For decades, America, like the rest of the world, has relied heavily on oil and natural gas as the main energy sources. As many of you know, this has created many environmental issues, with the most prominent one being global warming (climate change, to be scientifically accurate). The over-exhaustion of these non-renewable resources has created loud uproar and political movements against its usage. For example, the Green Party of America, an electoral alternative to the two-party system, was created to improve the quality of our environment and everyday lives. They have been around since 1984, and have devoted their attention to establishing a national Green presence in politics and policy debate. If you have watched energy politics debates, you would see that the Green Party has not been able to dent the dominant two-party system.
A much stronger political campaign that has started recently is fossil fuel divestment; specifically, fossil fuel divestments for colleges and universities. Fossil fuel divestment is a student-driven political movement that aims to force universities to sell-off the parts of their endowment portfolios that are most tightly tied to coal, oil, and gas. The question is should colleges divest, and how much of an overall impact will this movement have?
In November of 2012, Unity College, based in Unity, Maine, became the first school to vote for fossil fuel divestment in coordination with 350.org. Since then, there are currently 210 active divestment campaigns across the nation, including colleges such as Stanford, Syracuse, and Dartmouth. However, opponents of this divestment movement say that it will have a negligible impact on oil companies, following the “too large to fail” logic. This is a valid point because if this movement was successful and every American university divested, University endowments hold less than 1 percent of the market capitalization of fossil fuel companies worldwide, so their divestment would only have a tiny impact on the companies.
Another argument is that schools with large endowments from these companies will lose their competitive edge if they were to lose the funding. An example of this scenario is Harvard University. Harvard is the most endowed school in the country with $30.7 billion dollars, and if they were to lose the funding received from oil companies, would they really be able to sustain a top international ranking?
Divestment from select fossil fuel producers would send a powerful message to the energy industry and the nation. Although the message may be strong, how much of a real impact will divestment have on the major companies?
Hendey, Eric. “Does Divestment Work?” The Institute of Politics at Harvard University. Harvard University, n.d. Web. 20 Feb. 2014. <http://www.iop.harvard.edu/does-divestment-work>.
Smith, Randall. “A New Divestment Focus on Campus: Fossil Fuels.” DealBook A New Divestment Focus on Campus Fossil Fuels Comments. New York Times, 5 Sept. 2013. Web. <http://dealbook.nytimes.com/2013/09/05/a-new-divestment-focus-fossil-fuels/?_php=true&_type=blogs&_r=0>.
This is actually the first time I’m hearing of university divestment, and while I’m all for anything that can help to dent our vast overuse of fossil fuels, I feel that the financial impact may indeed be too small. However, an important point that should be made is that universities are the future of America. That’s where the collective next generation of America is forming opinions and making their voices heard for the first time. If oil companies start to feel the university population pull support away from them, they may realize that a larger revolution is in the works, and it may indeed have the desired effect in the long run.
I have always been really interested in environmental studies, and I think that this concept of divestment can really make a difference. Even though it may not make a financial difference for large fossil fuel companies, many citizens will see the withdrawal of support for these companies on the news, and will follow the lead to join the green movement. Overall, any action that can help reduce fossil fuel emissions and create knowledge about the negative ramifications of global warming, fossil fuel emissions, and such, is beneficial for society.
I think divestment would not make a big difference to fossil fuel companies, but it would send a message that people are withdrawing their support for fossil fuels, which might encourage companies to pursue greener practices because that is what the younger generation of students want. In the case of divestment, the motivation behind an action might speak louder than the action does.