Water Infrastructure, Not Divestment, is the Key Environmental Issue that California Faces

Oroville Dam 2Divestment – the notion of an entity selling off investments when driven by a political agenda – has become a common topic discussed among California’s state and municipal elected officials in recent months. Questions should be raised when time, energy and attention are being spent on divestment, and should instead be focused on other higher priorities.

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Recently some environmental groups in California have taken to targeting specific projects and companies in an effort to divest cities and other entities from fossil fuels. The Dakota Access Pipeline (DAPL) has recently become the cause célèbre for such efforts. Several cities have divested or have indicated a desire to divest from the financial backers of the Dakota Access Pipeline, including San Francisco, Davis, Alameda and Santa Monica. In the California Assembly, freshman legislator Ash Kalra introduced Assembly Bill 20, mandating divestment from DAPL, which is working its way through the legislative process.

With such focus being put on divestment, some basic questions must be raised. Is there a consensus around the idea that divestment actually works? More importantly, should divestment proposals like AB20 even be in the mix as a top priority for environmentally conscious officials right now?

It is important to remember that divestment does not necessarily hurt the company whose stocks are being shed … they merely become available to a large pool of investors to buy or sell. Ironically, pension funds and university endowments suffer the most, as they are forced to look for riskier and more volatile options to fill the gaps that divesting leaves. Passage of Assembly Bill 20 will only serve to hurt California’s public pensions.

Several high-profile representatives from both the pension and academic camps in California have cast even more doubt on the effectiveness of divestment. The staff of CalPERS characterized divestment as “an ineffective strategy for achieving social or political goals.” On the university front, Stanford University’s Board of Trustees released a statement which asserted that they did “not believe that a credible case can be made for divesting from the fossil fuel industry until there are competitive and readily available alternatives.” As for the bill specifically, even the Los Angeles Times’ editorial board came out against the bill, calling it “ill-considered” and “attention-getting.”

With public sector pensions facing shortfalls measuring in the billions of dollars and with heightened concerns about “college affordability” being key issues among Californians, perhaps governing the direction of pensions and endowments with anything other than a keen sense of fiduciary responsibility might be ill-advised. That is not to say that there are plenty of other immediately pressing issues that environmentalists and environmentally-minded lawmakers like Ash Kalra could rally behind.

It is abundantly clear that California’s water infrastructure and management is in dire need of reform. Events, such as the prolonged drought conditions from last year, and then the nearly catastrophic dam collapse in an unusually wet winter, clearly signal that our state’s water management infrastructure is in urgent need of an overhaul. As one in-depth Wired commentary on the issue has stated, California’s approach to protecting farms from large influxes of water is largely reliant on “patch-and-pray.” Levees and canals, many of them over a century old, simply cannot manage our state’s water supply. It is clear that a massive overhaul of these systems will be needed, combined with a fundamental re-thinking of how we use water in our daily lives. This overhaul needs to look at how cities use water; how irrigation can be made more efficient; and how we price and track water use.

In any public debate at this magnitude, California will need the input of all stakeholders in the state. That includes businesses, state lawmakers, heavy industry, agriculture, utilities, water management officials, and yes, even environmentalists. As we have seen in the case of Oroville, where a potential dam burst forced evacuation of 180,000 residents and nearly led to one of the largest disasters in California history, fixing California’s water infrastructure is not an issue that can wait much longer.

The efforts of Ash Kalra and the environmental community, misplaced in forcing divestment, should be redirected to create positive changes that our state needs. It is clear that pensions and endowments should not be used as a platform for taking ideological stances, but to perform as investments which best support the institutions and people they are intended to serve.

However, there are several pressing environmental issues that affect the quality of life of all Californians that need to be resolved in a comprehensive manner. Water infrastructure is perhaps the most urgent and important of those issues.

Bruce Whitaker is the Mayor of Fullerton, California, and also serves as a Director of the Orange County Water District.


  1. The answer to government is insurance.

    What does government do? It assures (insures) item of infrastructure, public safety, etc. are done. The private sector can do it better over the long term than government can. Multi-layered insurance contracts that assure private companies performance is the back-up that government wonks say is the only way performance is guaranteed.

    Want performance in water distribution? Privatize it. Want rational and proper zoning and building regulations? Privatize it. You contract for service, pay your monthly fee and in addition to the service you have an insurance policy that indemnifies you for failed service or defective service.

    Far fetched you say? Does your government operated agency pay you the consumer when they screw-up? Does an oversight agency pay you when they find you have been harmed by government action? The majority of the time no, and most times you have to sue in court that is biased against the common man.

    That would of course dismantle the halls of power of the last century.

    Boy that would frost the dictators and Socialists.

  2. Patton's Ghost says

    Screw it…The movers will be here in three weeks…

    This state is run by immature idealogues who are for sale to their union and special interest benefactors, or pandering to their Hispanic constituents…

    Game over…

    It’s going to get much, much worse before the Lotus-eater voters wake up to the fact that they’re being screwed over royally by these charlatans.

    Ain’t worth the personal risk…

    The movers indicated that we’re not alone, just ahead of the outmigration stampede that June & beyond portends…They don’t have enough semi’s to offload everyone who’s bailing on this Third-World state…

  3. CA’s government will continue foundering (and floundering) until we double the average IQ of our “elected servants” getting it near the 3-figure mark (hopefully, a little above), because what we have are nowhere near the Best&Brightest – not even a pale imitation.

  4. To the environmentalists, the government is their god. When one looks at what the Willie Brown’s have done the pension systems in the name or “political correctness” is a crime. Have they learned anything? Obviously not.

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