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viewpoint

A call for complete divestment

| Friday, February 26, 2016

Climate change is a thing. An overwhelming 97 percent of climate scientists agree that the unprecedented, rapid change in the Earth’s climate is real and caused by humans. However, if the past 21 climate conferences have proven anything, recognizing the problem won’t solve it. Faced with the media’s portrayal of climate change as a daunting apocalypse waiting to happen, we, as citizens, are left feeling absolutely powerless. If climate change is such a massive issue, how are we supposed to do anything about it? Ride our bikes more?

This viewpoint is meant to be both a catalyst for discussion and a call to action; it is an opportunity for us, as members of a community that prides itself on ethical reflection, to genuinely question the way our decisions intersect with the changing reality of our planet. Through this column, I want to provide a suggestion that is both feasible and impactful for our Notre Dame community: complete divestment from fossil fuels and reinvestment in the energy transition.

The World Economic Forum, in their annual Global Risks Report, named climate change as one of the biggest threats to global economic stability. The report particularly highlighted climate change’s considerable impact on food security. As volatile rain patterns and rising temperatures take a toll on global crop cycles, the world’s vulnerable food supply will be unable to meet the growing demand of a rising global population. On top of this, one needs only to look at Hurricanes Katrina and Sandy to see the economic devastation of extreme weather events. As the climate continues to change, scientists predict that more is to come in our future if nothing is done. Another aspect is large-scale migration. There is no better justification to leave your homeland than when it is underwater or you have lost access to fundamental resources necessary to live.

Now an instinctual response to this could be, “what do the economic effects of climate change have to do with divesting from fossil fuels? All that matters is the economic stability of oil companies, the source of the investment returns.” While the current buzz surrounding unusually low oil prices, expected bankruptcies of a third of today’s oil companies and ExxonMobil’s near loss of its AAA rating all serve as potential responses, I have two potential responses that avoid the extremely volatile subject of oil prices.

First, a rather simple argument is that the 200 fossil fuel companies identified by 350.org, the center for the American divestment movement, are not isolated from the rest of the economy. If climate change, as it already has, continues to affect global economic stability, ExxonMobil cannot just avoid that. In fact, they may even become directly affected by the power of climate change, as Hurricane Katrina proved when a recorded eight million barrels of oil were spilled into the waterways of Louisiana and Alabama.

Second, fossil fuel companies today are able to play a pretty misleading trick on the investment community. The list of 200 companies use their massive amount of reserves as claimed capital. The problem with this is that, as a 2012 Carbon Tracker report points out, those reserves hold five times more carbon dioxide than the atmosphere can handle if runaway warming (2℃) is to be avoided. Essentially, if anyone comes to their senses and begins enforcing the emissions standards called for by COP21, all of those reserves will turn into stranded assets. The carbon bubble is set to burst, and we need to get out of it.

However, what I hope people take away from this movement is that our decisions cannot only be about “economics.” Today’s changing climate shows us the environment is not simply an external cost, but a concrete social reality that extends beyond economic calculations. Millions of people suffering from unprecedented climate patterns provide a wake-up call that short-term returns logic is ethically incoherent. We cannot continue to be associated with this suffering. The University of Notre Dame can no longer profit off the destruction of our planet.

We, Fossil Free ND, propose the University of Notre Dame undergo a complete divestment of any University investments as per the list of 200 fossil fuel companies and reinvestment of those funds in the following areas of energy transition: energy efficiency, renewable or low emission energy generation, sustainable storage and distribution of energy, sustainable agriculture and mass transportation.

Beyond the economic argument I introduced above, I want to touch on the exemplifying role divestment can have. Notre Dame is the largest Catholic university in America, and as Fr. Jenkins said in his letter explaining the China policy, “the mission of Notre Dame calls us to live up to high moral standards.” We are Notre Dame, and we need to recognize our duty as a model for moral decision-making. Divestment and reinvestment sends a message, a message that the world’s premier Catholic university will not tolerate any involvement with the injustices of climate change.

My name is Adam Wiechman. I am a freshman at Notre Dame, and in the fall of last year, I joined Fossil Free ND. We are not a club. We don’t have a president, a secretary, a treasurer or a concession stand during football season. We are a collection of students frustrated by the state of our world and our University’s role in contributing to it, and we want your help. The only way we are going to change anything is with people power, and we want the support of as many Notre Dame and Saint Mary’s students and faculty as we can get.

This coming Sunday, at 3 p.m., we will be hosting a call to action gathering in LaFortune, informing our community of who we are and what we are fighting for, and we want all of you to come. This call is not a pat-on-the-back rally for those that already agree with us, but an engagement with our Notre Dame community. Along with this, we strongly encourage those who are skeptical of the divestment movement to attend, to listen to what we have to say and to offer up any criticisms or questions you might have. This movement is not intended to reflect the perspectives of a handful of passionate environmentalists, but our entire community.

The views expressed in this column are those of the author and not necessarily those of The Observer.

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  • Adam, Nice editorial.

    Before asking for the divesture of anything, start here:

    Compel the University to release the contents of its portfolio. The one that’s created this $10 billion endowment. The one that’s often cited as “out-performing”, including during the “Great Recession”.

    Most assuredly there are holdings – that pay for scholarships and other “need-blind” admissions policies – that MANY would find abhorrent.

    Just ask for this accounting first – find out what’s the source of all this fluidity and liquidity. What you’ll probably discover is that in terms of what a Catholic institution should or should not invest in, fossil fuels probably won’t crack the top 5.

  • Unkle Rukus

    “Climate change is a thing.”

    And it happens every couple thousand years and there’s nothing you can do about it, dimwits.

    I hope you divest, lose money and the jungle bunnies are forced to go pick cotton.

  • John

    I think this is well intentioned, but also really misinformed. A few things-

    1. I’m totally 100% on board with the ethical argument here. “If it’s wrong to harm the planet, it’s wrong to profit from it”. Sure thing. That’s not going to appeal to everyone, but I still think its valid.

    2. Every time somebody from the divestment community starts trying to make an economic argument, you completely lose me. Everyday, there are hundreds of thousands if not millions of people in the investment community that study these oil and gas companies. These people are experts- they’ve spent their entire careers doing this, and by their investment activity, they are the ones who set the prices of the oil and gas stocks/bonds, and these folks fully understand the implications of climate change on these companies. So when somebody says “hey guys, these oil companies are actually a bad investment because reasons X Y & Z”, you’re basically saying “I know more about the economics of oil and gas than all of the world’s investors put together”. I’m betting you don’t know more than them, but hey, if I’m wrong, I recommend you stop writing editorials and start working on Wall Street.

    3. The proposed solution to these articles is always “take the money out of oil companies and invest it into green companies”. Ok, again, I understand the sentiment here, but do you understand the economics? When you buy stock of a company, that company doesn’t receive any funding. Conversely, divesting doesn’t taking any money out of an oil company’s coffers. Point being, buy up all the green stocks you want if you think that’s ethical, but know you’re not having an impact on these companies; divesting will hardly stop BP from drilling a new well.

    4. Putting restrictions on endowment investments will likely result in worse returns, and worse returns means ND has less money to give/spend. You risk some high school senior not being able to afford ND because the endowment had its hands tied. Given the previous points, hopefully you understand that divesting has no tangible impact. It might have a moral or ethical impact (which is completely valid. I’m not dismissing that), but the only tangible impact here is on the University’s budget, which very well might adversely affect the student body.

    Climate change is 100% real. I support your message, but there are better areas to fight this battle where you can achieve tangible victories.