by Chloe Rodman
Across the nation and the world, colleges, universities, churches and other foundations and organizations are participating in the divestment movement by withdrawing their investments from companies that contribute to climate change through carbon emissions. Currently, 50 corporations have committed $50 billion in divestments. Surprisingly, the major oil company Rockefeller has committed $860 million to the cause. A representative from the company reported that they felt both morally and economically inclined to do so. Not only does the divestment help the fight to reduce carbon emissions, but Rockefeller also previously had a large portion of their money invested in reserves that are now to remain in the ground, untouched.
As opposed to Rockefeller, many oil companies are criticizing the idea of divestments. Another large oil company Exxon Mobil stated their point of view on the company website: “to not use fossil fuels is tantamount to not using energy at all, and that’s not feasible.” Harvard University is one of remaining institutions that is on the side of these corporations and continues to invest in fossil fuels. The University receives a $33 billion endowment. It is because of these statements against divestments that author Tim Dickinson addresses the six myths of divestment.
Myth 1: Divestment Costs Too Much
The opposition to divestment argues that getting rid of fossil fuel stocks means getting rid of profit for the investor. However, David Gould, who leads in the investment committee at Pitzer College recently guided the college to divest $125 million from fossil fuels and argues that there is a very low, if not beneficial, financial impact. Other foundations and corporations, such as McGraw Hill Financial have similar findings in their divestment process.
Myth 2: Fossil Fuels Are a Safe Investment
Oil companies believe that they will be able to profit from the enormous quantities of oil reserves they have at their fingertips and therefore will remain a good investment. However, the International Energy Agency predicts that around $300 billion worth of oil reserves must remain in the ground to meet the reduction of carbon emissions determined to keep the temperature from rising above 2°C.
Myth 3: Divestment is Too Political
The big oil and coal corporations do believe in climate change—they know the effect of carbon emissions. What they do not believe in is the strength of national governments to enforce low carbon emissions. They argue that what they are doing is strictly economics, and that they should not be involved in the political process. However, with such a great impact these emissions have on the environment, and therefore the lives of billions, this is not the case. Ellen Dorsey, Wallace Global Fund executive director says “If you own fossil fuels, you own climate change.”
Myth 4: Fossil Fuel Divestment is Harder Than South Africa Divestment
Many people link the South African apartheid divestment with the current environmental divestment because they both are morally important. Fossil fuel promoters argue that limiting carbon emissions through environmental divestment will be much harder than ending apartheid but, in actuality, it’s the opposite. During the South Africa divestment, 40% of companies did business with segregated South Africa. Currently, only 11% of companies invest in large fossil fuel companies.
Myth 5: The Alternatives Are Too Risky
Some argue that the removal of all investments in coal, oil and other fossil fuel corporations is a bad idea because people are likely to take that money and invest it all in a green energy project. This is true—it is risky to take all your money and invest in one clean energy project. Instead, creating a low-risk and diverse investment plan is the smarter option and will be a safe alternative investment.
Myth 6: Divestment Doesn’t Do Anything
The last myth focuses on the idea that if people sell their share of fossil fuel companies, other eager buyers will purchase them instead because many people don’t believe in effective divesting. However, if we look at past divestments, such as the South Africa divestment, tobacco divestment and Darfur divestment, all these have succeeded. Divesting might not succeed if only a handful of corporations participate. However, universities in the United States, Europe and Australia have all begun divesting. California, the Church of Sweden, the World Bank, and the United Nations are all working on the divestment process as well.
Dickinson, T. 2015. The Logic of Divestment: Why We Have to Kiss Off Big Carbon Now. Rolling Stone. http://www.rollingstone.com/politics/news/the-logic-of-divestment-why-we-have-to-kiss-off-big-carbon-20150114