Global Divestment Day coincides with Valentine’s Day, so February has become a favorite month for climate change activists to demand that universities divest from fossil fuels. There was no shortage of such demands on campuses this year. Students — and in some cases, faculty — at Brandeis, Harvard, MIT, Penn, Loyola, the University of Pittsburgh, and a slew of other schools staged protests, passed resolutions, circulated petitions, and took to social media to pressure college administrators to stop investing in corporations that produce coal, oil, and natural gas. Most of the demands were politely brushed off. Harvard’s president, for example, promised to present the faculty’s call for divestment to the university’s top directors, saying he was “confident” it would receive “the thought and consideration it deserves.”
But some institutions gave in to the pressure. Georgetown University announced on February 6 that it will stop investing in fossil fuels within 10 years. Of course Georgetown’s trustees know that selling the university’s shares in publicly held companies like ExxonMobil or Chevron won’t have the slightest impact on the price of the companies’ stock. Nor will it affect their ability to raise funds or supply energy to customers around the world. And it won’t reduce the world’s supply of fossil fuels by a single barrel of oil or cubic foot of natural gas.
The point is worth underscoring. Student activists may sincerely imagine that getting their school to divest from fossil fuel stock is an effective way to weaken fossil-fuel companies. But capital markets don’t work that way. Every share of ExxonMobil stock sold by Georgetown is a share simultaneously purchased by some other investor — almost certainly an investor with no desire to demonize or punish fossil fuel companies. As an ExxonMobil investor, Georgetown may have some leverage over company policies. As an ex-investor, it has none.
In financial terms, as Oxford professor William MacAskill observed in a New Yorker essay a few years ago, disinvesting because of ethical scruples about an industry creates buying opportunities for investors who don’t share those scruples. “The market price stays the same; the company loses no money and notices no difference,” wrote MacAskill, whose research focuses on effective altruism. “As long as there are economic incentives to invest in a certain stock, there will be individuals and groups . . . willing to jump on the opportunity.”
That may not matter to teenage activists filled with righteous indignation, but the savviest climate activists certainly know it. Bill McKibben, a longtime environmental campaigner and foe of fossil fuel companies, has acknowledged that divestment crusades aren’t aimed at “affecting share prices” of oil, gas, and coal companies. The goal, rather, is to “revoke the social license of these firms” and turn them into “pariahs.” In The American Prospect, divestment advocate Jennifer Stock made a similar point: “At its essence, divestment is a symbolic, culturally punitive act,” she writes. And such “symbols are powerful,” since they help “shape the narratives we espouse as a culture.”
Maybe so. But if the divestment movement is merely a form of hostile symbolism — if it asks of its adherents only that they join in stigmatizing fossil-fuel companies — does it really amount to anything more than moral preening? It’s easy for college students to march and picket and chant “Divest Now!” What are they prepared to do that isn’t so easy? Stop buying gasoline for their cars? Give up hot showers? Renounce their electronic devices? If it weren’t for fossil fuels and the corporations that extract, refine, and sell them, there would be no air travel, no central heating or air conditioning, no Internet, no fresh produce in the middle of winter. Those things aren’t absolutely essential to life on earth; after all, human beings lived without them for millennia. But how many of those clamoring for divestment from fossil fuel stocks are willing to go beyond cost-free symbolism and actually divest themselves of the myriad benefits they reap every day from fossil fuels?
To be sure, there are sources of energy other than fossil fuels. But wind and solar power, the “greenest” renewables, account for only 8 percent of the electricity generated in the United States. Even if someday they account for all of it — which is likely only in the realm of science fiction — modern life would still be unthinkable without fossil fuels. Thousands of indispensable products, from plastic to asphalt to fertilizer, are derived from petroleum. No less than gasoline or jet fuel, they cannot be had without refining crude oil, and the carbon footprint that entails.
The benefits of fossil fuels have been incalculably vast. Thanks to coal, oil, and natural gas, billions of human beings live better, safer, healthier, cleaner, and richer lives than they otherwise would have. Certainly there is a case to be made that those gains have come at the cost of some negative environmental impacts. But those impacts will not be mitigated by getting colleges to sell off their shares in fossil fuel companies. If all you want to do is strike a self-righteous pose, a divestment campaign is the way to go. If you’re hoping to change the energy that makes the world go ‘round, divestment won’t accomplish a thing.
Jeff Jacoby can be reached at firstname.lastname@example.org. Follow him on Twitter @jeff_jacoby. To subscribe to Arguable, his weekly newsletter, go to bitly.com/Arguable.