Fossil Fuel Divestment Student Protest at Tufts University by James Ennis \ CC-BY-2.0, via Wikimedia Commons
Several years ago a prominent environmentalist spoke at my university. Soon, he told us, he would stop flying. We were impressed. A few years later I saw him hurrying out of the Air Canada frequent flyer lounge at Toronto airport.
Even with the best of intentions it's hard to separate from the fossil fuel economy. (And I respected him for recognizing that his work as an activist required him to stop trying.)
Yet that's the principle behind the divestment movement now underway at campuses across the land. The aim is to persuade universities to remove fossil fuel stocks from their investment portfolios.
It's growing fast. The Canadian Youth Climate Coalition (CYCC) launched its Fossil Free Canada campaign in January 2013. Since then divestment has been urged at about 40 Canadian universities, joining hundreds of others in the United States and elsewhere. According to CYCC president Kesley Mech, divestment "is a strong way to send a super-clear message that we’re no longer interested in supporting fossil fuel use. We want a different economy."
The campaign is guided by the view that climate change is a moral issue: because the energy industry created the crisis, it would be immoral to share in its profits. Activists draw parallels with divestment campaigns for tobacco, military industries, and South Africa during apartheid. The hope is to repeat history: these campaigns were initiated by activist groups, then socially-aware investors joined in, and eventually so did the mainstream economy. The ultimate goal is to force energy companies to change their business model.
Divestment is the perfect gesture: feels good, might be profitable, requires no change in personal behaviour.
Several universities are planning to divest. Some are not. Harvard is the most prominent to say no, resisting use of its $33 billion endowment for political purposes. But those divesting consider it a win-win: doing good while benefiting the university. The first American college to divest is using this to publicize its sustainability credentials. Divestment may even be a moneymaker. Big investors are getting concerned about stranded assets – resources (like oil in the ground) that the energy industry might be forced to leave untouched. These might then become less valuable – making early divestment a rather savvy move.
So divestment is the perfect gesture: feels good, might be profitable, requires no change in personal behaviour. A clear and convenient response to an inconvenient truth.
But perhaps divestment should be evaluated in terms of whether it can make a difference for the climate. And that's much less clear.
One can start by acknowledging that this campaign has little in common with earlier efforts. Unlike South Africa or the tobacco industry, we can't separate from fossil fuels – they are mixed up with everything we do (as that flying environmentalist learned).
And the direct impacts of divestment will be limited. Oil stocks are highly liquid (no pun intended: it means they are bought and sold in large volumes everyday). With divested shares quickly picked up by other investors, their prices are unlikely to be affected (although coal company stocks could be more vulnerable). Divestment might even make energy companies less vulnerable to pressure, because their stocks will likely be picked up by investors who don't care about climate issues.
In the absence of direct economic impacts, companies might be affected indirectly, if a stigma gets attached to them. But this too may be counterproductive. Threats of shaming don't usually change behaviour – if anything, they make people defensive. And shaming the industry means shaming its workers (and its suppliers, their families, and so on). Divestment could thus motivate these people to resent, and so resist, climate action. So will describing climate change as a moral issue: telling people they are immoral is a lousy way to get them on your side. It's also hypocritical: when Shell or Petro Canada takes your money it's being immoral, but you are not?
Understanding what motivates people (or companies) is a matter of analysis. And that, after all, is what universities are supposed to do – not demonize an easy opponent. And such an analysis will show that influence is achieved not by shaming, but by engaging.
University commitments to carbon neutrality tell us more about contributions to climate action than divestment actions do.
There are many strategies available to motivate the energy industry towards climate sanity. A plan for strategic investment over, say, 20 years, favouring better performers, like those shifting to renewable energies, could be a vehicle for working with the industry. There's also much work to be done in developing principles for climate-friendly investing and lending. The idea is to work with, rather than shun, the industry. After all, they have vast resources, that, if they were persuaded to do so, could be devoted to developing more sustainable energy options.
Universities – and students – could also define endowments more broadly than just financial investments. They also include physical infrastructure – which often hardwire carbon dependency. If students want universities to divest, why not focus on divesting from parking lots? University commitments to carbon neutrality tell us more about contributions to climate action than divestment actions do – what if students pushed universities to live up to these commitments?
It's often suggested that divestment is an important symbolic gesture. But at this point climate change is an emergency – one that demands more than gestures.
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