A Brief Note on Divestment Tactics

In a previous post I expressed a few of my qualms with the divestment movement. Although I would consider myself a pragmatic environmentalist, I disagree with campaigns to move away from fossil fuels. Yet, I can’t help but think of how they could achieve the goal of a “greener” planet more effectively.

  1. Don’t target the Industry as a whole, this is unlikely to yield any beneficial long term momentum.  There is no complete replacement for fossil fuels yet.
  2. Since there is no alternative energy panacea for fossil fuels, it makes little sense to demonize an entire industry that is, at worst, a necessary evil.
  3. Some firms in this industry are more environmentally friendly than others (maybe their regulatory compliance is better).
  4. Some firms are more environmentally destructive.
  5. Targeting specific firms for greater accountability would be more effective than targeting an entire industry that civilization depends on.

Protests against non-union grape farmers or the Birmingham bus boycott were specifically targeted and had clear substitutes. With grapes it was easy to just not buy grapes or buy grapes from farms that didn’t need to be unionized. With the bus boycott people could walk or carpool, it wasn’t a protest that involved not using any transportation at all, ever (its also worth noting that the bus company wanted to desegregate soon after the protests started, it was only the law that held them back). With energy, there is no clear substitute for fossil fuels, with the exception of nuclear in non-transportation energy production. Total industry divestment means pushing towards an energy system that can’t feasibly be meet our needs. All things considered, why not push for a cleaner environment instead of taking a total stand against the fossil fuel industry that reliably powers our hospitals, refrigerates our food and vaccines, and enable humans to travel the world.

Divestment is terrible

Northeastern, Harvard, and UMass Amherst all have divestment movements. These are largely symbolic campaigns against University endowments investing in the fossil fuel industry. They claim to represent the global poor and the impact of climate change on their communities. Their ideology doesn’t reflect todays economic reality, and does more harm than good.

Many in divestment campaigns want to harm the fossil fuel companies in some way. This is a fledgling movement and they will need to get to the size of the colossal divestment protests of South African companies. Yet, even the massive anti-Apartheid divestment campaign had no impact. Shares were pretty much bought up in seconds when an institution divested. They don’t harm the financials of the fossil fuel companies.

An argument that attempts to make up for the fact that it will hurt colleges’ financial portfolios is that fossil fuels are only a short term investment. This argument is terrible from the beginning. First of all, fossil fuels wont run out for hundreds of years, and we’re constantly finding more and more. People then point to the example of a college in Maine that divested from fossil fuels and then made up for the gap with increased donations. Does a temporary increase in donations seem like a long term solution compared to the hundreds of years it will take the earth to run out of fossil fuels? Additionally, decreased revenues from investments in fossil fuels will raise tuition and cause more students to take on more debt. A symbolic gesture shouldn’t cause other people to suffer.

Next up: the fact that they claim to represent the global poor. I doubt many of them have met the real global poor, those that Paul Collier calls “The Bottom Billion”. These are people who are living on less than 1.25$ a day, a poverty line defined by the United Nations (although Lant Pritchett contests that low number). These past two decades are likely the best that humanity has seen. Climate deaths are down 99% over the past 100 years. Note, that the population in 1900 was 1.6 billion and today it is over 7 billion. Storms may be growing in intensity, but industrial civilization is clearly becoming more “climate resistant”. People need electricity to preserve vaccines and other medications, to use modern farming equipment, and for running industrial activity to escape poverty and starvation. Moreover, everyone knows that more energy allows civilization to do wonderful things.

TOTAL_DEATHS_caused_by_reported_Natural_disasters_between-1900_and-2015

Symbolic gestures may have their place, but don’t make other students pay for your symbolic gesture. Now if divestment campaigners were willing to take on any debt that other students might take on, I wouldn’t be complaining. All in all, divestment campaigns don’t harm fossil fuel companies, they have no panacea alternative to hydrocarbons at the moment, and this will not help the global poor. These campaigns do not take into account other student’s financial situation, and I doubt the global poor are watching this movement with bated breath and tears of joy in their eyes. Best case scenario, many students waste tons of collective hours for no reason.