Economics and climate awareness have always been heralded as enemies in the media, with “right-wing, power-hungry” economists battling with “left-wing, hippie” environmentalists. But what if there was a way for them to join forces to achieve a common goal?
On Oct. 4, the Senior Leaders Climate Action Group released a report outlining different pathways to achieve carbon neutrality by 2035, furthering its commitment to the Climate Action Plan released in 2009. Members of SLCAG presented the report before the Student Assembly yesterday, and will take questions from the entire community at a forum on Oct. 31. While I appreciate that Cornell has taken some important steps towards lowering its own carbon footprint to fight climate change, as a self-proclaimed global climate leader, Cornell must recognize that it must set the bar for climate action, not just meet it, to alert the global community that it is serious about leaving the path of “business-as-usual” in favor of a cleaner, brighter future.
Fossil fuel divestment, combined with our plan to reach carbon neutrality by 2035, would draw necessary worldwide attention to the research produced on our campus, a “living laboratory” for climate solutions and add an additional punch of legitimacy to the calls for a clean energy revolution. “Divestment” involves Cornell withdrawing its investments in the Carbon Underground 200, which consists of the top 100 coal and the top 100 oil and gas companies with the largest reserves of carbon (potential CO2e emitted). A commitment to divest is distinct from sustainability goals because it labels the fossil fuel industry as “morally reprehensible” and makes a clear statement that we do not support the companies that systematically obstruct efforts to combat climate change.
Fossil fuel companies have a long history of purposely not accounting for the extreme externalities that they produce, and failing to acknowledge the global extent of their actions. For example, ExxonMobil was aware of the serious effects of climate change back in 1977, a full eleven years before climate change was a well-established global issue. Instead of improving their technology to reduce carbon emissions or focus more on sustainability, they decided instead to subdue the information because they didn’t want to incur additional transaction fees.
One of the main arguments by Cornell’s administration against divestment from fossil fuels is that it would be too costly. However, given the opaque nature of universities’ investments offices, “empirical” studies and statements made by the committee frequently have no means of factual verification. A recent study conducted by Hendrik Bessembinder released on May 11 stated that large universities such as Cornell would have its endowment lowered “$120.75 million to $724.5 million over 20 years”. However, this figure assumes that Cornell is a typical large endowment university that falls into a conjured generalized model. In reality, our endowment investment percentage is drastically different. The report implies that we invest 6.12 percent of our endowment in the fossil fuel industry, while we actually invest less than 1 percent. Our investments in crude energy are very low, contradicting the notion that we could potentially lose hundreds of millions of dollars due to divestment.
In fact, Cornell has lost millions of dollars of our endowment directly because of our investment in declining industries such as oil and gas, not in spite of it. The S&P Oil & Gas Industry Index, which measures the performance of those crude energy companies, has fallen 15.8 percent over the past three years. Universities can’t profit off of investment in failing companies, and this is reflected in our 3.3 percent loss of return on our endowment, the lowest of the Ivies, according to a recent Bloomberg report. Therefore, we would actually be saving money from divestment rather than losing it. This would support both the University’s motive for profit and our transition towards a more sustainable environment while protecting basic human rights worldwide.
Furthermore, we would be the first Ivy League institution to fully divest from fossil fuels, and would join other divested institutions such as Washington DC’s $6.4 billion retirement fund, Berlin’s €750 million pension fund, as well as the city of Ithaca, as Mayor Svante Myrick announced divestment from fossil fuels in 2013. Cornell’s climate action plan has not gathered much press attention, but a public statement for fossil fuel divestment would definitely catch major headlines and spur global communication.
As carbon levels have now been the highest in human history, past the 400 ppm threshold that was previously considered to be “bad news” for the environment, we know that we must take drastic action. Divestment from fossil fuels is a tangible step that can severely impact fossil fuel companies and get both them and the world to notice a big problem.
Jack Kim is a junior in the College of Agriculture and Life Sciences. Comments may be sent to [email protected]. Guest Room appears periodically this semester.