Fuel for thought: divesting from fossil fuels
The earth’s fossil fuel reserves are not going to run out any time soon. As technology develops, our capacity to discover and extract such reserves are only going to increase. Humanity will not stop burning fossil fuels because they have run out, as hypothesised in theories such as “peak oil”. To quote Dieter Helm “there is enough oil, coal and gas to fry the planet many times over…there is no imminent resource crunch around the corner”. Fossil fuel reserves must, therefore, be left unused by choice. This is a decision that must be made and implemented at all levels – by governments, by organisations and by individuals.
What is divestment?
Divestment is the action of organisations divesting certain stocks and shares to further a political or social cause – in this case to keep fossil fuels in the ground, with the aim of reducing climate change. By divesting stocks and shares of fossil fuels, a dual impact is achieved: removing investment makes it harder for fossil fuel companies to operate in financial markets, and; on a social level, creates a stigma around such shares.
A recent study concludes that in order to meet a 2°C warming target, 33% of oil reserves, 50% of gas reserves and over 80% of current coal reserves must remain unused. Policy makers’ attitudes toward their territorial fossil fuels are generally inconsistent with their commitments to this temperature limit. A “carbon bubble” is created where not all of the fossil fuels already invested in can be used, essentially making these investments worthless. The markets are betting on governments not keeping to their pledges – an intrinsically risky strategy.
Desire to divest?
Ultimately, the likelihood of widespread divestment of fossil fuels goes into a deeper philosophical issue around our capacity as a society to change mainstream thinking. When will we prioritise managing our planet’s natural resources over bagging cheap flights, cheap fuel and generally a relaxed attitude toward our own environmental impact? Throughout society there is a deep-rooted inertia to change, and a general attitude of thinking that there is no alternative, or indeed no point in changing our behaviour. The damage of not changing our behaviour is unlikely to be seen in our lifetime, and probably the benefits of changing it won’t be either. This reluctance, resistance and indifference to change is echoed throughout society – both in financial analysts refusing to believe the uncertainty of fossil fuel investments and in individuals who continue to consume goods and services, without considering the scaled-up consequences of their actions. As Dieter Helm puts it, we see “a rather bored indifference [to climate change], since life goes on”.
20 years ago the way the technology revolution has transformed major aspects of life on earth would have been totally unimaginable. This revolution has facilitated vast economic growth and generally improved living standards across the globe (though unequally). The environment has suffered, directly and indirectly, as a result of this growth. Extreme changes to how we interact across the globe – technologically, geographically, economically, socially – have occurred rapidly over the last decade or so. This demonstrates that radical change is possible, whether it was expected and planned for or not. Why then, is it so hard for us to shake our apathy to change around a topic as important as climate change? Until the full force of climate change affects us today or tomorrow, will we truly commit to believing in change?
What is being done and what can be done?
So far a pretty bleak picture has been painted. Thankfully, this isn’t the whole picture. There are some pioneering people and projects out there who are doing a fantastic job at driving divestment and change (350.org, Divest London, Rockefeller Fund, CarbonTracker– to name a few) and the movement is growing rapidly. Recently, Berlin has joined other European capitals such as Paris, Oslo, Copenhagen and Stockholm in voting to divest from oil, coal and gas companies. A full list of those committed to divesting from fossil fuels can be found here http://gofossilfree.org/commitments/.
Organisations have enormous potential to drive change, and we are likely to see a positive domino effect as soon as more organisations and companies begin to take the financial carbon risk of their investments seriously.
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