The power and promise of divestment

As Arjun Raghuraman ’16 wrote in his column last week, climate change is causing grave harm to millions around the world, and it has similarly an incredibly devastating potential for future destruction. The humanitarian organization DARA estimates that our fossil fuel economy and the resulting climate change led to five million deaths in 2010 alone. However, Raghuraman missed a critical challenge of the climate crisis — the immensely short timeline in which unprecedented action must be taken. If we are to have a chance at avoiding a two-degree Celsius rise in global temperatures, which the United Nations set as the highest allowable level of warming, we must peak global emissions by 2020 and then decline emissions by at least three percent a year thereafter. In other words, the fossil fuel industry must leave 80 percent of its known fossil fuel reserves in the ground to avert irreversible climate catastrophe. Since UN climate agreements take several years to go into effect, the UN’s 2015 climate conference is likely the world’s last chance to create this type of vital change.

For decades, we have known the science and have been seeing the effects of climate change. For every month of my life, global temperatures have been above average; every year, world leaders have met to unsuccessfully develop climate agreements. For decades, scientists and environmental groups have lobbied politicians and tried to create change from within companies. These tactics are failing our generation and people around the world living with the impacts of climate change every single day. We are going in the wrong direction. Last year, global greenhouse emissions rose by 2.3 percent worldwide — for comparison, US emissions rose by 2.9 percent. There is no longer any excuse for inaction. Sweden generates 48 percent of its energy from renewable sources, and Denmark plans to obtain 70 percent of its energy from renewable sources by 2020. The debate on climate science is over, and we know the solutions. The greatest obstacle we face now is not a lack of solutions, but a lack of the social and political power necessary to keep the carbon in the ground and transition to a fossil-free economy.

We have failed because we were trying to beat the fossil fuel industry at its own game. We thought we could beat its insider-game politics, but the fossil fuel industry is one of the wealthiest industries on the planet. Climate groups simply will never be able to out-lobby or out-spend industry groups. We thought we could beat them through the market by shifting consumer demand away from fossil fuels, but these are immensely well-capitalized, oligopolistic firms that receive billions in subsidies and shield themselves from market competition. In 2013, one industry-backed group, ALEC, pushed 70 state-level bills to hinder the development of renewable energy. Even during the non-election year, the industry spent $156 million on lobbying efforts alone. They have the money, the lobbyists, and the infrastructure, but they do not have a monopoly on legitimacy. The most important social movements of the past century — civil rights, women’s suffrage, environmentalism — did not transform society by bankrupting or out-lobbying the segregationists, the patriarchs and the industry barons. They won because they delegitimized an unjust status quo, they shifted an entire political culture and opened the door to previously unwinnable change.

That is precisely the power and promise of social movements — and it is the only chance we have to stop the fossil fuel industry from dramatically altering life on Earth as we know it. Critics of divestment decry its symbolic nature, but our ability to transform what is legitimate and what is unacceptable — the power to make fossil fuel extraction politically unthinkable — is the most powerful tool we have in this fight. Indeed, it is our only hope against an industry that can out-lobby and out-spend anyone.

More than any climate campaign before it, the divestment movement has strengthened the climate movement and has allowed it to begin turning the tables on the fossil fuel industry. Hundreds of institutions have formed an unprecedented, diverse coalition, collectively declaring that continued investments in fossil fuels are antithetical to a just and sustainable future. The movement has been able to shift the thinking of the largest asset managers in the world — Blackrock, which created a fossil-free index option, and the Rockefeller family, which recently divested their endowment built off oil fortunes. As Donald Gould, an investment manager and the chair of Pitzer College’s Investment Committee, which divested last spring, described, “Acts of symbolism evolved from a dream to a possibility to a reality to an inevitability.” He uses the example of women’s suffrage — “We look back now and say, of course women have the vote, how could it be otherwise? The idea that we can as a planet come up with public policy on energy that helps mitigate the worst effects of climate change — we can’t give up hope that we can achieve that.” Just as the women’s suffrage movement transformed women’s suffrage from the unthinkable to the status quo, the divestment movement has the potential to do the same: transform the vision for a future free of deadly fossil fuels from the unthinkable to a political mandate.

Raghuraman’s suggestion that Swarthmore and other colleges actually invest more in the fossil fuel industry to “pressure the boards of fossil fuel firms” to reform provides a perfect example of exactly why current strategies are not working. Raghuraman suggests that this would allow colleges and universities to use shareholder resolutions to convince fossil fuel companies to “increase research and development in sustainable energy or adopt any other appropriate reform.” This type of strategy is useful in cases where the company can make simple reforms, such as improving labor practices. However, SEC Rule 14a-8(i)(7), states that corporations can throw out any resolution seeking to change their basic business models. The basic business model of the fossil fuel industry is to burn five times the amount of carbon that is allowable. If we are to stay below two degrees Celsius of warming in the future, that business plan must change. Exxon successfully threw out a shareholder resolution merely asking it to prepare a report considering the financial risks presented by the social and environmental costs of tar sands oil extraction because it related to the company’s “ordinary business operations.” Even the Rockefellers, who are heirs to the fortune of Standard Oil, the predecessor of Exxon, chose to divest after unsuccessfully attempting to convince Exxon to reform its environmental policies.

Divestment is now in the public eye, and there is no neutral choice here. As the college where the movement began, we are particularly in the spotlight. If we, Swarthmore, continue to invest in fossil fuels, then we implicitly deny climate science and signal to the world that fossil fuels are an acceptable investment, compatible with our values of justice and sustainability. This is the wrong message being sent at the worst time. These next five years are pivotal; the window for action is closing rapidly. As an institution, we should ask how we can maximally leverage our resources to meet the demands of the planet: to significantly reduce fossil fuel extraction and immediately begin a transition to renewable, green energy. Divestment is one of our most powerful tools toward that end.