How a Billionaire Is Using Oil Profits to Help Climate Change Victims
When billionaire environmental activist Tom Steyer was a hedge fund manager, he made hundreds of millions of dollars from investments in fossil fuel companies that contribute to climate change. Now he’s taking some of those profits to help victims of climate change–related disasters.
Steyer is funding the new $2 million Climate Disaster Relief Fund from profits he made from investments in Kinder Morgan, the largest oil transporter in the United States and the nation’s biggest natural gas pipeline operator.
“Those affected by the 2013 wildfire season have already felt the devastating impacts of climate change, and while the Climate Disaster Relief Fund will help with their recovery efforts, we must act now to prevent future climate-related disasters,” Steyer said in a statement.
Over the past few decades, U.S. wildfires have become more frequent and severe. Their causes—higher temperatures, drought, and insect outbreaks—have been linked to climate change, according to the National Climate Assessment released last month, and burned areas could increase by 74 percent in California alone.
The U.S. Forest Service projects that in 2014 firefighting costs will hit $1.8 billion—$470 million more than is in its budget, according to a report issued by the agency. As of May, the California Department of Forestry and Fire Protection had already responded to 1,400 fires—more than twice the average number just five months into the year, according to the Los Angeles Times. Last year, wildfires burned 4.1 million acres of land, 1,000 homes were destroyed, and 34 firefighters died on duty.
NextGen Climate, Steyer’s political action committee, recently unveiled the Climate Disaster Relief Fund, which will be administered by the San Francisco Foundation. Future funding rounds could go to communities affected by oil spills, droughts, floods, or other extreme weather events linked to climate change, NextGen Climate said.
The San Francisco Foundation and NextGen Climate declined to provide details on how the funding will be disbursed to frontline responders, the extent of future contributions to the fund, or their source.
So is $2 million enough?
The money pledged is the “initial contribution” to the fund, according to Suzanne Henkels, a spokesperson for NextGen Climate. She emphasized that the fund is meant to support the relief efforts of existing organizations, not replace them.
The funding came from a promise Steyer made when he was in the midst of divesting his money from tar sands and coal. (Steyer is the cofounder of Farallon Capital Management, a $20 billion San Francisco hedge fund.) Last July, he promised to take the money he made from his investment in Kinder Morgan, place it in a fund that does not invest in tar sands or coal, and donate the profits to climate disaster relief.
Steyer is now fully divested from Kinder Morgan, earning $1.7 million from the company, a spokesperson told the Washington Post. He is set to completely divest his oil and gas portfolio by the end of the month.
The move is just one part of Steyer’s effort to address climate change and its effects since he left Farallon in 2012. Since then, he has emerged as one of the most visible critics of the Keystone XL pipeline, as well as one of the largest benefactors of the campaign organized to stop the project.
NextGen Climate is also financing Democratic political campaigns for the 2014 and 2016 elections in at least seven states.