The movement to persuade institutional investors to “divest” their portfolios of stocks of corporations primarily engaged in producing or combusting fossil fuels is picking up steam. The World Council of Churches, representing nearly 600 million churchgoers in more than 150 countries, voted to divest its own holdings and to encourage all of its member churches to do the same.
What started on college campuses has spread to more than 100 cities, counties, religious institutions, foundations and other citizen-based organizations. The targets for divestment are 200 publicly traded companies that control most of the known coal, oil and gas reserves.
Why focus on “reserves?” Scientists recently calculated our planetary “carbon budget.” First, they determined that if humans increase global temperature by just 2 degrees centigrade (3.6 degrees Fahrenheit) we could expect to cross one or more “tipping points” and find ourselves in a world of hurt.
Next, they calculated the number of gigatons of carbon dioxide it would take to reach this threshold and how much of this amount has already been emitted into the atmosphere. Doing the math, they came up with the number of gigatons we could spew into the atmosphere in future years and stay below the target global temperature increase. Basically, we can add another 585 gigatons.
The problem is that “known reserves” of coal, oil and gas contain five times that amount.
So, the divestment movement is asking the companies that hold these reserves to: 1) Stop exploring for more; 2) Stop lobbying for tax breaks for fossil fuels and against development of renewables; and 3) Commit to keeping 80 percent of their reserves in the ground, never to be burned.
This is a big ask. For No. 3 it’s a huge ask: “Excuse us, fossil fuel companies, but we’d like you to write off about $20 trillion in assets in order to save the planet.”
And, this doesn’t count the infrastructure that supports our dependence on fossil fuels, such as gas- and coal-fired power plants, gas stations, pipelines and refineries.
It has been said that one reason the Exxon Valdez crashed and spilled tens of millions of gallons of crude oil in 1989 was that even when the people piloting the ship became aware that things were amiss, it was too late to prevent the disaster. If I recollect correctly, the ship was so large, more than three football fields in length, that just to stop the ship’s forward motion and begin turning it required more than a mile.
Turning the world off the fossil fuel path will require much more than just stopping or turning that one ship, and the enormity of the “ask” is some measure of the almost unimaginable effort required and the political and economic friction that will ensue. Bottom line, the transition from fossil fuels to a sustainable energy economy will not be without pain and it is difficult to imagine that the fossil fuel industry will quietly agree to go along.
So, what forces can turn the USS Fossil Fuel and keep it from spilling its guts on a reef? The divestment movement calculates that the top 500 university endowments collectively invest close to a half a trillion dollars, and if you add in pension funds and investments by foundations and religious institutions, pretty soon you’re talking about real money.
The website www.gofossilfree.org/commitments lists some of the participating organizations, including, of local interest: Stanford and SF State, not to mention the cities of San Francisco, Berkeley, Richmond and Oakland, as well as numerous religious organizations.
Divestment is a potentially powerful tool in terms of influencing corporate change. Another is making people (corporations, in case you had not heard, are people) pay to dump carbon dioxide into the atmosphere. I’ve mentioned in a couple of prior columns the idea from the Citizens Climate Lobby of charging emitters a gradually increasing fee and, rather than keeping the money, government would return the funds to U.S. residents. This idea keeps popping up in the most interesting places.
What is that old saying? “Imitation is the most sincere form of flattery.” So now a recent article in Bloomberg Businessweek cites a proposal from the Brookings Institute to charge $16 a ton for CO2 emissions and increase it 4 percent per year above inflation. This, they calculate, would raise the price of gas about 16 cents, and increase household energy costs by anywhere from 5 to 20 percent.
The proposal estimates the tax would raise $3 trillion over 20 years and dramatically reduce greenhouse gas emissions. The article further indicates that this would permit the government to send a check for $300 ($1,200 for a family of four) to every resident in the country in year one, with the amount increasing over time. Or, to assuage any tax phobias, the offer could be made to reduce other taxes on a dollar-for-dollar basis.
Sound crazy? Well it appears to be working in British Columbia. After six years of implementation, the carbon tax has cut carbon emissions, produced jobs and grown the economy, and B.C. now has the lowest income tax rate in Canada and one of the lowest corporate tax rates in North America.
— John Mott-Smith is a resident of Davis; his column publishes on the and third Thursdays of each month. Send comments to [email protected]