In the Boston Review, David G. Victor writes skeptically about student-led campaigns to get universities to divest from fossil fuel, suggesting that universities hold a small fraction of all fossil fuels shares and thus have a negligible influence. An excerpt:
Divestment sounds like a clean and powerful response: starve big carbon of capital. In reality, though, it is a symbolic sideshow because capital is fungible. The total value of all American university endowments is about $430 billion, a tiny fraction of the roughly $200 trillion in global assets. When universities exit, many other investors stand at the ready to buy their shares.
Divestment enthusiasts like to claim, nonetheless, that symbolic acts matter—they mobilize and focus pressure. The South African case offers some evidence that symbolic campus action worked. But one data point doesn’t prove a theory. In many other instances—from tobacco companies to firms doing business in Israel and Sudan—pressure for divestment, along with some actual divestment, has come and gone with no practical impact.
What was effective in South Africa rarely works in other contexts. Divestment may have played a role in ending apartheid, but as part of a larger historical dynamic that doesn’t apply to other cases. The collapse of the Soviet Union also made South Africa less indispensable to the West. If divestment helped, it did so in concert with government-instituted travel bans and widespread social pressure against easily identified firms.
In contrast, identifying carbon targets is much harder because fossil fuels pervade the global economy and because the “bad guys” themselves are often the best hope for mitigating the emissions that cause climate warming. For example, it is fashionable to go after big oil, but all of the major Western oil companies also have vast holdings in natural gas—the cleanest of the fossil fuels. Indeed, the largest single reduction in emissions worldwide to date is rooted in the shift from coal to gas in the U.S. electric power fleet. When it comes to cutting carbon in business, the villains and the heroes get all mixed up.
Image of fossil fuel refinery via Boston Review.