Editor’s note: This article was initially published in The Daily Gazette, Swarthmore’s online, daily newspaper founded in Fall 1996. As of Fall 2018, the DG has merged with The Phoenix. See the about page to read more about the DG.
1. Climate Change and Fossil Fuel extraction demand social justice.
Climate change and fossil fuel extraction are deeply impacting people’s lives now. Communities across the United States surrounded by fracking sites, oil pipelines, or coal mines are facing contaminated water, extraordinarily high rates of cancer and heart disease, and birth defects. These communities impacted by extraction are disproportionately comprised of people of color and the poor.
Globally, increasing droughts and intense weather events lead to food shortages and force the emigration of entire island nations.
Climate change exacerbates already existing inequalities on both the national and global scale. The fight against climate change and the extractive industries is not just an environmental one, but also a struggle for social justice.
2. Divestment names the enemy.
The fossil fuel industry is responsible for climate change and the continuing failure of the world’s governments to do anything about it. The industry’s millions of dollars in campaign contributions have been repaid handsomely by billions of dollars in subsidies, artificially cheapening fossil fuels in relation to renewable sources. The only reason the industry is profitable in the first place is because unlike most other industries, it has been given license to pollute without paying for the health or ecological consequences of that pollution. Divestment targets fossil fuel companies and makes them responsible for actions they have have never been held accountable for.
3. A growing body of research shows that divestment is financially prudent.
A recent study by the Aperio Group analyzed the potential effects to the endowment of divestment from: 1) fifteen coal extraction and utilities companies, and 2) the entire industry – oil, gas, and consumable fuels. The results of the study showed that the impact of either option on risk and returns “may be far less significant than presumed.” For the first option, which only looks at fifteen companies (Swarthmore Mountain Justice is asking for divestment from sixteen companies), divestment would incur “virtually no risk penalty.” Another recent report by HSBC estimated that fossil fuel stocks are overvalued by 40-60%, making them a risky long-term investment. Though no study can predict the future of the stock market, Swarthmore’s Board of Managers can no longer summarily dismiss divestment on the grounds that it would cost the College money.
4. Divestment has a track record of success.
In the 1980s, a nationwide divestment movement led the United States government to withdraw its support from the South African apartheid regime. 155 colleges and universities, including Swarthmore, divested from apartheid. Grassroots pressure for divestment translated into political pressure on Washington. After years of governmental inaction, activism around South Africa became so widespread and powerful that a Republican-led Senate passed the 1986 Anti-Apartheid Act over Ronald Reagan’s veto.
5. Fossil fuel divestment is already building political pressure.
There are over 250 colleges and universities across the country with divestment campaigns, and three schools — Hampshire College, Unity College, and Sterling College — have already divested. Churches and pension funds are also joining the movement! The city of Seattle has begun to divest its $1.9 billion pension fund from fossil fuels. This activity is being noticed in Washington — Senator Sheldon Whitehouse recently mentioned the divestment movement on the Senate floor to back up his calls for climate legislation.
6. Fossil Fuel Divestment is the largest U.S. student movement in recent memory.
It’s the fastest-moving student environmental campaign of the past decade, possibly ever. Over two hundred schools joined the movement last semester alone.
7. The movement is converging on Swarthmore this coming weekend.
This weekend, 170 students from 72 schools will be on campus for the Power Up! Divest Fossil Fuels Student Convergence. There will be exciting talks, lectures, panels and actions demonstrating the importance of this issue and developing a strategy to translate divestment energy into national political pressure. Come kick off the weekend by joining in Friday’s silent solidarity march, beginning on Sharples patio at 12:45 p.m.
8. The movement is collaborating with other struggles against fossil fuels.
This past weekend’s Keystone XL pipeline protest, struggles against mountain top removal and fracking, campaigns to shut down coal-fired power plants, and many other actions are working together to urge the government to act. Many of the speakers at the convergence will emphasize the necessity of collaborative action in fighting the fossil fuel industry.
9. This movement is going to win!
We know this movement is going to win because the alternatives are too harrowing to imagine. If climate change continues unchecked, our civilization will be fundamentally transformed for the worse. People around the country and the world are coming together to demand a better future.
10. The movement started right here in Swarthmore.
We were the first school to start a fossil fuel divestment campaign!
Written by Morgan Bartz, Benjamin Bernard-Herman, Alexis Dziedziech, Will Lawrence, and Pat Walsh.
Oh yes, if HSBC, the firm recently fined 1.8 billion for doing deals for terrorists and drug cartels bets that fossil fuels are overvalued, that “must make them a risky long term investment!” But terrorists aside, seriously, who gives a shit which stocks some analyst at HSBC picks?
“But terrorists aside, seriously, who gives a shit which stocks some analyst at HSBC picks?”
I came here to say this. Seriously, HSBC’s research platform is a joke. Even if you ignore the entirety of their research platform, what sort of credibility does this specific research analyst have? Institutional Investor Awards? History of accurate industry calls?
Even going beyond the credibility aspect, what about the actual research? What are his assumptions? What is the likelihood of his downside scenario? Just taking a glimpse, according to the downside scenario for BP, 6% of their reserves are at risk. It doesn’t fully compute that this would suggest overvaluing of 40-60%. What makes these at risk reserves more valuable than the other 94%? This guy is clearly making some other crazy assumptions that are unclear.
Side note: If potential supply of gas is cut by international regulations due to inoperable reserves, you would expect price to go up. Price is 100% incremental to operating income, all else equal. Pretty much no matter how you value oil/gas companies (DCF, multiple analysis, or replacement value of reserves), I would think expectations for higher pricing would elicit higher valuations. Also, commodity stock momentum is generally driven by pricing expectations, not volume, from my experiences.
So basically, I think this analyst is full of shit and just looking to make a name for himself with a contrarian call.
I would comment on some of the other points, but its really just drivel. I should hope that the organizers of this movement can at least come up with some better bullet points and supporting evidence. Also, please read the seeking alpha article someone posted below.
heard it hear first folks
We must become more aware of the consequences of our intended actions. Divestment is a two-edged sword.
http://seekingalpha.com/instablog/524881-aaron-hoddinott/119456-the-renewable-energy-sector-will-be-dominated-by-big-oil-companies
Interesting Op-Ed, Renewable Energy Researcher. I would like to draw your attention to one of the points of the article.
“Big oil companies can afford to spend billions on R&D given the mass amount of profits they’ve made from oil. $1 billion annually on [Research & Development] is peanuts to the big oil companies, yet that kind of cash can go a long way in developing an economic renewable energy source.”
Peanuts. Imagine the progress and headway alternative energy sources would be making if this issue was given real weight. Of course “Oil companies” want to dominate the energy industry. But they will do it on their terms and when it is convenient for them. If they were investing any significant amount of their time into actually developing new technologies and energy means, we would be in much different place–possibly because of the awesome new machines we could drive and the more productive energy that would get us there, or possibly because of the less harsh impact these alternatives would have on world, ie. in the form of carbon emission.
*Divestment is not about hurting the fossil fuel industry economically, it’s about pushing for proactive responses. It’s about making issues like renewable energy which has not been given nearly enough investment, thought, or innovation and making it a viable player in the field.
I greatly appreciate your comments, as you make a very good point regarding the disparity between how much alternative energy research is being done and how much more of this research can and should be done. In addition, I find your perspective on divestment both enlightening and reassuring. It seems I have clumsily envisioned the energy divestment movement operating under the pretense that the goal of pulling investments away from these huge companies was to harm them financially forcing them to change. I am now more interested in divestment now that I realize “divestment is not about hurting the fossil fuel industry economically.” Hopefully, we can all come to this understanding and focus our collective efforts on sustainable solutions that can ameliorate our transition into a renewable energy society.
Divestment _would_ be something with totally nebulous goals (“pushing for proactive responses??”). If we’re going to shoot our endowment in the foot, we better be getting some rainbows or glitter or something. So far, it seems like we’re just getting BS.
Bad op-ed, Renewable Energy Researcher. I would like to draw your attention to one of the points of the article.
“These ‘oil companies’ are no different than Google is to the internet. ”
The biggest difference between “oil companies” and Google is that Google doesn’t have trillions of dollars in assets that will be destroyed by a meaningful breakthrough.
Thank you for bringing up this quote. When I first read the article, it struck me as a bit equivocal and in several ways untrue. But alas, an analogy is only as true as the conceptual framework within which it operates. I agree with you that this analogy has its defects, but if one were to stop and really consider the possibilities, are Google’s multi-billion dollar assets truly impervious to meaningful breakthroughs? Would it be that outlandish to imagine a smaller company making a breakthrough that would destroy the dominance of Google, let’s say by utilizing new mobile applications to deliver more relevant information faster to people’s fingertips? You may be thinking that this what-if misses your point, but to say that a big difference exists between oil companies and Google also would be to miss the point of why the analogy was drawn. From my perspective, the real reason the author wanted to create this analogy was to illustrate the fact that these “oil companies” are not actually in the business of purely selling oil, just as Google is not actually in the business of purely providing search results. It might be easy for us to place the “evil” label we have come hear so often on companies like Chevron, Exxon, and Shell, but at the end of the day, we mustn’t be naive nor oblivious to their true intentions. “These companies want energy to sell to the people of the world. They don’t care what kind of energy it is, so long as it’s profitable.” The article as a whole paints a picture of these companies that many of us don’t want to hear; after all, surely enemies must be declared, right? Ultimately, with the significant energy and environmental challenges facing our generation, I believe that making enemies is the last thing we want to do.
I’d like to respond to point #9, “This movement is going to win!” This is the most vapid and meaningless argument I have heard from an already vapid and meaningless movement. Seriously, how in God’s name do the admittedly dire consequences of climate change dictate that movements to counter must succeed? We’re facing a long term problem here, and it’s almost certain that we’ll fail. Not to mention the pointlessness of divestment as a movement to combat climate change.
So in short, check your optimism.
No one should ever be optimistic about an issue s/he is confronting. Just give up.
Right, Robert Solow?
Sorry that optimism annoys you so much.
At least solo cups are useful. Check your capital fundamentalism at the door!
The most recently developed wind-turbine technologies have brought us wind-produced energy which is more cost efficient as well as more widespread. More state-of-the-art wind energy technologies are typically more market competitive with conventional energy technologies. The newer wind-power technologies don’t even kill birds like in days of old! Wind energy production is a growing technology, and companies engaged in it would make up an excellent part of a growth or aggressive growth portfolio.:
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I am an old man but I am excited by the attack on companies that produce fossil fuels because it will bring the economy of imperialist America to total collapse in my lifetime while we back here in China burn fossil fuels and get rich and powerful.