April 23, 2013

EDITORIAL: Oversimplifying Divestment

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On Monday, Mayor Svante Myrick ’09 declared that the City of Ithaca will not invest in the fossil fuel industry as long as he is mayor. A city press release lauded the Earth Day announcement as rendering Ithaca “the first east coast city and second city in the world to agree to divest its financial holdings in fossil fuels.” But is divestment — “to rid oneself of something that one no longer wants or requires” — accurate terminology here? Since the city has no existing investments in fossil fuels to begin with, we think perhaps it is not.

It is easy enough for the City of Ithaca to swear off investments in an industry upon which its government does not rely. While the city’s choice is symbolic, the University’s would not be. Cornell’s chief investment officer, A.J. Edwards, told The Sun last month that withdrawing from the traditional energy sector would have “a material impact on the return of the endowment and its contribution to the operating budget of the University.” We wonder whether Myrick — who has repeatedly called upon Cornell to increase its financial contributions to the city — would as easily make the decision to divest if Ithaca’s economic stability was dependent on fossil fuels.

We do not mean to diminish the positive nature of Myrick’s announcement. We acknowledge the admirability of the city’s willingness to engage Ithaca’s young and foster activism in the local community. Furthermore, the emphasis on investing in sustainable enterprise is an important takeaway. Cornell, and all universities that invest in traditional energy, should continue to explore viable alternatives to fossil fuels. When these environmentally-friendly investments become more competitive, Cornell should absolutely re-consider a policy of divestment.

In the meantime, the “hope that the city’s decision will influence divestment campaigns at Cornell University and Ithaca College,” as noted in the city’s statement, oversimplifies the complex reality of this issue. It cheapens Cornell’s fiduciary responsibility to maintain a robust endowment to fund academic programs, financial aid and other services for its students. If the University, like the City of Ithaca, had no existing investments in the fossil fuel industry, it too would surely “divest” without hesitation.