pump.JPG

This photo taken Feb. 7, 2012 shows the oil fields of the Uintah Basin, southeast of Vernal, Utah.

(AP Photo/The Salt Lake Tribune)

By Adriana Voss-Andreae and Sandy Polishuk

In a recent guest column titled "State fossil-fuel disinvestment would be unproductive: Guest Opinion," Oregon Treasurer Ted Wheeler argues that "divestment is not the right strategy," while stating that he "wholeheartedly agree[s]" with the ultimate goals of those of us who are organizing this effort around the country in recognizing that climate change "threatens our economy, our families' health and livelihoods [and] ... our planet." Wheeler's arguments, often recycled by divestment opponents, are deeply flawed and miss the point entirely on what the divestment movement is about. We will examine Wheeler's arguments, explain why they are flawed and make the case that divestment is a powerful tactic in our fight for a livable world.

To grasp the seriousness of the climate crisis, we need to "do the math" as Bill McKibben, founder of 350.org, puts it: It is scientific consensus that if we emit more than about 600 gigatons of carbon dioxide we will heat up our planet above the threshold of 2°C — more than that risks catastrophe for life on earth, as virtually all governments on earth agree. The problem? Burning the fuel that these companies have in their known reserves would result in emitting over five times that amount. Fossil fuel companies' stock value is based on their expectation to burn these reserves.

Wheeler argues that rather than divesting, the "most effective role for the Oregon Treasury is to continue to demand responsible business practices" of the fossil fuel companies. This argument is based on the assumption that one can change the behavior of the industry to reduce carbon emissions. Shareholder action can work when the goal is to change small aspects of a company's overall operations.

However, in the case of fossil fuel companies, the goal is to reject a basic business model that relies on the extraction and burning of much more carbon than life on this planet can handle. There is no evidence that suggests that the largest companies, which own the vast majority of fossil fuel reserves, have any interest or ability to fundamentally shift their business strategy, nor of any evidence that our state, through shareholder activism, has the power to affect the fossil fuel companies' reckless behavior.

Wheeler's argument that "divestment has no measurable effect on the value of companies" is naïve and misunderstands the point of divestment. Divestment is not about trying to have a direct financial impact, which would be small even if every university and pension fund in the world was to divest. It's about building a movement to undermine the political power of the fossil fuel industry through stigmatization. History has shown that divestment campaigns have been extraordinarily successful at impacting the passage of significant legislation, which is why Nobel Peace Prize recipient Desmond Tutu, a leader in South Africa's successful divestment movement against apartheid, has been leading the call for a "apartheid-style" boycott of the fossil fuel industry.

Contrary to Wheeler's claim, "academic studies" have, in fact, clearly shown the effectiveness of divestment campaigns. One such study from the University of Oxford, backed by large financial firms like HSBC and Standard & Poor's, states that "the outcome of the stigmatization process, which the fossil fuel divestment campaign has now triggered, poses the most far-reaching threat to fossil fuel companies and the vast energy value chain." Many major investors have already pulled their funds from coal stocks, and the fossil fuel divestment campaign is growing faster than any previous divestment movement in history, giving it the "the potential to shift the political ground beneath the fossil-fuel lobby's feet."

When, finally, the political will is mustered to listen to our scientists and do what needs to be done, 80 percent of the fossil fuel resources will become unburnable, with their financial value dramatically reduced. Therefore, if Wheeler takes his fiduciary responsibility of managing our state's long-term financial health seriously, he will have to consider that fossil fuels are becoming increasingly risky investments. Investors are beginning to think that these assets may never be monetized and, indeed, may become liabilities. They are realizing that business-as-usual cannot continue. From big banks to prominent insurance companies to the International Energy Agency, an increasing number of global groups and investment firms have been giving clear warning signs about continuing to invest in fossil fuels. Oregon should lead by example and divest from fossil fuel companies while reinvesting in a livable future for our children, grandchildren and life on earth.

Adriana Voss-Andreae, M.D., Ph.D., and Sandy Polishuk write for 350 Oregon, a local affiliate of 350.org, an international grassroots campaign dedicated to solving the climate crisis.