The divestment distraction

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Article Highlights

  • Divesting from energy stocks won't do the environment any good - @stanveuger

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  • 'Turning fossil fuel companies into evil strawmen is unproductive at best'

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  • Does divesting from energy companies do more good than using less energy?

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The other day, in our air-conditioned offices, we read, under electronic lights, an email that had been forwarded to us on our computers (which happen to run on electricity): "We are writing to ask for your signature on a faculty petition in support of Divest Harvard, a movement started by Harvard students asking the University to align its endowment with its commitment to solving the climate crisis."

Aligning its endowment with its commitment to solving the climate crisis? This sounds exciting, pray tell more! Will Harvard buy credits to offset its entire carbon footprint? Or litter the campus with twenty-five 100 meter tall wind turbines and cover every rooftop in solar photovoltaics to green up (a fraction) of its energy consumption? Or perhaps Harvard could simply boycott electricity until it is produced morally.

Nope, they suggested none of these excellent options. Instead, what Harvard Students for a Better Tomorrow, Tomorrow wants is for Harvard to divest from the 200 largest publicly traded fossil fuel companies. To its credit, the group doesn't even really pretend that this will have an economic impact. And for good reason: divestment may harm pension funds and widows a tiny bit in the short run, and it may help transfer some wealth to "immoral investors" once they buy up the very slightly undervalued fossil fuel company stock, but it won't, you know, have an impact on the fossil fuel firms being targeted, much like divestment from South Africa didn't have any real impact.

Why then does this movement exist at all? And how did it spread to hundreds of college campuses? (Ah, the beauty of electronics and social media.) Well, to raise "awareness," of course. Or, more specifically, to satisfy the organizers' desire to bask in moral superiority and gloat about heroically "fighting" "evil." Instead of having to stop using their iPads and Macbooks, they find symbolic gestures to mute their cognitive dissonance without having to change those very pleasurable behaviors.

What is wrong with that? Well, look around. People use energy. All the time. It's not as if the Exxon-Mobils of this world are producing oil to then burn it and stare at it just because they can and they're into that more than playing badminton. No, they do it because there are billions of us clamoring at the gates for more of that magical juice that makes our lives wonderful. As should be obvious to anyone who understands what a company does, the Chevrons and BPs of the world will be happy to sell us anything that we continually buy from them at profitable price levels.

Turning the fossil fuel companies into evil strawmen or even our "enemy" is utterly unproductive at best. The reality is that it is very expensive to decrease our environmental footprint significantly. The options we have are to 1. tax carbon to incorporate the pollution externality, 2. buy renewables at a rate outpacing increasing consumption and solve the incredibly difficult dispatchability problem, or 3. choose to consume less.

Blaming your drug dealer for your addiction may take some weight off your shoulders. But, put simply, the drug dealers exist to serve you, and if you want to kick the habit, you need to first admit you have an addiction and then begin the long, arduous journey towards sobriety, making sure never to fall off the wagon. It's so easy to fall off. But, it's all about the baby steps. Perhaps we could start by sending out fewer emails. Many of those on the email list of Harvard Students for a Fair and Fun Future would certainly be pleased.

Stan Veuger is an economist at the American Enterprise Institute. Jason Rugolo is Executive Director of Zero Mass Labs at Arizona State University.

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