March 16, 2014

CASTLE | Re: Divestment and Its Moral Imperative

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In his recent column, Graduate Student Trustee Darrick Nighthawk Evensen was right to point out a need for better arguments regarding divestment from fossil fuels. To briefly summarize: no, it’s not enough to argue that by divesting, Cornell will start a trend among universities everywhere, or that we might shape national policy discourse. These are idealistic, but naive assumptions; these are possible outcomes, but not certain ones. In attempting to answer the call for better arguments, one commenter cited Bill McKibben’s now-famous Rolling Stone piece, which makes a compelling case for divestment. Another commenter, an economist and “sustainability professional,” mentioned the less-cited but also crucial fact that fossil fuels are not necessarily the stable investment we think they are, and that overvaluing their share prices could lead to a “carbon bubble” that threatens global financial markets. This is not an entirely new argument. In fact, it’s one that I made to the Student Assembly when I was working to pass Resolution 32 as part of the original move for divestment. This is the kind of empirical consideration that a trustee would presumably want to hear, but it’s tied to an ethical one.

A number of studies by experts like Sir Nicholas Stern, the international organization Climate Tracker, the Australian Climate Institute and most recently the British House of Commons’ Environmental Audit Committee, have warned that global stock markets are overvaluing companies with large holdings of coal, oil and gas in large part because access to burning those resources has been banned in an effort to stop further irreparable damage to the Earth. As I wrote with my coauthor of Resolution 32 and former co-president of KyotoNOW! Becca Macies ’14, “carbon emission mitigation policies are quickly making fuel reserves unburnable and thus worthless, but as the The Guardian pointed out, investors are ‘betting on countries failing to adhere to legally binding carbon emission targets.’” And this brings us to Nighthawk’s other point: The argument that this is a moral imperative has been watered down. Because the tangible results of divestment are uncertain, and Cornell’s individual impact is — as many have pointed out — likely just a drop in the bucket, I think it’s safe to say that the moral imperative is not simply about “saving” the climate, or even the communities that fossil fuel extraction ravages.

The “moral imperative” is not  about flexing our muscles to get fossil fuel companies to change their practices. It’s far more reflexive than that — it’s about us. The ethical argument isn’t just about our impact on the rest of the world — though I don’t think we should underestimate the importance of our contribution to larger forces at play — it’s about deciding not to bet on our collective failure to meet the internationally agreed-upon goal to reduce carbon emissions, which will undoubtedly have detrimental effects on the planet. It’s about deciding not to profit from an energy plan that disproportionately hurts the very poor to benefit the very rich. It’s about putting our money where our mouth is regarding our purported values of equality and sustainability, which has become a nothing word in the mouths of spineless liberals and those who are privileged enough to not yet have been touched by climate-related disaster. If we want to talk about sustainability, we must recognize that fossil fuels are finite resources that will run out. And it’s just as fiscally unsustainable as it is environmentally unsustainable to hinge our fate on the future of these resources. Even fossil fuel companies know that things are changing: They’re preparing for a future with a carbon tax. The energy market may continue to hedge risk but fossil fuels specifically are not the long term cash-cow conservatives want them to be. This is a reality we need to deal with, and in doing so we have the opportunity to be on the right side of history by choosing to get out of dirty energy, responsibly of course.

It is clear to everyone that the American consumption habits are unsustainable. There is no doubt that rising carbon levels will have serious and permanent consequences for the environment and almost certainly contribute to social and geopolitical conflicts, which will exacerbate existing issues such as displacement, food security and rising inequality.  However, there are still people that make the tired and complaisant argument that the fossil fuel industry isn’t the Big Bad Wolf it’s been made out to be and want to work with these companies in some imagined but unspecified transition process. In addition to misrepresenting some of the empirical evidence he cites in his recent op-ed, ironically titled, “Divestment: Cornell’s Brand of Ignorance,” David Bunk concludes by favoring remaining invested and pursuing the shareholder advocacy route. This is a doubly lazy argument: first because it doesn’t actually demand any risk on the part of the University and second because even the most basic research would reveal that Cornell does not engage in direct shareholder advocacy as a matter of policy, or at least it hasn’t in the recent past. In fact the only credit Cornell gets for shareholder advocacy from the premiere sustainability and social responsibility rating system, STARS, is for divestment from Sudan — proving that it is not unprecedented to manage our endowment for political purposes. Furthermore, we do not need to hold the hands of our transgressors under vague notions of “corporate responsibility” (ha!) and hope that they’ll listen and do the right thing. What we need is a regime change.

Anna-Lisa Castle is a senior in the College of Arts and Sciences. She may be reached at Biweekly Real Talk appears alternate Mondays this semester.

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