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
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.