DIVESTMENT AND THE CLIMATE CRISIS
The UN “State of the Global Climate 2020” reports a disturbing year: record high temperatures, ocean heat waves, 3.3mm sea level rise, melting polar ice sheets, massive rains with extensive flooding, a record 30 Atlantic hurricanes, severe droughts and wildfires, and over 10 million climate refugees.
Prefacing the report, UN Secretary-General Guterres remarked: “Humanity is waging war on nature. This is suicidal…..Human activities are at the root of our descent toward chaos. But that means human action can help to solve it.” These actions include deployment of renewable energy and electric vehicles. Fossil fuel divestment is a less understood solution, detailed here.
What is divestment? Divestment is the elimination of investments in fossil fuels, whose operations are morally objectionable, because they add greenhouse gases to the atmosphere. Depending on the extent of stocks, mutual funds and bonds sold, divestment is classified as fossil free, full, partial, coal/tar sands, or coal only.
How large is the divestment movement? Globally, $14.48 trillion has been divested by 1306 institutions and more than 58,000 individuals, according to gofossilfree.org. For perspective, $14.48 trillion represent 4% of the total global wealth of $360 trillion.
Who is divesting? The most common groups divesting are faith-based organizations, educational institutions, and philanthropic funds. Examples include the Norwegian Sovereign Wealth Fund (world’s largest pension fund); World Council of Churches; Lutheran World Federation; multiple Baptist, Methodist and Evangelical churches; British Medical Association; New York City; and Yale, Stanford and Johns Hopkins Universities.
How does divestment work? Although divestment may not directly lower the stock prices of its targets, it serves to stigmatize the fossil fuel industry. The divestor understands climate science requires that 70% of known fossil fuel reserves remain in the ground to keep global temperature shift under 2-degree C. And she spurns an industry that is committed to extracting 100% of reserves and exploring for MORE—fully aware of the horrible impacts its grubbing for profit will have on our planet. Further, history reminds us of the effectiveness of divestment—against the tobacco and gambling industries, and especially against apartheid in South Africa.
Won’t divestment harm Texas? The fossil fuel industry admittedly improved the quality of life and created vast wealth during the 19th and 20th centuries. But in this 21st century, continued extraction and burning of fossil fuels contribute to the demise of our biosphere. Currently, in the U.S., Texas ranks 1st in wind energy production and 5th in solar energy production, and has vast potential for greater generation. Thus, as divestment hastens the retirement of fossil energy and the growth of renewables, the outcome is positive for the state.
Is divestment sound financially? My background is medicine and science, thus anyone contemplating divestment should consult a qualified financial planner. However, many investment firms are moving away from fossil energy, and Blackrock, the world’s largest asset manager, announced in January that it would “play a constructive role in the transition” to renewable energy.
Is divestment important? Although divestment alone will not resolve the climate crisis, mankind’s greatest challenge will require implementation of every available strategy—including divestment. And this tactic is favored by some of the world’s most respected leaders. In June, Pope Francis called on Catholics and non-Catholics, individuals and institutions, to divest, to “shun companies that are harmful to the environment, such as fossil fuels.” In Waco, MCC and Baylor have a special responsibility to divest: of what value is an excellent education, if a deteriorated climate does not allow one to pursue a career?Alan D. Northcutt, M.D.
December 8, 2020
Alan Northcutt is a Waco physician and Director of a grassroots climate action organization, the Waco Friends of the Climate.