College students unite to rally against institutional investment in fossil fuels
SWARTHMORE — Student activists at more than 200 colleges are trying a new tactic in hopes of slowing the pace of climate change: They are asking their schools to stop investing in fossil fuel companies.
The Fossil Free campaign argues that if it's wrong to pour pollution into the air and contribute to climate change, it's also wrong to profit from it. The strategy, modeled after anti-apartheid campaigns of the 1980s, aims to limit the flow of capital to fossil fuel companies by making their stocks morally and financially unattractive. In theory, that could lead to a slowdown in how much fossil fuel is burned and indirectly speed investments in renewable energy.
The students say it's hard for colleges and universities to ignore the arguments when scientists are teaching classes about the threats of climate change, and when the core mission of such institutions is to prepare young people for the future.
“We know this is something that's going to really matter in our lifetimes,” said Sophie Harrison, an 18-year-old freshman at Stanford University. “The world that we're going to be raising our kids in is going to be very different from the one we were born into.”
It is far from certain that the campaign will help change the behavior of fossil fuel companies or public attitudes about climate change.
And unlike apartheid, the target of previous divestment campaigns, there is no ready alternative to fossil fuels. The global economy is powered by coal, oil and natural gas. Affordable, low-carbon alternatives to these fuels aren't widely available.
Campaign organizers acknowledged their efforts may take years to have any effect, but they are frustrated, they said, that not enough has been done to address climate change.
The campaign targets companies that own most of the world's coal, oil and natural gas reserves. While many schools argue divestment would harm their endowments, an analysis conducted for The Associated Press casts doubt on that. The research firm S&P Capital IQ found that by one measure, endowments would have been better off had they divested 10 years ago.
The firm calculated the total returns of the broad U.S. market as tracked by the S&P 500 index, with and without the companies singled out by Fossil Free. An endowment of $1 billion that excluded fossil fuel companies would have grown to $2.26 billion over the past 10 years, but an endowment that included investments in fossil fuel companies would have grown to $2.14 billion. That extra $119 million could pay for 850 four-year scholarships, assuming tuition of $35,000 per year.
The stakes are even bigger for some schools. Fossil Free is targeting Stanford's $17 billion endowment, and last year 72 percent of Harvard University's student body voted for divesting its $30 billion endowment. Harvard officials responded by saying they have “a strong presumption against divestment.”
Financial giants such as HSBC, Citibank and the credit rating agency Standard & Poor's have raised concerns about the financial stability of fossil fuel companies — if the world decides to drastically reduce carbon emissions.
But that's a big “if,” and Wall Street analysts who cover oil company stocks are unconcerned. Fadel Gheit, an analyst at Oppenheimer & Co., says there is “no way” that a campaign like this could change a company's energy mix, let alone the entire world's.
Endowments don't have enough financial clout to affect the flow or cost of capital for fossil fuel companies, he said, and fossil fuels are too integral to the world economy.
“Let's see when these kids get a job, if they are going to walk to work or drive,” he said.
Industry groups and observers say going fossil-free would involve much more than just divestment.
“We all bear some of the blame for continued use of fossil fuels — it is not fair to put the blame solely on the oil companies,” Harvard professor Daniel Schrag, director of the school's Center for the Environment, wrote in an email to the AP.
Reid Porter, a spokesman for the American Petroleum Institute, argued that oil and natural gas fuel the economy “in the most efficient and reliable way possible.”
But Fossil Free is growing, and it's backed by some powerful interests.
Major foundations — including the Rockefeller Family Fund — have donated more than $8 million to 350.org, Fossil Free's parent group, and a network of influential advisers and volunteers are building a global network to support the campaign.
The campaign started in 2010 at Swarthmore College, a liberal arts school outside Philadelphia. It has spread to private and public schools across the nation, including Harvard and Stanford, as well as Yale, Cornell, Ohio State and the University of Colorado.