In 2013, I was skeptical of divestment. I reasoned through simple, and undoubtedly naïve, cost-benefit analysis that the expected gains in terms of direct reduction of fossil fuel consumption did not outweigh potential losses faced by the college. Nevertheless, I decided to vote in favor of partial divestment.
In my opinion, the strongest argument against divestment is that it will not directly lead to the reduction of fossil fuel consumption. I still believe this is probably true, but I recognize that this is a severely limited view on the potential benefits of divestment. Is the average American paying attention to Swarthmore’s endowment? No. Are they paying attention to the divestment movement? Probably not. But the average American does know about climate change, and divestment has to be included as part of the larger movement to combat the irreversible human-induced damage to our planet. Although Swarthmore’s commitments to reducing its carbon footprint, including the Sustainability Framework, are admirable, climate change will not be solved by individual self-restraint. It requires a global movement that begins and ends with societal perceptions of fossil fuels. It’s easy to dismiss divestment by claiming that nobody pays attention to the movement. But, when we look back years from now, it’ll be incredibly difficult to justify why we did not divest.
What I find most frustrating is the assurance that maintaining our investments in fossil fuels is the way to “yield the best long term financial results.” I won’t go so far as to say the divestment will be absolutely profitable, nor will I claim to know more about investment than the Board of Managers. However, they are not the only authorities on the subject. Expert views on the cost of divestment are more mixed than conclusive, and, more importantly, there is real financial risk involved in maintaining our holdings. Even if we take the Board of Managers own $200 million shortfall as divestment’s worst possible outcome, who’s to say that retaining our holdings is safer?
Solar prices have fallen below wind prices in developing countries. BP’s 2017 Energy Outlook expects the number of electric vehicles to expand from 1.2 million in 2015 to 100 million by 2035. An (albeit optimistic) Grantham Institute at Imperial College study expects demand for coal and oil to peak in 2020. We are biased to expect past trends to continue unchanged, and if they don’t, we should be very concerned about being left holding the empty oil drum. Professionals with billions of dollars at stake failed spectacularly in 2008, and I don’t see any reason to believe massive strides in our ability to avoid herd mentality and predict the future have been made in the last decade.
It remains to be seen why we as students should be forced to accept the judgment of professional investors when there is no clear consensus in the expert world. If we believe students deserve any say at all in how the endowment is invested, why can’t partial divestment be an appropriate compromise? An 80 percent vote in favor of divestment from 55 percent of the student body deserves more than an immediate dismissal; there should be real debate.
Divestment won’t drive fossil fuel companies to financial ruin. Still, whether due to a whirlwind of technological development or an uptick in visible damage from natural disaster, the consumption of fossil fuels is going to have to end sooner or later. If we are truly concerned about long term financial results, the real question shouldn’t be “why divest?” Instead, it should be “why not divest?”
Why the Board should listen to the divestment referendum
