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.
Dear Swarthmore Board of Managers,
As history students at Swarthmore College, we support the campaign to divest our school from the fossil fuel industry. Our classes in the Swarthmore History Department have taught us about the appalling long term impacts of resource extraction. From the coalfields of Appalachia that prompted the second largest armed rebellion in United States history, to the oil reserves of eastern Europe that caused some of the bloodiest battles of both World Wars, to the overseas fueling stations of imperial Britain, fossil fuel extraction has been inextricably linked to histories of colonization, racism, social marginalization, and ecological degradation. Stephen Bensch’s classes on medieval Europe and the Mediterranean have demonstrated that resource competition has fueled expansionist warfare and slavery for millennia, and Allison Dorsey’s work on the American West has exposed the links between environmental managerialism and the oppression of minorities in the modern era.
Our history professors have taught us how to unpack the myths of the fossil fuel industry. The discussions they lead and the texts they assign have shown us through example after example that resource extraction is not just about turning on the lights or about running our cars. Robert Weinberg’s courses on Russian and Soviet history have shown how fossil fuel elites employed common rhetorical strategies—evoking images of national renewal, scientific progress, and social fulfillment—across multiple regimes with vastly different political ideologies. These themes remain as potent for the propaganda purposes of contemporary extraction companies in the United States as they ever were in Tsarist or Soviet Russia. Pieter Judson’s courses on nations and nationalism have shown us that fossil fuel extraction, whether in interwar Galicia, Nazi Germany, or fascist Romania, is always about dispossessing communities of their basic rights. It’s about calculating the financial gains but leaving out the human and environmental costs. It’s about buying off policymakers and monopolizing even the most democratic of political systems. It’s about money, influence, and the destruction of our planet.
While we may have learned about resource extraction in our history classes, we know that it is anything but an issue of the past. Shane Minkin’s work on postcolonial North Africa and the Middle East has shown how old power struggles over fossil fuel holdings continue to dominate the region today. Farid Azfar’s courses on early modern Europe and the rise of capitalism have taught us about the increasingly global nature of resource exploitation, and we know from Lillian Li’s class on modern China that fossil fuel development and the massive pollution it engenders affect developing countries just as much as the industrialized West.
The fossil fuel industry of today is more powerful and destructive than ever. Extreme practices like mountaintop removal and fracking threaten lives, communities, and ecosystems in our own state of Pennsylvania. The greenhouse gas emissions that are the lifeblood of the fossil fuel industry are responsible for massive climate change that has already unleashed droughts, floods, and superstorms across the globe. And as has always been the case with the environmental effects of resource extraction, it is those least responsible and least able to adapt who will confront the worst impacts of changing weather patterns. William Turpin’s courses on Greece and Rome have shown that this was true in the ancient world. And as we have learned from Tim Burke’s courses on Central Africa and Robert DuPlessis’s class on the Caribbean, in the pursuit of natural resource wealth, bureaucratic elites, military personnel, and international investors routinely label local populations as inferior and dispensable, causing them to disproportionately suffer from famine, disease, and forced migration.
Our classes may have demonstrated the enormity of the problems inherent to fossil fuel extraction, but they have also equipped us with the tools necessary to approach a viable solution. If history has taught us anything, it is that major social change comes about not from above, but from broad based movements. Marjorie Murphy’s courses on union struggles and contemporary social movements have made clear the ability of mass mobilization to disrupt business as usual. The hard-won fights for the eight hour day, civil rights, and the right to collective bargaining demonstrate the power of many to challenge industry standards. Bruce Dorsey’s courses on United States history and Diego Armus’s classes on Latin America have identified grassroots organizing and local activism as sites of crucial resistance among those marginalized or displaced by imperialist ideologies.
Swarthmore College, with its Quaker heritage and strong tradition of social activism, should know the value of collective action better than most. Student-led campaigns for a Living Wage, the establishment of the Intercultural Center and Black Cultural Center, as well as earlier generations of students’ robust involvement in the civil rights movement are all intimately connected with the college’s foundational mission. They draw on the passion for innovative learning, peace, and social justice that guided the committed abolitionists, women’s rights activists, and pacifists who established our institution one hundred and fifty years ago. Just as many Swarthmore students, faculty, and staff have taken meaningful action against injustice, we too refuse to support a status quo that exploits people and land for profits and that threatens the viability of our collective future. Business as usual—in terms both of the fossil fuel industry and of Swarthmore’s current investment practices—cannot be allowed to continue.
Through fossil fuel divestment, Swarthmore should affirm its core values as well as its position as a leader in higher education. Such bold public action would add critical weight to the divestment campaign spanning more than 300 campuses across the country. By inciting us to rethink how we relate to energy, the economy and one another, divestment has the potential to change today’s national conversations about resource extraction while building the political pressure key to enacting substantive climate legislation.
As history students, we draw on a rich history of struggle in those communities historically and currently affected by resource extraction, and we act in solidarity with their resistance. Frontline communities have challenged the fossil fuel industry for centuries, making change on the picket line, in the union hall, and in the jail cell. Divestment is just one, crucial piece of a broader movement for climate justice, and it is our chance to stand on the right side of history. Just as divestment helped bring down South African Apartheid, we believe that today, it can help save our planet. We look forward to attending the Board of Managers meeting on May 4, where we hope you will commit to a concrete plan for divesting Swarthmore’s endowment from the fossil fuel industry.
Op-ed submitted by Kate Arnoff ‘14, Ben Goossen ‘13, Alison Roseberry-Polier ‘14, Aaron Freedman ‘14, James Ivy ‘14, McWelling Todman ‘14, Alexandra Willingham ‘15, Maria Mejia ‘15, Sarah Diamond ‘13, Charles Hepper ‘13, Zachary Nacev ‘13, Thomas Powers ‘13, Emily McAfee ‘13, Emily Rosen ‘13, Emma Thomas ‘13, Marjani Nairne ‘13, Thomas Boucher ’14, Jusselia Anais Molina ’13, Robert Fain ’14, Amanda Beebe ’15, Nicholas Borkowski ’14, Andrew Hernandez ’13, Eva Taeubel ’15, Alejandro Sills ’13, Daniel Browning ’14, Rachel Berger ’16, Thera Naiman ’14, Kira White ’13, Treasure Tinsley ’15, Andrea Jacome ’14, Jessica Arian ’15, Anna Stitt ’13, and Julia Finkelstein ’13.
History majors and minors who would like to sign the letter to the Board of Managers can do so here.
A reasoned and, at root, passionate exposition of why the College needs to consider fossil fuel divestment. Thank you, history students, for taking your education and commitment to social/environmental justice seriously. Thank you for actually living and sharing the extraordinary privilege of your Swarthmore education!
This op-ed answers the question of “why fossil fuels are bad” (something we’ve been taught since fifth grade), but fails to address the question of why divestment would solve anything. It wouldn’t. It would have little to no effect on the companies in question, but could have a significant impact on our endowment.
I don’t know about you, but I’m not ready to risk (more) tuition hikes and financial aid reductions for a campaign which has no guarantee of actually making a difference.
Hey Preston,
Just so you know who I am and where I am speaking from–I am a member of Swarthmore Mountain Justice and a signatory on this letter, but am speaking for myself, not the group.
I would disagree with you that there will be no impact on fossil fuel companies. Certainly, the financial impact will be negligible, but divestment is part of a social movement, one with the power to shift conversations around environmental and climate justice and bring attention to the repeated injustices perpetrated by the fossil fuel industry. Already, the 300+ student campaigns and 10 cities that have divested their pension funds have shifted a lot of conversations nationally around these issues. Our hope is that as our campaigns continue, the movement against fossil fuel extraction will strengthen, leading to government action and a move towards an alternate system that does not treat human lives and the planet as disposable. People have been pushing for government legislation, moratoriums on various forms of extraction, and environmental justice more broadly for a while now, with limited success. Divestment is one part of this struggle that, as you say, is clearly an important one. Our hope is that by joining this movement, and building public pressure, we can support the organizing that is already being done and can begin to see concrete changes in the way that energy gets produced and consumed.
As for the risk to our endowment and financial aid: there really isn’t one. We are asking the school to divest less than 1% of its endowment. This money will be invested somewhere else. There’s a slight chance that this means we’ll have slightly lower returns on the endowment next year, but the difference would be minimal, and returns fluctuate on an annual basis anyway based on a number of other decisions that our investors make as well as changes in the market. To attribute any change in investment returns to pulling a small amount of money out of a mere 16 companies doesn’t make sense. Furthermore, I truly don’t think that financial aid would be the first thing to get cut. Financial aid is something I value deeply, and something that I think is essential to social justice values and the commitments of this college. If, for some strange reason, Swarthmore did have to make cuts, I hope and believe that financial aid would be the last, not the first, cut that they made.
One more small point is that various investment professionals (who aren’t connected to environmental organizing) have been coming out with studies saying that fossil fuel companies aren’t even very good investments right now. Funds that don’t invest in fossil fuels are doing very well, even better than ones that do have fossil fuel stock. Schools that have divested have seen a flood of donations in response. While I don’t think we should divest BECAUSE it would be financially beneficial, there is plenty of evidence to say that it could be.
Thanks for you comment, Preston. As a student who has been able to attend Swarthmore because of its generous financial aid policy, I completely agree with your concern. However, I do not believe that divesting from fossil fuels would significantly impact our college’s endowment. The last time we divested–from South African Apartheid–the endowment continued to perform just fine.
In fact, there’s actually a likelihood that Swarthmore would see tangible benefits from divestment. By reinvesting in green revolving funds, for example, the college would be able to replace aging infrastructure and create a more sustainable campus, resulting in long term savings. Even if divestment were to have zero impact on fossil fuel companies (which I think is unlikely), Swarthmore would still be better off investing that money elsewhere.
In any event, the first step in the divestment process would be to complete a comprehensive analysis of how Swarthmore’s endowment might(or might not)be affected. Until such a study suggests otherwise, all available evidence points to the conclusion that divestment would not pose a risk to financial aid.
Ben G:
Um, that’s not actually how divestment (or revolving funds) work. We assume the college is investing their resources to maximize return on investment. Any re-allocation of resources whatsoever in the pursuit of other objectives might be maximizing something else, but it’s certainly not money available to the college.
You might argue – as Will has – that the financial losses from substituting away from this return-maximizing strategy will be negligible. You can’t argue that re-investing elsewhere – particularly in revolving funds, which make no sense whatsoever in the context of a college endowment – will expand opportunities for infrastructure investment and etc. for the college. That’s incorrect. It’s also pretty silly.
Swarthmore doesn’t manage the endowment. It is managed by outside hands and is tied up with a lot of outside money. Swarthmore’s endowment isn’t large enough to justify internal management from the perspective of return, so opting out of this system for the purposes of realizing social objectives in our endowment is itself a cost.
Ali:
“One more small point is that various investment professionals (who aren’t connected to environmental organizing) have been coming out with studies saying that fossil fuel companies aren’t even very good investments right now. Funds that don’t invest in fossil fuels are doing very well, even better than ones that do have fossil fuel stock.”
Um, no. There is no evidence whatsoever that green companies, on average, have outperformed energy companies with respect to return on investment. I should remind you – though it won’t change conclusions much – that the endowment doesn’t engage in speculation, so what we’re concerned about is dividends. Show me evidence that green companies yield higher dividend returns on average than green companies. There are arguments to be made in favor of the fulfillment of social objectives (maybe), but the casual suggestion that our endowment’s being invested sub-optimally smacks of arrogance of the highest degree. The notion that fossil fuel companies repeat high dividends goes hand-in-hand with the insane profit margins MJ and etc have (rightly) complained loudly about in the energy industry – you can’t argue both ways.
The extent to which MJ and etc are governed by dogmatic adherence to ideology will never cease to amaze me
Mike, I think the point Ben was making was actually the same one that I did re. the possibility of some of the divested funds being transferred into a green revolving loan fund. In the event that we were changing fund managers, we would be able to divert a few million to that purpose if we chose to. As I mention (with citation) below, there is widespread precedent at other colleges and universities for endowment funds to be used for this purpose, with high returns as a result.
And, as Ali said, there are lots of studies coming out arguing that fossil fuels are significantly overvalued as a long term investment. See the Carbon Tracker Institute and HSBC’s ‘stranded assets’ report.
Hi Will,
Switching fund managers is not free. It costs money. Unless you can provide evidence otherwise, our current strategy reflects the reality that our endowment is not big enough to merit individual management when solely considering return-on-investment. To the extent that our own management of the fund raises the overhead and/or reduces returns, there’s a cost associated with the flexibility of being able to choose social objectives.
Oh, gee, Will, you’re telling me “Carbon Tracker Institute” suggests energy companies should be invested in more than is commonly considered?
Will, neither of us are investment bankers. I trust that the people who are managing funds are doing so to maximize returns. You’re implicitly assuming they’re wrong.
By the way, the your stranded assets report has nothing to do with return-on-investment this year… or next year, or the year after that. The point is that they identify energy companies whose value they expect to decline in coming years. In other words, this report says nothing about return-on-investment, but it does say that *you* know nothing about return-on-investment.
Do you think that the Carbon Tracker Institute is an unbiased source to, uh, identify the return-on-investment associated with various corporate entities, or are you so delusional as to think the entire world is as ideologically hell-bent as you have repeatedly shown yourself to be? The notion that I’m spending 15 minutes of my time trying to explain this to you is ridiculous for more than a few reasons.
Return on investment is not subjective. It is arithmetic.
http://money.cnn.com/magazines/fortune/fortune500/2011/performers/companies/bestinv/10yr.html
Note that fund management involves risk and is thus a lot more nuanced than this. That’s why I trust the fund managers to maximize returns over a handful of entitled college kids with an agenda.
Good luck with the real world!
Love,
Mike
Also, to emphasize the point made earlier, revolving loan funds have no place whatsoever in a college endowment. Anyone who actually knows what a revolving loan fund *is* will think that suggestion is either cute or laughable (but in no way serious).
The College is not really liquidity-constrained. We don’t have to worry about our endowment being so illiquid that run into operational constraints (though it is a lot less liquid than you have at times pretended it to be here). Further, who are the funds ‘revolving’ to? Are we making loans to ourselves for the purposes of infrastructure investment? Why not finance school investment from returns on the year, which won’t erode (or in any way affect) the base endowment?
Investing the endowment into revolving funds is a silly idea proposed by someone who doesn’t fully understand the consequences of what they have said, which in a way is a nice microcosm of this whole divestment debate.
Preston, thanks for raising this point. I have a few responses.
Firstly, it’s incorrect to assume that the primary goal of divestment is directly affect the fossil fuel companies financially. The point of divestment, as the letter states, is “change today’s national conversations about resource extraction while building the political pressure key to enacting substantive climate legislation.” The widely-cited precedent is Apartheid divestment. The national divestment movement built political pressure that contributed to the passage of the Anti-Apartheid Act in 1986 (through a Republican congress, no less). This was an unforeseen victory after years of federal intransigence on the issue–similar to what we have now with energy policy.
Second, there’s no reason why divestment would result in tuition hikes or financial aid reductions. A recent study by the Aperio Group demonstrated that divestment from fossil fuels only increases portfolio risk by 0.01% (http://bit.ly/WeRLzv). We have one of the largest per-student endowments in the country, so this negligible increase in risk wouldn’t need to result in budget cuts or hikes of any kind. We can also find profitable and sustainable solutions like re-investing the divested money into efficiency improvements on-campus, which have an average return of over 30% (aka a GREAT investment).
Finally, on “making a difference”: The divestment movement is already making a difference by changing the conversation and emphasizing the urgency of these issues. Actual divestment by Swarthmore will propel the movement forward. Sure, it won’t solve the problem completely, but no single thing will. Climate change and environmental racism are “wicked problems”–no one action will solve them. That’s why we need every tool in the toolbox, including divestment, to solve them. Bottom line, climate change and environmental racism are moral crises that demand immediate action. If we see environmental “sacrifice zones” in communities of color as unacceptable, if we see global climate change that displaces entire nations as unacceptable, then we need to act. We don’t know exactly what the transition to a clean and just energy system looks like–and that’s okay. The first step in finding out is to remove political power from the fossil fuel industry by reclaiming OUR power as people committed to finding a better way. Divestment is part of that project.
Phew that was long! What do you think about this, Preston? I’m interested to hear your thoughts.
Question, Will: What is an “efficiency improvement”?
More efficient use of energy on campus. Such as: insulating buildings to they’re cheaper to heat in the winter and cool in the summer, transitioning to more efficient lightbulbs, moving to a cleaner source of fuel for our physical plant, buying more fuel-efficient vehicles, etc. All of these measures reduce emissions, and save money in the long run as well. In other words, a sustainable and very profitable option for some of the money we divest. Here’s the source for this info: http://bit.ly/13ybM5c.
Hey Preston,
Yes, you may have have learned about climate change at a young age, but unfortunately, I doubt many fifth graders are being taught about the interconnectedness of climate change and systems of power, inside and outside the U.S., which is what this op-ed is referencing. Love the snark though…jk!
Anywho, the answer to your question about how divestment would solve anything is here: http://swatmountainjustice.files.wordpress.com/2013/04/fossil-fuel-divestment-101_may-2013.pdf
Divestment sets a terrible precedent for a fund that helps cultivate great minds and gives the potential for REAL change.
Dropping fossil fuels from the portfolio only gives opportunities for people like me to swoop in and make more money on their positions. It doesn’t change the fundamental demand for fossil fuels and the companies’ resulting intrinsic values.
You know what might actually lead to change? An engineer or scientist that develops a renewable energy source with economics that work without subsidization. Obviously your history classes failed to address how business economics can drive the substitution effect.
Absolutely correct. What kind of weight was the history department supposed to have here? If you’ll excuse me, I’ll be busy drafting my Op-Ed, “Economics students for an end to moral superiority”
From one of your fellow majors: http://daily.swarthmore.edu/2013/02/15/why-mainstream-economists-should-take-a-step-back-from-the-divestment-conversation/
From Ben’s article:
“If you believe that as global warming gets worse, our country will eventually take meaningful environmental action, then you should also believe that fossil fuel stocks are overvalued. Currently, the stock prices of firms that make profits from extraction assume that all found reserves will be burned.”
Does anyone really think when they read these articles? This is a 100% unsubstantiated claim. Show me the models!
http://carbontracker.live.kiln.it/Unburnable-Carbon-2-Web-Version.pdf
Let me preface this by saying I have no idea what I’m talking about. But a possible response to your point (which is completely valid, and one that I’ve struggled with in deciding about divestment) is that we have to keep in mind the domino effect (or whatever stupid cliche you want to use to describe it).
If Swarthmore is the only college, university, institution, or individual in the United States to divest itself of the fossil fuel industry (as I understand it, petroleum companies, companies that participate in hydraulic fracturing for natural gas, etc.) nothing will change. I completely agree with you that “It would have little to no effect on the companies in question.” (I’m not so sure if it would “have a significant impact on our endowment” but I’m not going to deal with that aspect of the problem in this response: I hope somebody else can address it.)
However, Swarthmore’s divestment would certainly draw national attention. We’ve already seen this semester how Swarthmore Mountain Justice’s actions got Swat in the New York Times, and a full divestment, rather than just movements towards one, would certainly create even more publicity. This publicity isn’t valuable in and of itself, but hopefully it would lead to the beginning of a conversation (at least among the leaders of small, elite, private American liberal arts colleges) about divestment. Swarthmore’s divestment might lead Williams to follow suit, which in turn might draw in Pomona and Oberlin, and eventually universities such as Yale might succumb to the the call of divestment as well. Once one major university has divested, others might follow, leading other endowed institutions (or even individuals) to divest.
Thus, Swarthmore’s divestment would, through a combination of “peer pressure” and giving others the courage to take action, potentially lead to a much wider divestment movement. I know this sounds idealistic, and it is. Furthermore, I have no idea what the time frame would be like on this process. It might take decades to achieve a critical mass of schools to make widespread divestment a real issue or possibility. And of course another recession or other financial problems would likely lead schools and institutions to cling more tightly to their oily endowments and make divestment seem insane, especially if it is true that, as you say, divestment would lead to “(more) tuition hikes and financial aid reductions.”
As I said at the start, I have no idea what I’m talking about, scientifically, socially, or financially. These are just my vague philosophical ideas about how the world works, or should work. Nonetheless, it seems to me that we have a concrete example of effective divestment in the case of South Africa in the 1980s. A single school divesting from South African businesses did little to harm the interests of that country’s apartheid regime, but one school led to another, and another, and soon enough the combination of political and economic pressure had played a not-insignificant factor in drawing international condemnation of apartheid and leading to its end.
The domino effect, in other words.
My god, there’s not even anything of substance here for me to troll.
Nothing here is my God troll material.
Pennsylvania is a commonwealth, not a state.
Lovely article otherwise.
Cities are now jumping on the bandwagon to divest from fossil fools…http://org2.salsalabs.com/dia/track.jsp?v=2&c=Xc25Ncr5ng9YGSRDtANqbKi3HC%2FV1YKl
Pretty well written, but there’s one glaring thing that I can’t get over: Why use exclusively history majors to back these ideas up? I don’t see what authority they have over anyone else (a chemistry major, a GSST major, an art major, what have you).
This is like having a bunch of undergraduate econ majors band together to tell the government stop cutting public spending because Paul Krugman (or whoever their Econ professor is) told them that it is the right thing to do.
Hey Writings,
The idea is that this will be one of many departmental letters to follow! The History Department doesn’t feel have any particular “claim” to supporting divestment, but happened to be the first to do so. Other departments’ connections to the issue would touch on many more, valuable facets of the issue that the discipline of history doesn’t deal with in its day-to-day. Thanks for asking!
Kate