Today the New York Times Opinion Page features a four-way debate on the merits of fossil fuel divestment. NAS research associate Rachelle Peterson contributed an article to the debate, re-posted below.
College Divestment Is an Empty Political Move
Divesting from fossil fuels doesn’t make renewable energy more affordable or reliable. It tackles none of the presumed causes or effects of global warming.
Those who advocate for divestment say shareholder advocacy has failed to change the fossil fuel industry’s behavior, so schools should sell their stocks. The first part of that statement is true: Shell and Exxon are not going to quit drilling because some shareholders tell them to stop. But if the aim is to persuade the industry to convert to renewables, divestment is a worse strategy. Capital markets aren’t punishing fossil fuel companies — they have plenty of investors — and corporations have no incentive to heed ex-investors.
It is one of those campaigns that stir up people who want to feel like they are doing something, when, in truth, they are doing nothing.
So why has a call to divest achieved traction on some college campuses? Emotional appeal. Divestment is one of those campaigns that stir up people who want to feel like they are doing something, when, in truth, they are doing nothing.
This hard truth is insulated by activist rhetoric about political momentum. Bill McKibben, founder of 350.org, characterizes divestment as “revoking the social license” of fossil fuel companies by turning public opinion and policy against them. Naomi Klein, in her book "This Changes Everything: Capitalism Vs. the Climate," characterizes the movement as “just the first stage of this delegitimization process” that starts with stigmatizing the industry and ends with liquidating fossil fuel companies and reinvesting their capital into “solutions.”
As political psychology, co-opting universities as PR machines if they divest or oppressive adversaries if they don’t, is clever. Global warming activists aim to build a long-term constituency that despises fossil fuels and is primed to pursue every alternative no matter the cost. Divestment sidelines real debates about energy and climate policy by condensing them into polarized yea-or-nay decisions about finances. One divestment organizer deems the movement important specifically for its ability to “politicize” and “radicalize” students.
That thinking reflects more about desired outcomes of future presidential elections than about next year’s S&P 500 Energy Index, which is, incidentally, down 28 percent on one-year annual returns — due, not to divestment, but to an oil glut.
This article originally appeared in the New York Times.