His decision to divest $5 billion of oil and natural gas company stocks and bonds is foolish. It will do nothing to combat climate change.
But it will reduce pension fund returns, thereby jeopardizing the retirement security of cops, firefighters, teachers, and other public employees.
The city's pension funds are already woefully underfunded. According to its own calculations, the city has just 62 percent of the assets it needs to pay out full benefits to future retirees.
Scholars at the Manhattan Institute think the New York City Public Pension is only 47 percent funded.
Either figure should terrify New Yorkers. The federal government considers pension funds at risk if they are less than 80 percent funded.
And if a pension plan is funded at 65 percent or below, the government declares a pension plan's status "critical," meaning the fund may never be able to meet its obligations.
The city's pension funds will need to earn record returns to cover future liabilities. Earning such returns will be hard no matter what, and impossible if the funds neglect profitable oil and natural gas companies.
From 2005 to 2013, oil and natural gas investments delivered a 130 percent return for major pension funds, nearly double the 68 percent return those funds earned from other assets.
Divesting from fossil fuels reduces annual fund returns by about one-quarter to one-half of a percentage point, according to consulting firm Compass Lexecon.
That might not sound like much. But compounded over decades, it means the funds would forego billions of dollars of capital gains.
Mayor de Blasio's counterparts in other cities have rejected divestment. For instance, Seattle recently heeded the advice of investment professionals and decided to keep its fossil fuel assets.
"To our knowledge, there are no investment consultants to U.S. public pensions that have recommended that those public pensions divest from fossil fuel companies," said Jason Malinowski, chief investment officer for Seattle's pension plans.
So why would Mayor de Blasio play the divestment game against the advice of investment pros? Easy: to score political points. He hopes to shore up support from progressive activists ahead of a potential 2020 presidential bid.
Attacking the oil and natural gas industry makes for great headlines, but it would have zero impact on climate change.
It's ludicrous to think that pulling $5 billion out of the multi-trillion dollar industry would somehow convince oil and natural gas companies to stop drilling for oil and natural gas. The divestment plan is virtue signaling at its worst.
Mayor de Blasio's ire at energy companies is misdirected. Many firms are working to lower emissions. Shell, for example, has pledged to reduce its carbon emissions 50 percent by 2050.
Large energy companies have also invested huge sums in green energy start-ups and low-emission energy sources such as biofuels. And the recent natural gas boom, made possible by new drilling techniques like fracking, has enabled power plants to switch away from dirtier fuels like coal.
Total carbon emissions are falling in the United States thanks primarily to the oil and natural gas industry.
Mayor de Blasio's divestment plan does nothing to help the environment. It only betrays workers who dedicated their lives to making New York a safer and better place.
Ari Boosalis is president of the Columbia University College Republicans.