Climate change is real, and its main cause is human activity. Let’s not confuse weather with climate. When we talk about climate change, we are talking about changes in long-term averages in weather. In most places like Maine, weather can change from minute-to-minute, hour-to-hour, day-to-day and season-to-season. Climate, however, is the average of weather over long periods of time and over large areas.

The scientific consensus is that the earth’s climate is changing and that emissions from burning fossil fuels are the major cause.

We don’t have to look much further than our local environment and economy to see some of the effects of climate change. Our clam populations are being decimated by invasive green crabs; our shrimp fisheries are closed; and our lobster populations are threatened. Warming ocean temperatures and acidification caused by increasing concentrations of atmospheric carbon dioxide are among the culprits. Our ski areas are concerned about long-term changes in snowfall; our maple syrup industry is threatened over the long term; and the composition of our forests is changing gradually. Invasive pests and mosquito-borne diseases are migrating north into Maine.

These are only the known effects we see now in Maine. When we consider the country and the world as a whole, and as we look into the future, we must recognize we have a growing problem.

Climate change has real environmental and economic costs. Investing in fossil fuel consumption, the main cause of climate change, has real costs as well.

Four rapidly evolving developments will have negative impacts on the value and performance of fossil fuel equities.


• Government restrictions on carbon release, a matter of when rather than if, will make much of the proven reserves of fossil fuels unburnable. These reserves then become, in effect, stranded assets, already listed on balance sheets and factored into share prices but without value.

A 2-degree Celsius increase in global temperature is the so-called redline cited by scientists as the maximum we can sustain without dangerous climate instability. If we’re to stay below that, we are limited to releasing about 886 gigatons of carbon dioxide into the atmosphere between 2000 and 2050. We’ve already burned about a third of that. That leaves only about 565 gigatons to be burned between now and 2050.

The 200 largest publicly traded fossil fuel companies already carry proven reserves of 745 gigatons on their balance sheet. If we add government-owned companies, proven reserves total 2,795 gigatons, far in excess of what we can burn safely.

• Advances in alternative sources of energy will lessen the demand for coal, oil and natural gas. These fuels will be replaced gradually with other sources of energy: hydro, solar, wind, biomass and nuclear. Again, it’s a matter of when rather than if.

• Public sentiment toward fossil fuel companies is becoming increasingly negative. Consider the uproar at the BP spill in the Gulf of Mexico; the calls for state and local bans on hydraulic fracturing for natural gas (fracking); and more locally, the outcry over reversing the Montreal-Portland pipeline to transport tar-sand oil through South Portland. Significantly, there is increasing support for the removal of subsidies to these companies, currently more than $130 billion over 10 years. Were these subsidies to be lost, expenses would go up naturally, and share price and profits would go down.

• Negative reputational effects, similar to those experienced by the tobacco companies, may have negative effects on hiring, employee morale, shareholder satisfaction and stock valuations.

The trustees of the Maine State Retirement Fund would be wise to understand their exposure to these risks, instruct fund managers to fully assess the portfolio risks linked to these investments, and divest their portfolios from these equities.

In the past, Maine has divested successfully its retirement funds from specific investments, notably from companies doing business with Sudan, South Africa and Namibia. The decision to divest from these companies was for moral or ethical reasons only. The divestment of Maine’s pension funds from fossil fuels is a moral imperative as well, but it’s also financially prudent and the proper course for the trustees of the Maine State Retirement Fund to follow.

Rep. Brian L. Jones, D-Freedom, represents District 45 in the Maine House of Representatives, and serves on the Agriculture, Conservation and Forestry Committee. Email at

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