California’s fealty to green initiatives is clearly hurting the state, but it’s not the only one. New York’s pension funds are doing much the same, with plans to divest from oil and gas and double investments in green energy companies. New York’s pension funds are already an established underperformer in the stock market and, like CalPERS, these entities seem more interested in placating the powerful, oligarch-financed greens than attending to their fiduciary duties.

By contrast, Republican state legislatures — including those in Florida, Kansas and Idaho — have passed laws that ban or limit the consideration of ESG, providing direct opposition to these green investment pledges. It’s no wonder, then, that Idaho and Florida have earned among the highest returns according to NASDAQ.

Red states have clearly cottoned onto a reality that blue states have missed. Overall, renewable energy stocks have lost a sum to the tune of $30 billion this year, with the entire EV sector including Tesla showing weakness. Some EV firms such as Fisker, may not be long for the world while solar and wind generation facilities are wearing out about twice as quickly as expected. Apple recently abandoned its EV project, racking up billions in losses. At the same time, fossil fuel companies and stocks have once again become market favourites.

Years ago, Treasury Secretary Janet Yellen assured Americans that climate change would provide “the greatest economic opportunity of our time”. Such sentiments sparked a green gold rush, with the Financial Times estimating that more than $200 billion was invested in “cleantech” projects in the United States alone. But rising prices for materials and the end of cheap money have forced energy firms to raise their prices, which in turn have hurt consumers.

Still, states like California persist with their investments in these firms in large part because the tech oligarchs like it. Companies such as Google and Apple — both generous donors to the Democrats — can boast that their emissions are small, in large part because one makes virtually nothing material and the other is heavily reliant on manufacturing in China.

This year could be the death knell for the ESG movement, particularly if Trump and a Republican Congress are elected. But it will be a slow death: while states such as Florida have moved quickly away from it, the likes of California have dug their heels in. The Golden State clearly doesn’t care much about where it puts its own workers’ cash, but eventually it will have to. Otherwise, there will not be enough money for pensions and, as usual, the taxpayer will be on the hook.

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Joel Kotkin is a Presidential Fellow in Urban Futures at Chapman University and a Senior Research Fellow at the Civitas Institute, the University of Texas at Austin.

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