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Why Divestment Fails

Surging sea levels and drowning cities. Hurricanes and heat waves. Drought and destruction. As activists have warned us with ever-increasing urgency, we face this stark reality within a century if we fail to address the looming issue of climate change. In the worst-case scenario, life on Earth as we know it will be destroyed. All this may be true, and the scientific consensus is that it is in fact true. So we have a real problem.

But divestment is not a real answer.

In an unprecedented move, University President Drew G. Faust explicitly rejected divestment from fossil fuels in a recent public statement. However, she missed the fundamental issue at hand. Her concerns about the politicization of the endowment, shareholder influence, and investment returns are valid (though hotly contested). But as Faust acknowledges, climate change is a central issue of our time. Ultimately, we need a sustainable society with significantly lower carbon emissions. If Harvard’s divestment from fossil fuel companies brought us meaningfully closer to achieving that goal, then it would be worth seriously considering. The problem with divestment is that it does not.

Now, I freely admit that I was among the 72 percent of students who voted in favor of divestment last year on the UC referendum. In retrospect, though, I chose “Yes” pretty much just because the initiative vaguely seemed like something I’d support. I mean, who doesn’t want “to avert further environmental and human rights crises due to climate change?” The more I thought about it though, the more skeptical I became that divestment would actually advance this lofty stated goal. After all, it fails to address the core issue that drives carbon emission: consumer demand.

The divestment movement wants Harvard to sell its shares in companies such as Exxon Mobil. But this does nothing to reduce our impact on the environment. Even if we divested completely—even if we managed to make fossil fuel stocks seem socially distasteful—we would not reduce the amount of emissions in the world nor would we reduce the profits of Exxon or any other fossil fuel-using entity (except Harvard, as Faust argues).

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This is because emissions are fundamentally a consequence of our reliance on carbon-based fuels. We use them to heat our homes, run our cars, generate our electricity, and much more, and that consumption won’t change simply because the perception of fossil fuel stocks might change. At most, divestment may slightly reduce demand for Exxon’s stocks, but it does not reduce demand for Exxon’s actual products. And just as people who use oil don’t actively intend to pollute, Exxon doesn’t supply oil because it is an evil institution out to destroy the world—it does so because we all demand it. The real issue is not the fact that Exxon exists, as the divestment movement seems to imply, but rather that we all rely on fossil fuels to power our daily lives.

In essence, divestment is merely a symbolic statement, albeit one that costs Harvard money to make. More damningly, though, divestment lulls us into the false and dangerous impression that we have made a difference, that we have done our part to stop climate change by supporting the campaign. In reality, it only appeases fickle consciences while distracting us from the necessary but more demanding task at hand.

Certainly, sometimes it is valuable to take a symbolic stand even at a cost, especially on issues of fundamental morality like opposition to genocide or racial discrimination. However, while blaming fossil fuel companies for climate change is a convenient narrative, in reality this is not a black-and-white issue by any means. After all, if we divest from Exxon, why don’t we divest from all companies, since all companies use fuel? Why don’t we stop using vehicles, electricity, and heating oil, since in doing so we pollute? Such a view is obviously infeasible and reductionist. History has given us a society that runs on fossil fuels, a problem for which we are now collectively responsible.

Realistically, the only way to combat climate change is to comprehensively reduce carbon emissions, and the only way to do that is to fundamentally transform the society we live in, so that people no longer need or demand fossil fuels. The clearest routes I see to this end are sustained innovations in technology or policy that can steadily produce cleaner energy and widespread changes in social norms—innovations Harvard’s money and research are helping to achieve. This is where we should focus our attention.

Admittedly, Exxon may not be eager to see a shift away from fossil fuels. However, entrepreneurship and research move forward despite the status quo—even Exxon itself is investing hundreds of millions into alternative energy development, a recognition that the future of fossil fuels is limited. In the end, the biggest obstacle is not Exxon but the deep-seated societal dependence on fossil fuels and the subsequent reluctance to make the difficult transition away from them. But as fossil fuels become increasingly scarce, and thus expensive, and as environmental concerns become increasingly important (through the efforts of activists and growing general awareness), the impetus, both for political and technological change, will only grow stronger.

Ultimately, the same human ingenuity and drive that gave us a modern society that runs on fossil fuels can give us one that runs without. Divestment cannot.

Victor C. Wu ’16, a Crimson editorial writer, lives in Cabot House.

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