Soon college campuses will be bustling with activity for the new fall semester. We are sure to hear a call from students to sell endowment investments in the fossil fuel industry. Bill McKibben’s group 350.org believes it is immoral to own stock in companies that are contributing to global warming. Already, Stanford has eliminated its investments in the coal industry, and a small number of other universities have divested to varying degrees.
Given the size of the fossil fuel industry and our current dependence upon it, I suspect these divestment campaigns will have little effect. Moral imperatives are nice to think about, but they haven’t ever stopped prostitution. Nearly every student involved will have used some fossil fuel to arrive on his/her college campus this fall. Nearly everyone will have a cell phone plugged into the nearest electric outlet, largely powered by fossil fuels. Nearly everyone will have a pizza cooked in a gas-fired oven. The typical university would come to a screeching halt without the use of fossil fuels, whether or not its endowment portfolio contains any stocks in the industry.
Divestment campaigns get bogged down in the boundary conditions. Divesting from those who sell coal, oil and natural gas is fairly clear. But do we divest in those who provide the equipment to extract these resources from the Earth’s crust? How about pipelines and mine safety equipment? Are electric utilities on the list or are they, like you and me, exempt because they merely use fossil fuels but do not produce them?
Cheap fossil fuels have powered the modern economic machine. It is unfortunate that our society is so dependent on fossil fuels, but until the alternatives can prove themselves, fossil fuels will be with us. And that can be the basis for a more effective campaign on college campuses.
Let’s hear calls to those who manage college and university endowments, not to divest from the fossil fuel industry, but to invest in alternatives. Across the country, bright young entrepreneurs have ideas for alternatives to fossil fuels and to improve the efficiency of energy use. These companies deserve the encouragement of investments from endowment funds.
It’s best to focus on pure-plays—companies whose clean energy products are not diluted and hidden behind a huge raft of products and services that support the old way of doing business. Universities should take a special look at wind and solar power providers, and those who manufacture LED light bulbs, electric cars, and synthetic liquid fuels from plant biomass. In this era of cheap oil, some of these companies are having a rocky time getting started; support from investors would be welcome.
Let’s not get bogged down trying to define what to divest. Let’s move forth boldly to invest in the ideas that will carry the world to where we want to be.