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Why Divestment?

Written by members of Haverfordians for a Livable Future

On Monday, we (Haverfordians for a Livable Future) noted our opposition to the Board of Managers’ decision not to pursue further consideration of fossil fuel divestment and our decision to continue our campaign. As such, we feel we owe the Haverford community an explanation of why we selected divestment as our tactic of choice and what we think it will accomplish. In a nutshell, our advocacy of divestment is rooted in our conclusion that the only remaining substantive barriers to adequately addressing climate change and the destruction of communities on the frontlines of fossil fuel extraction are political, and that in the absence of widespread pressure from both the grassroots level and civil society, our political system will likely fail to safeguard a livable future for both our generation and all subsequent generations.  In light of this picture, and the empirically documented high rate of success divestment has had at engendering policy change in past campaigns, we believe divestment provides Haverford and its peer institutions with an almost unique ability to help preserve a livable future.

But to begin with, why are we so sure that such a complex issue ultimately boils down to a matter of politics? Mainly, because there are no longer any substantive technological or economic barriers to taking strong action to mitigate climate change through the initiation of a full-scale transition away from fossil fuels. Indeed, as a comprehensive 2012 DARA study on the impacts of climate change as well as traditional forms of fossil fuel pollution found, “[e]ven the most ambitious reductions in emissions aimed at holding warming below 2°C generates economic benefits for the world economy after accounting for the costs of reducing emissions,” and that “prolonging change only increases costs.” Similarly, a 2013 University of Delaware study found that not only is it possible to power a large scale electricity grid 99.9% of the time solely with wind and solar energy, but that “aiming for 90% or more renewable energy in 2030 … leads to economic savings, not costs.” And as a 2009 University of Massachusetts Amherst study found, doing so will also create jobs, because on average “[s]pending a given amount of money on a clean-energy investment agenda generates approximately 3.2 times the number of jobs within the United States as does spending the same amount of money within the fossil fuel sectors.” This means that not only is the fossil fuel industry depriving us of a livable future to enrich themselves, in the process they are also leaving us with less wealth and fewer jobs.

The reason the fossil fuel industry gets away with this is because thus far they, and their allies in political office, have been able to shield the industry from having to pay for any of the monetary costs of carbon pollution, as well as most of the monetary costs of traditional pollution. Instead, they force the general population (and disproportionately the poor and people of color living in frontline communities) to shoulder the resulting “externalized” costs of their business practices, thereby also distorting the energy market in a way that allows them to unfairly undersell clean energy. Thus, the only remaining barriers to the comprehensive action we need to address climate change and devastation of frontline communities are political. This includes the oversized political power of the fossil fuel industry itself, but ultimately the primary barrier is the current political climate (though of course the two are linked) in which the idea of actually making the industry pay for the full costs of its business practices or of passing any other sort of strong, comprehensive climate policy is unthinkable.

As it turns out, divestment is particularly suited to breaking through these kinds of barriers, and it is here that its true power lies, rather than in the fairly negligible direct financial impacts it causes. Indeed, one of the authors of a recent University of Oxford study on the effects of divestment noted that “[i]n every case we reviewed, divestment campaigns were successful in lobbying for restrictive legislation” affecting the targeted firms. That is to say, divestment campaigns historically have had an extremely high success rate when it comes to engendering policy change. As the study explains, this is because divestment engenders a change in the political climate (no pun intended) that makes both cozy relationships with the fossil fuel industry and the appearance of serving their interests through stymying climate action dangerous political liabilities. At the same time, this “political climate change” that divestment induces also creates political space for bolder and more comprehensive climate policies which otherwise would not have existed.

This in fact is probably the reason why President Obama implicitly endorsed the fossil fuel divestment movement with his “invest, divest” comment right after stating that “[w]hat we need in this fight are citizens who will stand up and speak up and compel us to do what this moment demands” during his June climate change speech. There is a significant limit to what anyone—even a president—can accomplish within the confines of formal politics, especially when the political climate is unfavorable. That is why we so urgently need powerful, grassroots action that is capable of transforming the underlying political climate in a way that makes the sort of action we so desperately need possible. And as it happens, divestment is exactly that kind of action.

That said, we fully recognize divestment is just one tactic and thus is not indisputably the best one in any a priori sense. Rather, out of all possible tactics Haverford can pursue that have been suggested thus far (e.g., further greening the campus, shareholder activism, and more academic resources for studying climate change), we believe that divestment happens to be the most effective one. This is mainly due to the fact that unlike divestment, no other tactic suggested as of yet has the capability to meaningfully influence the larger politics of climate change and enable the policy action necessary for ensuring a livable future, especially on the urgent timescale in which we need such a shift to occur. Indeed, the International Energy Agency—which is not known for being either particularly environmentalist or radical—has publically stated that we need serious policy changes prior to 2017 in order to meet international targets for keeping climate change below extremely dangerous levels. Thus, in looking at what is and is not stymying the world’s ability to address climate change, we feel that in the truly “big picture” helping to accomplish that policy shift is our highest strategic priority.

Just to be absolutely clear: we also would be more than happy to consider any other way Haverford could leverage its institutional power to make a significant contribution towards bringing about the kind of change in climate politics and policy that ensuring a livable future requires. It’s simply that given divestment’s empirically proven effectiveness and the huge momentum behind the now global fossil fuel divestment movement, which as The Guardian recently reported “is growing faster than any previous divestment campaign” in history, we think it is a tough bar to beat. Yet we also agree with Dan Wiess that those “on both sides of the divestment question likely have far more in common than they have disagreement,” which is why we look forward to pursuing all the tactics Haverford can employ, divestment and otherwise, towards this end.