Fossil fuel divestment can be a crucial tactic in the fight for a safe climate future.
Divestment has made a big impact before, especially in the struggle to end apartheid in South Africa.
The fossil fuel divestment movement will help take away the social license of the fossil fuel industry, which will weaken their political power.
It will also start an important discussion in the market about the long-term viability of fossil fuels and the need to transition to a clean energy economy.
Finally, this campaign will help create a new generation of grassroots leaders who can help push our leaders to address the climate crisis.
Divestment isn’t primarily an economic strategy, but a moral and political one. At the same time, there are certain economic impacts. Our institutions have enormous amounts of money and getting it out of coal, oil and gas, will create uncertainty about the viability of the fossil fuel industry’s business model.
At the same time, divestment also starts to build momentum for moving money into clean energy solutions.
As Bill McKibben lays out in the seminal Rolling Stone article ‘Global Warming’s Terrifying New Math’, staying below 2 degrees warming (the internationally agreed upper limit) requires 80% of known fossil fuel reserves to stay in the ground.
The fossil fuel industry plans to burn five times more carbon than is safe, and twists the arm of government to keep it that way. Until we challenge the power of the fossil fuel industry, our planet, our future and our democracy don’t stand a chance.
As our public institutions take a moral stand and divest from fossil fuel companies, we remove both the financial means and social license these companies need to operate. When ‘Big Oil’ is the bad guy, they can no longer stand in the way of just climate solutions.
While the moral case for ending support to the fossil fuel industry is irrefutable, it’s increasingly clear that investing in an industry whose main asset (ie fossil fuel reserves) is going to be written off, could also be a bad idea financially.
In financial circles the risk posed to investors through the ‘carbon bubble’ popping, and assets becoming ‘stranded’ is gaining pace and building a strong case to divest on financial grounds.
From Darfur to tobacco, recent history shows us that divestment can win. Nowhere is this more powerful than the case of South African apartheid, where an international divestment effort played a major role in breaking the back of the Apartheid government and ending racial segregation. By the mid 80s a movement initiated by students saw 155 campuses, 26 state governments, 22 counties, and 90 cities divest from companies doing business in South Africa.
According to a recent report from Oxford University, fossil fuel divestment is now the fastest growing divestment movement the world has ever seen. The stigmatisation process it is triggering also poses ‘the most far-reaching threat to fossil fuel companies and the vast energy value chain’.