The Financial Assault, Part 2: RAN is at it again

The activists at the Rainforest Action Network have ramped up their campaign against the banks financing the Dakota Access pipeline. Last month, RAN called on Citigroup to “halt all further loan disbursements for the Dakota Access pipeline and ensure that the project sponsors immediately halt construction, unless all outstanding issues are resolved to the full satisfaction of the Standing Rock Sioux Tribe.”

RAN cited Citigroup’s involvement with the Equator Principles—a set of rules adopted by financial institutions “for determining, assessing and managing environmental and social risk in project finance”—as they reason they should stop funding DAPL.

When that didn’t get the desired response, RAN and 500 other activist groups—including, Greenpeace and the Sierra Club—sent an open letter last week to the CEOs of 17 banks that are financing DAPL, demanding an “immediate halt to financing the DAPL.” And once again, they cited the Equator Principles as justification for their actions.

“The undersigned organizations,” they wrote, “are closely watching how the banks providing financial support to the project are acting on the ever worsening situation on the ground, including your bank.” (Emphasis added.)

This recent action is one part of a coordinated, multifaceted effort to pressure financial services companies—including insurance providers, institutional investors and their advisors—into defunding or divesting from oil and natural gas projects. Following the results of the presidential election, environmental activists have shifted their focus away from federal regulatory and legislative battles toward more unconventional fights on the state and local levels, as well as online. Unfortunately, it looks like this campaign against the banks financing DAPL is a harbinger of things to come.



Hydraulic fracturing has no “widespread, systemic” impact on US drinking water

Carbon tax: Not what Robin Hood had in mind

There is often some fairly muddled logic spouted by those who work in the corridors of power on Capitol Hill, but even by Washington’s standards this one takes the cake: Rep. Jared Polis (D-CO) referring to a carbon tax as a “tax cut.”

As E&E Daily reported recently, in response to the House taking up a resolution opposing a carbon tax, Rep. Polis said “this is the first sign of momentum for a carbon tax cut — and you’ll hear me referring to it as a carbon tax cut because that’s essentially what it is: using carbon tax revenues to cut taxes for the American people.” By his logic, the carbon tax is like Robin Hood: robbing from the rich, giving to the poor.

Except that’s not quite true. To begin, the notion that raising taxes and then giving it back is somehow a tax cut is the sort of fuzzy thinking that could only take place in Washington, DC.

Second, does anybody really believe that 100 percent of this tax will be given back to the people? And finally, even if it is given back, it is highly likely that it will go to the government’s preferred group of consumers – the kind of affluent consumer that can afford to install solar panels and drive around in expensive (and subsidized) electric vehicles.

Rep. Polis can keep referring to a carbon tax as a “tax cut,” but repeating the same fallacy over and over again does not somehow make it true.

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New Research Makes Divestment Folly Even Harder To Ignore

Further research from Arizona State University has been released today which highlights – yet again – just how damaging divestment will be for universities that bow to pressure from narrow-minded pressure groups, and shed their investments in fossil fuel companies.

Findings from Dr. Hendrik Bessembinder, a professor at ASU’s Carey School of Business, show that costs related to divestment have the potential to rob endowment funds of as much as 12 percent of their total value over a 20-year time frame. For large institutions, this could be as much as $7.4 billion, while medium-sized institutions could see a reduction of between $52 million and $298 million. For small institutions, the loss could stretch from $17 million to $89 million.

But the costs with divestment don’t stop at the loss of funds. Dr. Bessembinder’s findings show that heavy transaction and compliance costs will be incurred as fund managers sell off their fossil fuel holdings, as many of these are held in mutual funds, commingled funds and private equity funds. Substantial research and compliance costs will also be incurred as managers ensure their investments comply with their divestment goals.

Finally, the report also adds that the top 10 environmentally-focused funds charge management fees 10 basis points higher than their peers in the active management space, and 38 basis points higher than the passively-managed funds that long-term investors tend to favor.

As stark as these numbers are, they become even more grave when viewed in context. A 12 percent drop in endowment funds means a 12 percent drop in funds for the college. In turn, this means less money for research, fellowships, financial aid and professorships – among much, much more.

Although some reports state that the divestment movement has been “largely rebuffed,” pressure on campuses across the country to shed their fossil fuel investments still remains. However, while the divestment advocates claim to represent the best interests of American citizens, divestment merely politicizes energy production in favor of more expensive methods – harming the very people advocates think they are trying to save.

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