In late June, President Obama gave a speech on climate change, which has received little media attention since. In his speech, the president suggested that citizens and communities consider investing in things that help the planet and divesting in things that don’t.
Our guest blogger, Dr. Alan Wright, takes on the question of divesting. Alan is the Founder and President of SosteNica, which invests in creative, smart, and sustainable development in Nicaragua.
To Divest or Not To Divest? That is the question!
“As of tonight we are taking on the fossil fuel industry directly. The moment has come that we have to take real stands. We are reaching real limits.” With those few sentences, author Bill McKibben declared war on the most powerful corporations in the history of the planet.
While his disagreement is with the fossil fuel Industry, McKibben’s challenge engages anyone who, in some way or other, participates in the ownership of these publicly held companies. So it behooves many of us to consider the pros and cons of McKibben’s argument.
Drawing from the sub-disciplines of philosophy, McKibben makes three fundamental arguments – one moral, one epistemological, and one logical. The moral argument can be summed up in a single sentence. “If it’s wrong to destroy the planet, then it is wrong to profit from that destruction.” Few would disagree that it is wrong to destroy the planet. Making a profit from said destruction seems hardly less objectionable. So the argument for divestment is not so much an argument between those who defend the planet and those who want to destroy. It is, rather, a challenge to institutions and individuals to decide whether or not it is morally acceptable for them to profit from this destruction.
Next comes McKibben’s epistemological argument. How can we be sure that the planet’s ability to sustain life as we know it is being destroyed? To make this case, McKibben turns to science and math, what he calls “the new math.” He claims that there are only three numbers required to make this case. The first has to do with the average ambient temperature on the surface of the earth. For the past 10,000 years, since the end of the last ice age, the earth has maintained a steady temperature range. That steady temperature has, according to scientists, been the result of an atmosphere made up of, among other things, greenhouse gases, which allow the warming rays of the sun to enter the earth’s atmosphere, trap some of the heat, while radiating the rest of that energy back out into the universe.
Life on the planet, and in particular, the historical period we call civilization of the past 10,000 years, has been made possible by a delicate balance of not-more-than 350 parts per million of carbon in the atmosphere. According to scientific research, elevated levels of carbon above 400 ppm have not been recorded for several million years. Increasing carbon levels above 350 ppm, the vast majority of climate scientists predict, will result in a warmer globe’s surface, a rise in sea levels, more acidic oceans, and more extreme weather events such as hurricanes, tornadoes, droughts, floods and wild fires.
Diplomats from around the world have agreed to a single target objective – to prevent warming of the planet by more than 2 degrees Celsius – the amount considered safe for human survival on the planet. Will humans disappear from the planet if the temperature goes above 2 degrees? Unlikely, but it depends on how much above 2 degrees the planet heats up. No one knows exactly how hot is too hot. Nor do they know what the consequences of gradual heating of the planet will be. What they do know is that agriculture, one of the primary inventions of the past 10,000 years, has been possible thanks to a relatively stable climate. Take away climate stability and you risk taking away agriculture as we know it. Without the ability to produce food in a reliable way, we lose the ability to maintain a population of 7 billion people on the planet.
The second number in McKibben’s epistemological argument is the number of gigatons of carbon that can be safely released into the atmosphere without exceeding that 2 degree Celsius target. Again, while the science is not perfect, because of hard to predict side effects, estimates put the number at around 565 gigatons. That means that if the fossil fuel industry continues to deliver its product to consumers at its current rate of 30 gigatons per year, with an estimated annual increase of 3%, we can expect to experience, barring any other variables, a total planetary warming of 2 degrees increase by the year 2027, just 14 years from now.
The third number in McKibben’s argument is that the fossil fuel industry is disregarding this science. Unless they change their behavior, their actions will continue to destroy life on the planet. In their annual reports and SEC filings, the fossil fuel industry has declared that they have the intention of extracting, and liberating into the atmosphere through their customers, 2,795 gigatons of carbon, roughly five times the amount of carbon scientists tell us would keep life on the planet safe. Intentionally planning to exceed the upper allowable limit considered consistent with organized human life on the planet counts, according to McKibben, as proof that these corporations, when taken together, are engaged in a process of willful planetary destruction. “These companies are a rogue force. They are outlaws.”
This brings us to the logical argument for divestment. If one of the fundamental roles of federal government is the protection of its citizenry from harm, then we would expect governments, when they are doing their job, to act in defense of their citizens. But the sad reality is that in the instance of regulating carbon emissions to prevent a catastrophic rise in temperatures that threaten, among other things, the production of food crops, our governments have failed to function. Even as the overwhelming scientific evidence shows that the fossil fuel industry’s business model of extraction and liberation of carbon is destroying the environment’s ability to sustain organized human life, governments provide them with tax incentives to continue the search for more planet damaging fossil fuels. Here is the logical argument: if government is unable or unwilling to perform its fundamental role as protector of the citizenry, then the citizenry must take up the role of self-defense.
In this case, self-defense amounts to challenging the ability as well as the right of private corporations to harm the public in the name of private profit for a few individuals. The rights of the many (to survive), in this case, override the rights of the few (to get richer). Divestment is being offered as one way to call attention to the dangers associated with climate change, the role that the fossil fuel industry plays in causing that change, and the power of the citizenry to take matters in their own hands in the event that government fails to perform its duty.
Will selling stocks from fossil fuel force the companies to cease and desist from their harmful behaviors? Not likely, but it can help engage the public in an open conversation about the future of our planet and the measures we are willing to take to protect that future. In any event, the arguments as laid out above, reveal that “business as usual” will lead to near certain catastrophe for the human community, that the time to do something about it is running out and that bold action is called for.
People and institutions who find themselves convinced by these arguments, and in a position to divest, may ask themselves two further questions: “If I divest my fossil fuel stocks, won’t I lose money?” and “What would I do with the money that would result from divesting?” These questions are for a subsequent blog. To learn more about the divestment campaign, visit 350.org.
A short answer on what to invest in would be Direct Community Investments, such as SosteNica. 100% of investment dollars to SosteNica go directly to green development in Nicaragua. Our track record is also 100%—interest and principle paid on time and in full.
Do good. Do well. Leave the planet a healthier, more just place than we found it.
“What is the use of a house if you haven’t got a tolerable planet to put it on?”
Henry David Thoreau