Last November we laughed when hundreds of students and alumni stormed onto the field during halftime at the annual Harvard-Yale football game, demanding that Harvard divest from fossil fuels. Few may know this bit of theater was part of a well-coordinated, 10-year-old campaign to “purify” universities from any association with fossil fuels, whose use is “incompatible” with the goals of the Paris climate agreement.
The divestment movement began as a project of 350.org, a coalition led by Bill McKibben, author of The End of Nature. In early 2010, student activists at Swarthmore College launched a fossil fuels divestment campaign, modeled on successful efforts at Swarthmore decades earlier to divest from South Africa’s apartheid regime.
With support from 350.org, the divestment movement expanded, first to other campuses, then also to liberal churches, local governments, and philanthropic institutions. But as the protests grew, so did official resistance. Major universities (including Harvard) used to surrender investment portfolios, and activism moved in other directions.
After the election of Donald Trump, grizzled activists decided divestment could be revived. So the Better Future Project, which seeks “to build powerful coalitions of climate groups and other progressive organizations that collectively work toward common goals related to climate, jobs, and justice,” created Divest Ed, which calls itself “the national training and strategy hub for student fossil fuel divestment campaigns.”
Meanwhile, Zero Hour, a new youth-led climate group, debuted with its own national day of marches, then joined with the international climate strike movement to recruit hundreds of teenaged climate activists. Zero Hour quickly gained endorsements from scores of climate activist organizations, thrilled that teens said they “cannot afford to wait any longer for adults to protect our right to the clean and safe environment.”
Enter Extinction Rebellion University, an offshoot of the British-based group known for disruptive actions. Their webpage states: “Conventional approaches of voting, lobbying, petitions, and protest have failed because powerful political and economic interests prevent change. Our strategy is therefore one of nonviolent, disruptive civil disobedience –a rebellion.”
No more “Kumbaya.” The Harvard-Yale game was a Paul Revere’s ride for reviving the divestiture movement. Deeming February 13 as “Divestment Day,” Extinction Rebellion and Divest Ed organized activists at over 60 campuses in the U.S. and Canada to stage sit-ins, walkouts, and banner drops to pressure institutions to end all investments in fossil fuels.
Divestiture advocates began with the presumed moral high ground, then expanded their arguments to damn fossil fuels as major money LOSERS. The bottom line: “Fossil fuel companies, whose share prices are partly based on proven reserves, are grossly overvalued.”
Others claimed that continued use of fossil fuels would violate targets set in the Paris climate accords. Another study predicted a near total shutdown of fossil fuel industries in Russia, Canada, and the U.S., “causing serious losses for investors and the global economy.” But the Energy Information Administration agrees that fossil fuels will account for over 75 percent of world energy consumption through 2040.
Divestment activists have also gained concessions from a growing number of businesses, but bigger fish like pension plans, including the California Public Employees’ Retirement System, have yet to budge.
CalPERS chief investment officer Ben Meng rebuked divestment advocates, stating that the $380 billion pension fund cannot “constrain itself to a limited set of investment opportunities. He added, “For non-stakeholders, such as outside parties, who do not bear the financial risk of our fund, but advocate using our fund to take actions beyond the scope of our fiduciary duty, and advocate using our fund to advance their agenda, we ask that they respect our fiduciary duty.”
A new study by UMASS-Amherst’s Political Economy Research Institute suggested divestment is an insufficient strategy. Lead author Robert Pollin said there is “no evidence that any divestment actions have had any significant negative effect on the stock prices of fossil fuel companies.” The reason? “Divestment per se does not affect either how much it costs to produce fossil fuel energy or how much consumers are willing to buy.”
Others argue that divestment does not drive share prices down and instead may leave less eco-concerned investors positioned to buy additional shares and steel their resolve not to succumb to green demands. Nor does divestment impact privately held companies that do not offer stock.
Timothy Devinney adds, “Divestment does not destroy value – it simply transfers it to another set of owners who are not so morally outraged and are willing to pick up the shares set aside, at a slight bargain. If the point of the divestment campaigners is to publicly shame the fossil fuel companies and put pressure on them, the campaign is doomed to fail.”
Institute for Economic Research founder Robert Bradley, Jr., argues that “Divestment simply transfers wealth from anti to neutral fossil-fuel investors. Pro-carbon-based energy advocates, moreover, smile all the way to the bank.” Bradley chides the activists for short-sightedness, suggesting that, “Rather than continue this ill-thought practice, the resources and passion against carbon-based energy should be redirected to helping others — beginning with the 1.2 billion people who lack access to electricity and have to burn wood and dung for energy.”
Worse, says Bradley, research shows that “colleges that divest from fossil fuels would lose up to 12 percent of their endowment value – a loss that could total billions of dollars for many schools.”
In sum, divestment is at best political theater. Karthik Ganapathy, a spokesman for 350.org, admits that the goal of getting universities to divest isn’t to financially burden fossil fuel companies; it’s to tarnish their image and lay a foundation for even bolder actions.
Yet radicalized youth embolden progressive lawmakers and judges to issue outright bans on the sale and use of fossil fueled appliances. This is already occurring in places like Takoma Park, Maryland, Berkeley, California, and Connecticut (among others).
We can only hope that, as these children mature, they begin to realize that for the most part they have just been rearranging deck chairs as part of a titanic scam. The all-electric society they envision, built solely on wind and solar energy, will remain a pipe dream for the foreseeable future – or at best, a bridge to a newer, better source of energy for the long-term future.