Demands for endowments to dump shares in fossil-fuel companies are just plain reactionary.
Away from the heat and lack-of-light of the UK election campaign, there has been another campaign in full flow: to persuade those who control the investments of charitable foundations and academic institutions to sell off their shares in fossil-fuel companies. This week, the campaigners’ target was Harvard University, with noisy protesters complaining about the university’s refusal to ditch its shares. These divestment campaigns talk as if they could bring major corporations to their knees by starving them of funds. But really, this is about being seen to be green, a symbolic and narcissistic drive to denormalise fossil fuels, to the detriment of everyone.
With high-profile support from the Guardian, campaigners claim that we cannot afford to keep using fossil fuels. ‘Keep them in the ground’, as the Guardian’s campaign puts it. But the exact opposite is true: we cannot afford to keep fossil fuels in the ground. Our societies are utterly dependent on them to power every aspect of our lives. According to the International Energy Agency’s World Energy Outlook, even with a substantial investment in renewable energy over the next 20 years, the proportion of energy derived from fossil fuels globally will still be 76 per cent in 2035.
Moreover, the funds being targeted for divestment have comparatively small stakes in fossil fuels. Even if they dumped all their shares, it would be a drop in the ocean compare to the $4 trillion of capital in the energy industry – and with plenty of takers to buy the shares, especially if a sell-off cuts the price. The only people likely to be hurt by a mass sell-off are those who are supposed to benefit from these endowments.
The divestment campaigners are well aware of this. At best, they can hope to create social pressure on governments to regulate fossil fuels further, bumping up the price of energy with no cost-effective alternative yet available (renewables are still expensive and unreliable). In displaying their supposedly ethical credentials, these campaigners could make everyone worse off. What’s ethical about that?
CONTACT Rob Lyons
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13 & 14 October 2018, The Barbican, London
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