The City Air List (Byluftlisten) in the Bergen City Council on March 22, 2013 submitted a proposal to sell the city pension fund’s holdings in companies with significant fossil fuel reserves. The «unburnable» carbon risk consists in significant portions of such holdings becoming worthless if global climate policy succeeds. Unless carbon capture and storage is massively deployed, successful climate policy requires that roughly 2/3 of proven fossil fuel reserves – notably coal, but also oil and gas – will have to remain in the ground.
Holding such shares thus constitutes a risk to the future pensions of Bergen city employees. Furthermore, the city of Bergen is particularly vulnerable to fluctuations in the value of fossil fuel shares in general, since oil and gas extraction constitutes a mainstay of the local economy. Fossil fuel divestment is thus a way to alleviate compound risk. Finally, the Bergen City Council has determined to support national and international goals to reduce dangerous anthropogenic climate change, while the business models of companies with large fossil fuel reserves depend on this goal not being met. The proposal will thus harmonize the city’s political and financial goals.
The full proposal may be found here (in Norwegian).
Update: Here’s the text of the resolution that was finally adopted, unanimously, on Oct 30, 2013.