Can Students Succeed In Pushing Colleges To Divest Oil And Gas Stocks?
by Sterling Wong, Minyanville staff writer
Like the way anger over apartheid in South Africa motivated students to successfully campaign to demand colleges and other institutions divest from companies doing businesses in the region, climate change activists are now hoping to do the same with respect to oil, gas, and coal companies.
According to a report from the New York Times, college students at more than 100 campuses nationwide are pressuring their university endowment funds to sell off holdings in fossil fuel companies such as Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), ConocoPhillips (NYSE: COP), BP (NYSE: BP), and Alpha Natural Resources (NYSE: ANR) in order to push the issue of climate change back into the national political limelight.
The movement was given a recent jolt by climate change grassroots organization 350.org, which is led by environmentalist and Middlebury College professor Bill McKibben.
Mr. McKibben has laid out a series of demands that would get the fuel companies off 350.org's blacklist. He wants them to stop exploring for new fossil fuels, given that they have already booked reserves about five times as large as scientists say society can afford to burn. He wants them to stop lobbying against emission policies in Washington. And he wants them to help devise a transition plan that will leave most of their reserves in the ground while encouraging lower-carbon energy sources.
A small liberal arts institution in Maine, Unity College, has already removed fossil fuel stocks from its portfolio, while Hampshire College in Massachusetts is set to do the same, according to the Times. Middlebury College, which has about 3.6% of its $900 million endowment invested in fossil fuel companies, will also launch a formal process into investigate the possibility of divestment.
In an October editorial for the Huffington Post, Jonathan Lash, president of Hampshire College, explained the institution’s decision.
Among other changes, our policy has led us to invest in developers of renewable energy technologies rather than the producers of fossil fuels. Our donors gave money to create our endowment as an investment in the future. Our business as an educational institution is to invest in the future. In a rapidly warming world, the future of our students will depend on quickly expanding the use of wind, solar power, and other carbon-free sources of energy, and deep reductions in the use of fossil fuels.
Will the divestment strategy be successful? Not really, says Merrill Matthews, a scholar for the right-wing Institute for Policy Innovation, which was founded by Congressman Dick Armey. Writing at Forbes, Matthews points out that oil and gas stocks are so widely held that plenty of institutions and individuals will pick up the slack even if some colleges sold off their holdings.
Matthews also notes that endowments invest in fossil fuel companies because their stocks offer high returns, which in turn supports student scholarships and grants and helps ease the pressure of ever-escalating tuition costs.
Also, Boston College economics professor Eyal Dvir told the Yale Daily News that holding large stakes in large companies like Shell (NYSE:RDS.A) and Exxon could actually make more sense for climate change activists because universities could then exert greater influence on the practices of such companies.
Abigail Carney, a student involved with divestment efforts at Yale, acknowledged that the push to get colleges to divest their oil, gas, and coal stock portfolio might not be totally successful, but “it’s more of a symbolic thing” to get the issue back onto Washington’s radar, according to the Yale Daily News.
The Times reports that 150 students from the colleges nationwide that are spearheading the divestment campaign will meet in Swarthmore in February to discuss the forms of action they might take – including perhaps hunger strikes, sit-ins, and building occupations – to compel their schools to drop fossil fuel companies.
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