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Why Institutional Divestment Might Be One of Our Best Tools For Fighting Climate Change

Educational institutions have a large and powerful stake in the dirty energy business.

| Fri Nov. 22, 2013 3:02 PM PST

This story first appeared on the TomDispatch website.

Apocalyptic climate change is upon us. For shorthand, let's call it a slow-motion apocalypse to distinguish it from an intergalactic attack out of the blue or a suddenly surging Genesis-style flood.

Slow-motion, however, is not no-motion. In fits and starts, speeding up and slowing down, turning risks into clumps of extreme fact, one catastrophe after another—even if there can be no 100% certitude about the origin of each one—the planetary future careens toward the unlivable. That future is, it seems, arriving ahead of schedule, though erratically enough that most people—in the lucky, prosperous countries at any rate—can still imagine the planet conducting something close to business as usual.

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To those who pay attention, of course, the recent bursts of extreme weather are not "remote "or "abstract," nor matters to be deferred until later in the century while we worry about more immediate problems. The coming dystopian landscape is all too real and it is already right here for many millions. (Think: the Philippines, the Maldives Islands, drowned New Orleans, the New York City subways, Far Rockaway, the Jersey Shore, the parched Southwest, the parched and then flooded Midwest and other food belts, the Western forests that these days are regularly engulfed in "record" flames, and so on.) A child born in the United States this year stands a reasonable chance of living into the next century when everything, from available arable land and food resources to life on our disappearing seacoasts, will have changed, changed utterly.

A movement to forestall such menaces must convince many more millions outside Bangladesh or the Pacific islands that what's "out there" is not remote in time or geographically far away, but remarkably close at hand, already lapping at many shores—and then to mobilize those millions to leverage our strengths and exploit the weaknesses of the institutions arrayed against us that benefit from destruction and have a stake in our weakness.

There is a poetic fitness to human history at this juncture. Eons ago, various forms of life became defunct. A civilization then evolved to extract the remains of that defunct life from the earth and turn it into energy. As a result, it's now we who are challenged to avoid making our own style of existence defunct.

Is it not uncanny that we have come face-to-face with the consequences of a way of life based on burning up the remnants of previous broken-down orders of life? It's a misnomer to call those remains—coal, oil, and gas—"fossil fuels." They are not actually made up of fossils at all. Still, there's an eerie justice in the inaccuracy, since here we are, converting the residue of earlier breakdowns into another possible breakdown. The question is: will we become the next fossils?

Subsidizing Big Energy

The institutions of our ruling world have a powerful stake in the mad momentum of climate change—the energy system that's producing it and the political stasis that sustains and guarantees it—so powerful as to seem unbreakable. Don't count on them to avert the coming crisis. They can't. In some sense, they are the crisis.

Corporations and governments promote the burning of fossil fuels, which means the dumping of its waste product, carbon dioxide, into the atmosphere where, in record amounts, it heats the planet. This is not an oversight; it is a business model.

Governments collude with global warming, in part by bankrolling the giant fossil fuel companies (FFCs). As a recent report written by Shelagh Whitley for the Overseas Development Institute puts it,

"Producers of oil, gas, and coal received more than $500 billion in government subsidies around the world in 2011... If their aim is to avoid dangerous climate change, governments are shooting themselves in both feet. They are subsidizing the very activities that are pushing the world towards dangerous climate change, and creating barriers to investment in low-carbon development and subsidy incentives that encourage investment in carbon-intensive energy."

Of course a half-trillion dollars in subsidies doesn't just happen. It cannot be said too often: the FFCs thrive by conniving with governments. They finance politicians to do their bidding. Seven of the ten largest companies in the world are FFCs, as are four of the ten most profitable (just outnumbering three Chinese banks, which presumably have their own major FFC connections). These behemoths have phenomenal clout when they lobby for fossil-fuel-friendly development and against remedial policies like a carbon tax. And if this were not enough, they flood the world with fraudulent claims that climate change is not happening, or is not dangerous, or that its dimensions and human causes are controversial among scientists whose profession it is to study the climate.

The Cascade

Fossilized corporations do their thing while frozen governments produce (or opt out of) hapless and toothless international agreements. By default, initiative must arise elsewhere—in places where reason and passion have some purchase as well as a tradition, places where new power may be created and deployed. This counter power is, in fact, developing.

Given the might and recalcitrance of the usual culpable and complicit institutions, it falls to people's initiatives and to other kinds of institutions to take up the slack. This means universities, churches, and other investment pools, now increasingly under pressure from mushrooming campaigns to divest funds from FFCs; and popular movements against coal, oil, fracking, and other dangerous projects—in particular, at the moment, movements in the US, Canada, and elsewhere to stop tar sands pipelines.

Those in the growing divestment movement suffer no illusions that universities themselves wield the magnitude of power you find in investment banks or, of course, the FFCs themselves. They are simply seeking leverage where they can. The sums of capital held by universities, in particular, are small on the scale of things. Harvard, the educational institution with the largest endowment (some $32.7 billion at last count), reports that only 3% of its direct holdings are in the top 200 energy outfits. (The amount of its money held indirectly and opaquely, through private capital pools, and so also possibly invested in FFCs, is unclear.) Though millions of dollars are at stake, that's a drop in the bucket for Harvard, whose holdings amount, in turn, to nowhere near a drop in the total market capitalization of those energy giants.

Set against a landscape in which people have lost faith in the principle sectors of power, however, universities still have a certain legitimacy that grants them the potential for leverage. Divestment will make news precisely because such movements are unusual: universities biting the hands of the dogs that feed them, so to speak.

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