Cost of Fossil Fuel Divestment for Public Pension Funds of New York State and Colorado

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Title:   Cost of Fossil Fuel Divestment for Public Pension Funds of New York State and Colorado

Author:  Prof. Daniel R. Fischel, Christopher R. Fiore, Todd D. Kendall

Publisher:  Compass Lexecon

Date: August 2018

Full Text Article

Summary:

We found that when a pension fund divests from coal, oil, and natural gas, the annual cost of divestment averaged 0.15% across the funds we studied, with a range between 0.05% to 0.27% per year. When the pension fund also divests from utilities, then the annual cost of divestment averaged 0.20% per year, and ranged from 0.09% to 0.27%. These lost returns are large in dollar terms. For instance, for CalPERS, the estimated cost of divestment would translate into a loss of $210 million per year when divesting from coal, oil, and natural gas, and $289 million per year when also divesting from utilities.

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