By Duke Cheston
The growing fossil-fuel divestment movement on campus is the "first effective opposition" to the fossil fuel industry, according to writer and activist Bill McKibben. Across the country, students alarmed about climate change are urging their colleges to disinvest their endowment funds ("divest") from petroleum-extracting companies. They have been garnering headlines in recent months, and, according to The Nation, the campaign is "engaging more students than any similar campaign in the past 20 years."
However, the idea that activists represent "effective opposition" is questionable.
The Movement Spreads
The divestment campaign began a couple years ago with student groups at a handful of schools, such as Swarthmore College. Last November, the movement took off nationally when McKibben and his group 350.org went on a 21-city promotional tour called "Do the Math." McKibben's frequent refrain is "If it's wrong to wreck the climate, then it's wrong to profit from that wreckage." (As far as I know, McKibben does not explain how he would have engaged in his promotional tour without fossil fuels).
Since the tour, 350.org has been coordinating the divestment campaign. Students on more than 300 campuses, either individuals or groups, have urged their administrations to divest. (A few cities and church denominations have signed up for the campaign too.) According to 350.org spokesman Jamie Henn, activist students have met with boards of trustees on 40 campuses in the last few months.
So far, despite the popularity, only a few colleges with tiny endowments have complied with demands for divestment. These include Unity College, Hampshire College, Sterling College, the Santa Fe Art Institute, the College of the Atlantic, and Green Mountain College. No college with an endowment of over $1 billion has divested.
That may change with Swarthmore, which could be the first divesting institution with a big-league endowment--$1.5 billion. Students have been agitating at Swarthmore for a couple years, and they are still upping the ante: activists stormed an administrative meeting at the school in early May, preventing school leaders from discussing the potential costs of divestment. Columnist Thomas Sowell wishes administrators had not caved so easily, taking the occasion to criticize them for their limp backbones.
Does Divestment Even Work?
The divestment campaign is based on a similar campaign in the 1980's aimed at ridding South Africa of apartheid. According to one estimate, 155 institutions had divested from South Africa by 1988, after several years of activism. Nelson Mandela, the long-time political prisoner who became president of South Africa, said on the record that the divestment movement contributed to the end of apartheid in his country.
However, available scholarship indicates that even the South Africa campaign wasn't very effective economically, and had almost no impact on the country's economy. "Corporate involvement with South Africa was so small," wrote the authors of a 1999 paper, "that the announcement of legislative/shareholder pressure or voluntary corporate divestment from South Africa had little discernible effect either on the valuation of banks and corporations with South African operations or on the South African financial markets."
Student activists have since tried to get colleges to divest from tobacco companies, from companies that profit from the Darfur region of Sudan, and even from the nation of Israel. However, none of the copycat campaigns appear to have been as successful as the one focused on South Africa.
McKibben and company recognize that they can't have an economic impact.
Since about $3 trillion worth of crude oil is produced each year (much of it by governments), divestment isn't likely to have much effect, especially since a far more morally persuasive campaign didn't dent South Africa's economy, which is only $400 billion.
But they still believe they can have an impact socially and politically.
"We know that we can't bankrupt ExxonMobil," said spokesman Henn in an email exchange with the Pope Center, "but we can show that they are morally bankrupt. Our goal is to turn Big Oil into Big Tobacco, a pariah industry that loses its political stranglehold over our government."
Success is Unlikely
So they've set their sights lower, but the divestment movement will likely face difficulty meeting even the relatively low bar of making oil companies political lepers.
For one thing, oil companies are already unpopular, and it doesn't seem to have had much effect. According to Gallup's latest survey, the industry has a 61 percent disapproval rating, the worst of all industries listed in the survey--even worse than lawyers and the federal government. If their political influence hasn't diminished by now, what more could do it?
Resistance comes from money-hungry college administrations too. Students at both UNC-Chapel Hill and Harvard have voted overwhelmingly to divest from fossil fuels. Seventy-seven percent and 72 percent of students voted for divestment at each school, respectively, but neither has divested. In fact, in a wonderfully condescending email, a Harvard spokesman told the New York Times that, "We always appreciate hearing from students about their viewpoints, but Harvard is not considering divesting from companies related to fossil fuels."
Harvard later made a perfunctory symbolic nod to the protestors, hiring a "vice president for sustainable investing" for its investment management team. But the school has still not committed to divesting.
Even though Swarthmore's leadership is politically sympathetic to the divestors--Swarthmore puts the "liberal" in liberal arts colleges, you might say--the administration is holding firm, arguing that divestment would be just too expensive and, therefore, disrespectful to donors who had no intention of activism. A study they commissioned concluded that the school would forfeit $204 million over 10 years by changing its investment strategy. Inside Higher Ed calculated that this would cost students $13,000 each per year, on average (although there were some questions about the accuracy of the study).
Finally, the politics of fossil fuel divestment are different than the politics of apartheid or tobacco. Even if the science were as settled as activists claim, the moral equation is less clear compared to other divestment issues. Whereas pretty much everyone agreed that a small group of anti-democratic, murderous racists in a far off country were in the wrong, not everyone is ready to take a financially painful stand against driving their own car to work.
Similarly, the consequences aren't as bad. The idea of something killing grandma or yourself (as in the case of cigarettes) has more emotional weight than the idea of something killing polar bears (as in the case of oil and gas, although I hear the polar bears are doing quite well lately in spite of increased carbon).
Duke Cheston is a reporter and writer for the Pope Center.
(Photo: Students at the Swarthmore divestment conference. Credit: Yale Daily News.)