Commissioner Jones’ call for coal divestment is just the latest gesture
As for Commissioner Jones’ announcement itself, it appears to be lacking in substance. According to the think tank R Street Institute, it falls flat for two reasons.
First, that the value of capital investments made by the fossil fuel industry are broadly known and thus already priced into the equity valuations of coal, oil and gas company stocks. Insurance companies have therefore already taken into account medium and long term changes to the market of the stocks they own.
Second, the institute states that escalating regulatory pressure on fossil fuel companies does not necessarily entail a commensurate increase in risk in the short term. Indeed, the fact that coal still makes up almost 40 percent of U.S. electricity generation – not to mention the vast majority of the power consumed in developing world – would suggest that the risk of stranded assets that the Commissioner references is abstract.