A Bad Climate for Divestment
Harvard should fight climate change by other means
In the fall semester of 2009, a group of Harvard students founded a college chapter of Students for a Just and Stable Future. The group has made it their mission to further the battle against climate change by seeking to construct a fossil free future. They have recently announced their desire that their respective universities should cease to invest in corporations involved in the extraction, production, or distribution of fossil fuels. We agree with the qualms raised by SJSF about the future of our environment and welcome their goals to increase investment in green technology. We hope that Harvard Management Company’s investments could be closer to the goals and ideals of SJSF but caution strongly against the logic and practical ramifications of divestment.
SJSF has a worthy goal, and we applaud the efforts of individuals at Harvard to take on climate change. We recognize that climate change is one of the most significant challenges facing this generation and it must be addressed in the near future. SJSF has pointed out on its website that world food prices have increased by 10 percent over the past year as a result of drought in the United States and that more of the Arctic ice sheet has melted this year than during any year previously; the situation is dire. The failure of the 2009 Copenhagen Climate Change Conference to produce any concrete solutions for our degenerating climate has shown us that we cannot just rely on politicians to lead the fight against climate change.
Nonetheless, calling for universities like Harvard to divest in companies involved in the extraction or processing fossil fuels goes too far. Harvard has divested only a few times in the past, and has done so predominantly in instances of human rights abuses being linked to their investments.
What is more, these companies are often multibillion-dollar corporations, to whom divestment by universities will have little impact on their current practices. Exxon Mobil and Royal Dutch Shell are the world’s largest companies by revenue, having earned $486 billion and $470 billion, respectively, in 2011. If the group’s intention is to use divestment embarrass these oil companies into ceasing to profit from fossil fuels, these efforts are all but guaranteed to be fruitless. These companies are more than capable of handling bad press; British Petroleum earned $5.3 billion in profits in 2011 despite its phenomenal catastrophe in the Gulf of Mexico. Several human rights groups sued Shell Oil in 1996 for human rights abuses that included allegations of collaborating in the execution of members of the Ogoni tribe in Nigeria. Shell has never accepted liability for these abuses despite paying a settlement in 2009, and continues to dominate the oil market as the second largest petroleum company in the world. Surely the divestment of funds by a few American universities will have little impact on the reputation of these so-called oil and gas “supermajors.”
It makes more sense for our university to use its expertise and resources in the field of climate science to work on tackling the core engineering problems behind our dependence on fossil fuels, which is the root of the problem.
We thank Students for a Just and Stable Future for taking on what seems to be veritable Gordian knot However, the use of divestments is unwarranted. There are many other tools SJSF can use to promote alternative energy sources and stop our reliance on fossil fuels.
UPDATE: The original version of this article incorrectly referred to the Students for a Just and Stable Future as Students for a Just and Sustainable Future. It also incorrectly said the group had been formed this year.