Bill McKibben 12:05 a.m. EST January 23, 2016
Buy Photo (Photo: GLENN RUSSELL/FREE PRESS)
There are times when your desire to do good runs smack into your more mercenary impulses. Yes, you know that buying an electric car would be environmentally responsible, but the payments are high and you don’t want to worry about the battery. So, Subaru Outback.
But the divestment plan that Gov. Shumlin offered up in his State of the State address this month is like winning a free Tesla. You get to feel good, it goes really fast and far, and it doesn’t cost you a thing.
In fact, as testimony at the Statehouse last week made clear, if the state treasurer and state legislators had only agreed to divest from fossil fuels when the idea was first proposed three years ago, it would have been better than free: they would have saved the state’s pension fund $77 million in losses. When you think how hard the Legislature works to balance the budget each year, that’s an enormous number.
The savings come because energy stocks turn out to be a bad investment. The global divestment campaign — which began in the fall of 2012— is designed to slow global warming. And it’s been effective, driving home the basic point that the world’s fossil fuel companies have five times as much carbon as the world’s scientists think we can burn. That means that if we follow their business plan, the planet tanks — which in turn means they are rogue companies, like the ones invested in racist South Africa that Vermont divested from a generation ago. It’s a moral argument.
But it also turns out to be an economic argument, because increasingly states and nations are trying to turn away from fossil fuels, devaluing those reserves. As the governor of the Bank of England told leaders of the insurance industry last fall at Lloyds of London, they were heavily over-exposed to assets at a high risk of becoming “stranded” as this carbon bubble begins to deflate.
It’s too late for Vermont to lead the way here. Already California has done what Shumlin recommended, selling its coal stocks and launching a study of its oil and gas investments. They followed institutions like Sterling, Goddard and Green Mountain Colleges. Not to mention the biggest insurance companies in France and Germany, or the Norwegian sovereign wealth fund (which is the biggest pool of investment capital on earth) or, for that matter, the Rockefeller family, heirs to the original fossil fuel fortune, which decided that investing in fossil fuels was neither prudent nor moral. The total size of endowments divesting to date? $3.4 trillion with a T.
But the governor did provide a moment of powerful leadership, when he singled out ExxonMobil stock for divestment, citing the recent revelations that Exxon knew all about climate change 30 years ago but then spent tens of millions spreading deceit, disinformation and denial. This burgeoning #exxonknew scandal has already drawn the attention of federal legislators — Bernie Sanders, for instance, has declared that no Exxon executives will work in his administration, and Peter Welch has pushed hard for a federal investigation mirroring the one launched by the New York attorney general last fall. A decision to divest would be a powerful blow toward holding Exxon accountable.
Treasurer Beth Pearce has argued that it would be better to engage with companies to get them to change, and indeed she made the trip to Texas to argue at Exxon’s last shareholder meeting for some minor changes — changes she failed to win, not surprisingly since dissident shareholders have been making similar gestures for a quarter century. We don’t have time for another quarter-century of futility.
And we don’t have so much money in this state that we can keep wasting it indulging the treasurer’s wish to give corporations the benefit of the doubt. For three years she’s been relying on a study claiming that divestment would be costly. But it turns out her numbers were wrong, and all the other research was right. Had she acted morally, the state would have profited. Instead, she sat on her hands and the state’s pensioners — not to mention the planet — got burned.
Enough is enough — this session is the time for divestment.
Bill McKibben of Ripton is founder of the climate campaign 350.org.
Global Climate Change