Letter to the Editor: Divest Nonetheless
It’s been three years since the Green Amherst Project first asked the board of the trustees to divest Amherst’s $2.1 billion endowment from the coal industry. In that time, the divestment movement has expanded to over 300 universities and numerous religious institutions, foundations and cities; the list of organizations already divested includes institutions both large and small, ranging from Stanford University and the Rockefeller Brothers Fund to the town of Amherst, Massachusetts. The divestment campaign at Amherst College has grown at a similar pace. In the past three years, GAP members have attended numerous meetings with board members, written dozens of opinion pieces for campus publications and staged multiple events. We’ve organized petitions and protests, walk-outs and teach-ins. Our campaign enjoys the Amherst community’s wide-spread and demonstrable support: 88 percent of students responded favorably to divestment in a 2013 poll conducted by the AAS, who subsequently passed a resolution supporting divestment in 2014. This past semester, 22 senior professors of the college sent a letter endorsing divestment to President Martin and the board. Today, three years from the campaign’s start, the Board has made their position clear: Amherst will not divest from coal. Amherst students must now ask themselves if this is an acceptable position for our college to take.
In its statement, released on February 24, the board asserted that Amherst’s investment policy would not “systematically exclud[e] individual companies, sectors, or industries” producing fossil fuels. Coal divestment, the statement implied, would do little to impact the coal industry and would implicate Amherst’s endowment in “purposes beyond financial stewardship.” In rejecting divestment from coal, however, the board did not disregard the mounting urgency behind climate change and proposed a series of initiatives that, according to Board Chair Cullen Murphy, “[would] make sustainability a key consideration in both the college’s daily operations and its investment process.” After all, the statement concluded, here at Amherst “we can all agree that establishing the college as a model for sustainable policies and operations is a worthy goal.” Amherst will have sustainability, the board decided — but a sustainability without divestment from coal or any other fossil fuel. But while the board ought to be commended for its promising commitment to sustainability, it is misleading to position divestment as contrary to the future Amherst imagines for itself. Amherst should divest from coal because divestment is perfectly consistent with the board of trustees’ sustainability plan.
Climate change’s effects are both upon us and imminent, making it a crisis that institutions like Amherst can no longer mediate and defer. Today’s extreme flooding, desertification and mass species extinctions are only expected to worsen with time, and at an escalated pace. In the next 35 years, rising sea levels threaten to displace more than 250 million people; within our lifetimes, the bodies of water encircling New York City are projected to rise nearly six feet. In that same period, one billion people are poised to lose their homes and livelihoods due to drought and desertification. These, at least, are the conservative predictions. Scientists estimate that the human species can only emit 525 more gigatons of carbon into the atmosphere if we hope to maintain global temperatures below 2 degrees Celsius, the point at which whole countries will begin to vanish from the earth. As it stands, there are enough fossil fuels stored in reserve to emit 2,795 gigatons’ worth of carbon. This is nearly five times as much carbon needed to escalate global temperatures past 2 degrees. These are fuels that the fossil fuel industry plans to burn. If we only add up the numbers, it becomes clear that the fossil fuel industry’s continued existence jeopardizes the fate of all life on this planet — including our own.
But if global warming is capped at 2 degrees Celsius within the next 35 years (and, scientists warn, it must), then the majority of these fuels cannot be burned, leaving them “stranded” from the economy and greatly minimized in value. A growing consensus of financial heads, including former SEC commissioner Bevis Longstreth and Bank of England governor Mark Carney, warn of a coming “carbon bubble” produced by the overvaluation of unusable fuel reserves. A recent Oxford University study confirms this finding and adds that the advancing movement against climate change accelerates this trend. This study found that divestment “poses the most far-reaching threat to fossil fuel companies and the vast energy value chain. In every case we reviewed, divestment campaigns were successful in lobbying for restrictive legislation.” Even if schools like Amherst choose not to divest in the short run, venture capitalist Gregory H. Kats notes that necessary reductions in global emissions will resonate on the market anyway: Should international carbon regulations keep pace with the global push against climate change, “fossil fuel company prices will drop substantially and […] institutions with these stocks in their portfolios will experience large losses.” If this is indeed the case, continued investment in fossil fuels quickens our advance toward environmental collapse, just as it furthers our economies toward failure. The more fossil fuels consumed, the more carbon put into the atmosphere, the more the planet warms and millions harmed, the less valuable fossil fuel investments will rapidly become. Amherst invests in fossil fuels against sound advice and at its own risk.
Nonetheless, the proposed changes to Amherst’s investment policy are promising, due to their potential to “make environmental considerations part of [their] investment practice.” As part of this process, the board’s investment committee plans to develop robust environmental criteria by which the managers that handle the majority of Amherst’s endowment are evaluated. The committee will also strive to “understand the extent to which endowment managers incorporate environmental factors […] into the investment process” and to “stay on the forefront of environmental best practices.” But is divestment not compatible with these policies? If the projections of scientists and economists hold, the endpoint of sustainable investment will and ought to be divestment. Amherst’s investments must gravitate away from fossil fuels in time if our endowment is to maintain its vitality — this much is clear. A graduated kind of divestment applied as an objective for Amherst’s entire endowment — and not just the college’s direct holdings — is clearly in line with the criterion the Board proposes, aside from its rejection of divestment as a tactic. To “stay on the forefront of environmental best practices,” as the Board desires, would seem to require some kind of divestment in time. Though the board, in its statement, hesitates to target singular industries by name, it must likely do so in any environmental criterion it applies to our endowment’s management if it is to take climate change to task.
But if Amherst must divest within the next decade, what prevents us from doing so today? Climate change is an immediate and urgent crisis. As we speak, as you read this article, Amherst’s money is funding the extraction of fuels that cannot leave the ground if we hope to guarantee ourselves some future level of global stability. Amherst’s continued endorsement of the fossil fuel industry implicates each member of our community in the current crisis and in the coming catastrophe. If we must divest, why not divest now, when it is needed most?
The board’s statement raises three concerns often levied against fossil fuel divestment. Some argue that divestment would only move a negligible amount of money and would therefore fail to alter corporate practices. Along similar lines, others contend that divestment’s symbolic influence would be minimal. Some even question whether university endowments should be mobilized in the first place to advance what they consider “political” points. The board’s proposal raises these questions as grounds for inaction on divestment. Each of these concerns is defunct. In the first case, the fossil fuel divestment movement has already demonstrated a significant symbolic pull on the activities of fund managers and fossil fuel corporations alike. The Rockefeller Brother Fund, inheritors to the Standard Oil fortune, declared that it would divest its holdings in fossil fuels just last year. Leading coal and electricity corporation NRG announced more recently that it would cut its emissions levels by 90 percent by 2050, referencing the student divestment movement as reason for the shift. This pattern of behavior substantiates divestment’s symbolic and economic claims to effectiveness. Even if divestment’s direct economic impact is limited, the stigmatization it places on the fossil fuel industry generates broad economic effects. As for the Board’s fear that divestment would politicize Amherst’s endowment, the board should recognize that if divestment is political, so too is investment. Indeed, every investment carries with it a political involvement in some way, and to pretend that this is not the case — that where we put our money ought to be freed from ethics, and that, in the first place, it can be — is itself a political move. To pretend that our endowment stands apart from politics is to value money over morality. But in fact, Amherst already recognizes the political force of its investment policy; that’s why we divested from South Africa in 1985 and from Sudan in 2006. To deny today the premises for what we did yesterday is absurd.
The final concern standing targets the Green Amherst Project’s specific demand for divestment from the coal industry. To date, Amherst does not own any direct holdings in coal, and it is uncertain what portion of the endowment outsourced to fund managers is also invested in coal. If this is the case, some ask, what would divestment achieve? Why should Amherst divest from an industry in which it is not directly invested? This supposed weakness of coal divestment in fact makes it Amherst’s most viable tactic to combat climate change. It is precisely because divesting from coal would have no impact on Amherst’s endowment that divestment is the most Amherst can do to promote sustainability as an institution. Our divestment from coal would likely inaugurate a ripple effect, positioning Amherst as a definitive national leader in the face of climate crisis, and at no cost to us. By simply stating that we’ve divested — even if only from all future investments in coal — Amherst would exert an enormous push on the national conversation on emissions and climate justice. Divestment would broadcast Amherst’s opposition to climate change to the institutions most able to curb carbon emissions, which include peer schools like Williams, Swarthmore and Harvard as well as powerful circles in finance, government and media. More than that, Amherst’s divestment from coal would only bolster the public condemnation of fossil fuels now affecting the fossil fuel industry’s bottom line. This reach across institutions and levels distinguishes divestment from other sustainability initiatives limited to Amherst’s physical campus. Divestment does what sustainability alone cannot: It can dismantle from within the industries directly responsible for climate change. If we can all agree that climate change is a worsening catastrophe, that Amherst “has a responsibility to match its convictions with behavior,” as the board says it does, that divestment works and that coal divestment will cost us nothing, the question remains: Why isn’t divestment included in the board’s proposal?
The window for substantive action on climate change is rapidly closing. As students at Amherst, we must hold our board of trustees accountable for the future we will come to inhabit. I join with the board of trustees in the belief that “Amherst has a responsibility to match its convictions with behavior,” and I insist that Amherst College divest — because it is the most sustainable option we have.