Teachers’ Pensions Come From Coal?
Do you know where your pension coming from? For some US teachers, it’s Chinese coal.
The Chinese coal industry is known for its lucrative returns: the China Shenhua Energy Co. gained 65% from July to September, and many investors claim they can’t afford not to be in China. In fact, 20% of Shenhua’s stock is held by U.S. investors — one of whom is the Teachers Retirement System of Texas.
But China’s coal is also a huge polluter. According to the New York Times, China uses more coal than the US, the EU, and Japan combined, contributing an enormous amount of CO2 to the atmosphere. Coal-fired plants emit more than 60 different hazardous air pollutants. The large amounts of sulfur dioxide produced by Chinese coal cause acid rain, which pollutes water sources. But because of China’s rapidly advancing economy, the country needs energy — fast and cheap. Coal-fired plants are much cheaper and quicker to build than natural gas, nuclear, or hydroelectric plants, and it’s widely available.
China’s booming coal industry is also harmful to its citizens, producing so much sulfur dioxide that the World Bank estimated 400,000 premature deaths happen each year due to pollution-related illnesses. Not only that, but as much as 40% of air pollution in South Korea and Japan is believed to originate in China, and many experts believe that pollution from China is reaching the western part of the United States.
Do Texas teachers know where their pensions are coming from? For that matter, are other teacher retirement systems investing in Chinese Big Coal? I checked out Missouri’s Public School Retirement System, in which my husband and I have each invested. With my little financial knowledge, I was able to determine that PSRS has invested with Merrill Lynch, which is a shareholder in Shenhua. Just how much of my money is in coal remains to be seen. Looks like it’s time to work towards divestment…
Source: Associated Press
November 1st, 2007 at 3:20 pm
They are Texas teachers! Many people want returns in their portfolio regardless of where they come from.
Bummer for me, my 401K just loses money!
November 2nd, 2007 at 11:19 am
[…] Kelli Best-Oliver connects the dots between some U.S. incomes and Chinese pollution. This post was originally published on November 1, […]
November 9th, 2007 at 1:30 pm
I am not a great fan of all things Chinese. I am sure that the individuals are great people and that we share much common ground, but politically we (China & the US) are somewhat at odds. Maybe that will improve in time.
Anyway, the greens were spinning when the US rejected the Kyoto Protocol but there was no such outcry when China received a developing nation’s pass. Now they are a major economic force and offer investors what they want most — decent returns. Since it is the responsibility of an investment group to do what they can to make good on their promises of competitive returns, the Chinese market can not be ignored. The Teachers Retirement System of Texas is only trying to secure the economic future of its investors.
On a side bar, I would venture a guess that Texas - like many other states - forgoes the payment of social security and forces its teachers to contribute to their retirement program. Additionally, the teachers probably have only limited control over the Retirement System’s business practices. You would probably consider this a deplorable practice. However, I would argue that it is no different than the teacher’s unions forcing its members to pay dues that fund political candidates and push legislation that they as individuals may not support. I guess one could say that neither the retirement systems nor the unions meet the needs of every individual member.