Paul Hamill isn’t what you’d call a climate denier. Far from it. But he’s also not a fan of pressuring academic institutions to sell off their fossil fuel stocks.
Four years after its inception, the divestment movement is under attack, and not just from its natural enemies in the oil, gas and coal business. Opposition is also emerging from liberal analysts, scientists and professors who are wholeheartedly dedicated to combating climate change, but insist that divestment is a waste of time and resources.
“What they [divestment activists] want to do is to reduce CO2 levels in the atmosphere to tackle climate change, and that is spot-on — that’s what we really need to do,” said Mr. Hamill, director of strategy and communications for the center-left American Security Project in Washington, D.C.
“But divesting is not the way to do it. It’s almost like a glib PR stunt. It feels nice to go out and campaign, and it feels nice to try and divest from these companies, but it’s not serious,” he said.
Further, some experts say selling off fossil fuel stocks would actually make things worse by imperiling the financial status of universities and colleges, thus jeopardizing their ability to conduct research on alternative fuels and technologies.
“Divestment will not cause any meaningful financial impact to fossil fuel companies, but could hurt the universities and colleges dependent on fossil fuel share dividends,” said a study on the efficacy of divestment released Feb. 12 by ASP, whose board chairman emeritus is former Sen. Gary Hart, Colorado Democrat.
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That argument has been cited by administrators at nearly every one of the dozens of U.S. universities that have rejected divestiture proposals, including Harvard, Yale and the University of California, none of which are known as hotbeds of climate change denialism.
It’s true that university faculty have been more reliable supporters of divestment than administrators. Still, even some professors are starting to doubt the wisdom of divestment, as seen in a Feb. 17 letter signed by 42 college academics opposing the strategy.
The letter notes that Swarthmore College and Wellesley College both decided against divestment after internal audits found the colleges could each lose $15 million per year over the next 10 years under fossil fuel divestment policies.
“In our view, continued engagement with the energy sector on these critical issues represents a far better and more practical approach than a policy of exclusion and isolation,” said the letter. “Plainly put, the challenge of combating climate change is too great, and the costs associated with divestment are too considerable, for us to pursue these worthwhile objectives in any other way.”
Daniel R. Fischel, professor emeritus at the University of Chicago, released an industry-financed study last week that found portfolios with energy stocks did better than those without them over a 50-year period by 0.7 percent per year.
Total university holdings are estimated at $456 billion, meaning that the projected cost of divestment would top $3.2 billion per year.
“This strikes us as an excessively high price to pay for something even divestment proponents acknowledge is largely a symbolic act,” the letter said.
At 350.org, the group heading up the divestment charge, advocates dispute that figure, citing other studies that cast doubt on the financial impact. At the same time, organizers agree that the movement has focused less on the financial debate than the moral one.
“Look, when the Rockefellers decide it’s financially unwise and morally disgusting to keep investing in fossil fuels, you know a corner has been turned. We can’t financially bankrupt the fossil fuel industry, but we can, and are, starting to politically bankrupt them,” said Bill McKibben, founder of 350.org, in an email.
The Rockefeller Brothers Fund agreed in September to divest any fossil-fuel holdings from its $860 million portfolio. The Rockefeller Family Fund helps finance 350.org.
Mr. McKibben said proof of the divestment movement’s influence can be seen in recent efforts by industry groups to discredit it. The Environmental Policy Alliance, for example, released a video last week aimed at college students that urges them not to “break up with fossil fuels.”
“Divestment is one front of many — but an increasingly powerful one, as the shrill reaction from the fossil fuel industry demonstrates,” he said.
The divestment push also makes strategic sense. By focusing on university endowments, the movement taps into a ready-made volunteer activist base in the form of college students. The effort also allows climate change activists to work to achieve something concrete instead of always working against the industry.
“We’re tired of only playing defense with the fossil fuel industry. We also need to play offense, and divestment is a powerful way to do that,” Mr. McKibben said in an interview last year with Bill Moyers.
He also noted the success a campus-based divestment campaign had a generation ago — the movement to force companies and universities to stop doing business with apartheid-era South Africa.
“It’s worked one time, really, in a big sense, and that was around South Africa 25 years ago.”
But critics argue that investments in South Africa were more vulnerable to moral pressure because few relied on them, while everyone in the United States depends on fossil fuels in one form or another.
“The divestment movement aims to be like the anti-tobacco movement, the anti-South Africa movement,” Mr. Hamill said. “It misses the point that because fossil fuels make up 80 percent of our energy here, we cannot easily divest from them. It would mean turning off the lights for everyone, and that’s just not the way to do it.”
Northeastern University associate professor Matthew Nisbet warned in a September article on climate activism that “this new mix of moral politics, personalized attacks, and line-in-the-sand political demands are not without major trade-offs and risks.”
“Blocking the Keystone XL oil pipeline, divesting from fossil fuel companies, and calling out ‘deniers’ make for potent cultural symbols, but such strategies can deflect attention from far more substantive goals,” Mr. Nisbet said in “Climate of Extremes, Part One: How Polarizing Global Warming Strategies Backfire,” which first appeared on the Breakthrough Institute website.
He also said that the moral argument is far less clear-cut than it was with South Africa.
As other analysts have noted, coal-generated power plants provide inexpensive electricity to rich and poor alike, but it’s the poor who would suffer most if energy costs rise as a result of carbon taxes or green-energy mandates.
“Reliable energy alternatives like hydropower or nuclear energy each also have their own moral trade-offs and risks,” Mr. Nisbet said. “A more effective strategy might be for universities to buy up, rather than divest, their shares in energy companies, thereby gaining more influence on industry practices.”
After last weekend’s Global Divestment Day, organizers at 350.org announced that more than 181 cities, universities and other institutions worldwide have committed to divestment. But Mr. Hamill says that metric is beside the point.
“Their success that they’re measuring is whether institutions are divesting,” Mr. Hamill said, “not whether we’re reducing carbon emissions.”