said:
Right now, the tremendous costs of climate disruption are socialized—the public is stiffed with ballooning bills from mega-disasters and the most vulnerable communities are suffering the worst impacts. Meanwhile, the extravagant profits that flow from overheating our planet are systematically privatized. By suing these five oil majors who knowingly deepened the climate crisis, New York City is taking a game-changing first step in reversing this perverse injustice—many other cities and states are sure to follow. Today’s double announcement is a reminder that fossil fuel divestment isn’t just a moral decision: it meets the highest standards of fiduciary responsibility as well. In a rapidly warming world, oil, gas and coal stocks are simply too high risk.
Activists are hopeful that New York's bold moves against the fossil fuel industry will spur other cities to take similar actions. "The lawsuit filed today by New York City marks an important tipping point for climate litigation and accountability," said Center for Climate Integrity's Richard Wiles. "We applaud Mayor de Blasio for his leadership and expect that other cities will follow suit."
Interested in divesting your own assets from fossil fuels? If you invest in a mutual fund, you may be investing in fossil fuel companies. Even if you just have a bank account, your bank may be investing your funds in fossil fuels. To learn more about how to divest your money from fossil fuels, check out Green America's webpage, Divesting & Reinvesting: Creating a Fossil Free Portfolio.
Join Senator Bernie Sanders, Bill McKibben and other movement leaders and organizers to discuss this victory and next steps on January 31. Find a livestream watch party near you.