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Letter to Davidson: Divestment Song
Hello. My name is Hayden Higgins. I graduated from Davidson College in 2012 and now live in Washington, D.C., where I work for the National Journal and volunteer with 350.org and DC Divest. My work with the latter recently led me to the chambers of the DC City Council, where a four-hour hearing on the Fossil Fuel Divestment Act of 2013 was being conducted. Because of my familiarity with the divestment process in D.C., and because I had some preliminary discussions about it while I was at Davidson, I feel I can shed some light on some misconceptions about divestment and explain why I feel the way I do about it. I do this humbly. I know there are others who understand parts of this much better than I. I know my insight is limited. But I owe it to the public record to explain how I’ve arrived where I am today.
Should my recent peers, the students of Davidson College, fail to pass the student referendum on fossil fuel divestment, the measure of my discontent will be great indeed.
There are three major arguments against divestment, which I will address separately. Forgive the less-than-eloquent headings.
Argument One: Divestment means decreased performance for the endowment.
Divestment from direct holdings in fossil fuel stocks will almost certainly have no material effect on Davidson College’s ability to operate at its full capacity. (I cannot speak as well to the effect of divesting from commingled funds, which are more complicated—but there is a lot of time for the conversation about how to divest from those without compromising any fiduciary duties.)
First, a backwards-looking study conducted by HBS professors Eccles, Ioannou, and Serafiem concluded that fossil-free portfolios actually outperformed those containing fossil fuels over the past fifteen years. Moreover, scholars have found stocks that historically track with fossil fuel companies; investing in those companies with that profile would mitigate the potential changes to the overall fund.
Second, it has been suggested that Davidson should invest in more fossil fuels. Au contraire, UBS analysts have suggested that fossil fuel stocks are subject to a “carbon bubble.” This bubble will burst when other analysts conclude that much of fossil fuel companies’ value lies in reserves that are not feasibly retrievable for technical, economic, and political reasons. Morals aside, exposure to further risk on this front is not advisable.
Finally, I should note that at least in DC, direct holdings in fossil fuel companies are only a small part of the fund’s total, and that even in the worst case scenario the loss would be well within the range of effects planned for and brought on by macroeconomic flux.
Argument Two: Divestment from fossil fuel companies will initiate a slippery-slope situation, and calls for more and more divestment will follow.
This is a poor argument. There are two fallacies.
First, we must remember that divestment cannot happen except through a democratic process. It necessarily reflects the popular will. More divestment will only happen if people want it to.
Second, understand that divestment is a tool that has been carefully chosen, chosen because it is suitable to the task at hand. Let me explain. Many people have suggested that it is more effective to change companies from within than from without—that, by owning shares, we can dictate the direction of a company to reflect our values. This can be a powerful tactic for effecting change, especially if you join your votes with others’ to create a bigger voting bloc in a move known as proxy voting (the numbers have to be pretty huge for this to work).
Unfortunately, shareholder activism is not the best tool for changing the harmful setup of our energy economy. That is because fossil fuel companies are basically locked-in, long-term, to a business model that is all about extracting and burning fossil fuels. Investment in a new plant, for example, takes decades to pay off. That means they can’t change their strategy for another forty or fifty years, even under pressure from shareholders. They are who they are. That means shareholder activism is out, and divestment becomes the most effective tool for signaling that the status quo will not work for us any longer.
Argument Three: Fossil fuel companies are actually good for the world.
Let me say it plainly: fossil fuels have overstayed their welcome.
It is true that oil, gas, and coal have provided the cheap and abundant energy that have powered the Industrial Revolution that lifted the living standards of billions and set the stage for the modern economy we live in today. Without these fuels a number of advances in living standards would not have been made. However, the time has come to use the surplus value generated by fossil fuels to lay the groundwork for an energy economy that will do what fossil fuels have done—heat our homes, fuel our cars, electrify our hospitals—but without the immense, immense drawbacks we have seen as a result of their overuse.
Anthropogenic climate change, as caused by greenhouse gas emissions, is something that the vast majority of scientists agree upon. The world’s best scientists have come together under the auspices of the IPCC and have repeatedly, with greater and greater insistence, urged politicians worldwide to do something to curb emissions drastically. Those pleas have fallen upon ears deafened by mounds of campaign contributions, hush money from those who would play dice with the planet and the people on it as their collateral.
That’s right—dice. We do not know what will happen. (That’s why it’s climate change or global weirding, not global warming.) Science operates by induction (ask a philosopher), and that means that we’re out on a limb when we project what the effects of climate change. It could be that nothing will really change. Or it could be the collapse of civilization, as suggested by Stanford scientist Paul Ehrlich. The WHO recently estimated that climate change presently causes about 150,000 deaths annually. (Other estimates are as high as 400,000.)
That is roughly the same number of people killed as a consequence of the atomic bomb dropped by the United States on Hiroshima in 1945. Climate change, at its present rate, is like dropping a nuclear bomb directly on the heads of 150,000 people, once a year, for the foreseeable future.
I ask you please: what kind of math would make you comfortable with continuing down this path? What do the odds have to be to make this Russian roulette palatable for you?
Christians believe every living thing is God’s loving creation. Buddhists believe we are all connected. Even for someone whose morals come from purely material grounds—like Peter Singer, the radical utilitarian—distance from harm does not decrease the damage done. It does not matter if the ones we could save live on a small island in the Pacific that we will never see. It does not matter if the ones we could save live seven generations hence.
It matters that we have the choice, now, to try to do something about it.
You may not be convinced yet that it is given to you to right every wrong in the world, much less this one. I appeal, ye students, to that deity of the liberal arts, Immanuel Kant, the substance of whose categorical imperative runs thusly: “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law.”
A choice is an action. There are some who would choose that we remain silent as climate change accelerates. They are, by the categorical imperative, voting for a world where everyone remains silent on climate change; they are, by the categorical imperative, responsible for the consequences of that silence. If Davidson is silent, it chooses a world where all are silent. If all are silent, our present course will continue unaltered. As the Stern Report put it, that course endangers the basic building blocks of human civilization.
I will only quote one more dead white man, this time Milton, in whose epic Paradise Lost an angel commands to Adam, then enjoying the fruits of creation for the first time: “Dream not of other worlds.” What I would like for you to take out of this is that there is no other world for us; there is no Planet B. We are not in a disaster movie that we can walk out of into the sunlight: we are on our only planet, and we would risk it if only to fatten the pocketbooks of a small echelon of shareholders.
(By the way—there seems to be a thought that “global warming” is a conspiracy. Where do they meet? Is Dr. Hauser involved? Ask yourself, cui bono? I’ll tell you where the conspirators work and what their names are. They are not the underpaid postdocs in your labs. They are the companies posting record profits for every year we postpone our transition.)
Speaking of pocketbooks—make no mistake: the move away from fossil fuels encompasses a broader shift away from inequality in our society. Apparently some are saying, “We won’t be able to educate the poor if we divest from fossil fuels.” The sanctimony is astounding. Why speak of educating the poor if behind your backs you are going to fund the 1% who pollute their lungs, colonize their lands, and destroy their lives? The arrogance is astounding, too. Why would you expect the people—from the Philippines to New Orleans to New Jersey—whose lives are threatened, why would you expect to retain their admiration? If Davidson is to be on the sideline, to allow evil to run untrammeled, it no longer merits the attention of the poor scholar at all. It ceases all claim moral leadership as an operating principle.
I have encountered powerful opponents who blithely maintain the facile opinion that because divestment is largely symbolic, it is also ineffective. The book of American history defies that equation. Our country’s revolutionary movement was catalyzed by the symbolic act of tossing British tea into the Boston harbor; what is divestment if not boycott continued? Would they argue that Tommie Smith’s raised fist at the 1968 Mexico City Olympics was ineffective because it was symbolic? Yes, like Tommie Smith’s epochal, gloved gesture, divestment is symbolic—symbolic of the larger will, of a change that is going to come.
Martin Luther King, Jr. told us that the moral arc of human history is long, but it bends towards justice. As he well knew, it does not bend on its own, something he dedicated his life to illustrating. It takes bravery to change the course of history, a course that as of now, if left unchecked, will cause untold human misery in the name of personal convenience, political expediency, and financial greed. Change is not easy but it is our moral prerogative.
The Wallace Fund in Washington, DC recently became the largest foundation to date to have committed to full divestment of its endowment from fossil fuels. Their Executive Director, Ellen Dorsey, recently reported that they have since outperformed their pre-divestment benchmarks. It is not too late for humanity to outperform its grim projections as well. As a child, I sang, “If I had a hammer.” Now I have that hammer. We hold a vote in this election—a referendum on nothing less than the planet and the people that live on it—and I would like for us to use it. I said, “If I had a song,” and now I sing. I have a humble voice in this congregation—a group of loving, respecting, courageous peers—and I am speaking out. I urge you to do the same.