By Dmitri Leybman, UChicago Alumni for Climate Action
The global economy could lose 10-18% of GDP by 2050 if we fail to address climate change. Climate change will cause an additional 250,000 deaths per year between 2030-2050. Burning fossil fuels acts as a main catalyst in driving climate change around the globe. Our economic system often appears to be tethered to the increasing use of fossil fuels to meet our energy demands. This extensive use is untenable. As greenhouse gases continue to pollute our air, they will continue to have escalating economic and social effects that will need to be addressed to ensure a viable future for all of humanity. Since the burning of fossil fuels negatively contributes to the planet’s future well-being, its regulation is paramount to our long-term survival. One approach to reducing fossil fuel use is government regulation. Another strategy is to ask leaders of investment firms and large institutional investors–including universities–to remove fossil fuel companies from their investment portfolios and make them less attractive as investments.
Divestment is a pillar of a broader movement to impact the environmental direction of our country and make concrete choices about our current actions and their repercussions into the future. This entails that we take responsibility and guide institutions representing the public interest into socially-productive and not environmental-depleting outcomes. We can understand and distinguish between short-term growth and long-term prosperity that protects the integrity of our environmental circumstances. We can also choose what economic activities we find it irresponsible to continue to promote. The reckless burning of fossil fuels is such an activity. Companies that pollute should pay. The costs of their private transactions have outcomes on nonparticipants–what are sometimes called “externalities”. These externalities are not usually appropriately priced when one incorporates the long-term cost of climate change and the resulting social upheaval. We can’t commit to continue to provide them with ammo to deplete our future. We urge divestment because we don’t want to subsidize industries harmful to our future well-being. We urge it because there are concrete negative outcomes from fossil fuel consumption and they range from the local to the global–from the polluted airways of children to large-scale climate change spurring massive migrations of people. We demand environmental accountability and divestment is a core of our solution to the problem.
Why demand divestment? To take collective action in putting pressure on financial intermediaries to alter their readiness to invest in entities compromising this very future. We pursue divestment even as we acknowledge that investment strategies are evaluated on their yields. Divestment does mean disregarding profitable but environmentally harmful opportunities in one sector in favor of environmentally sustaining opportunities in another sector. We acknowledge this may reduce financial returns. However, we see past this outcome to embracing a wider more flexible framework of how responsible institutions ought to act. Our financial representatives aren’t obligated to pursue every line of profit regardless of its wider ethical and social obligations. Stakeholders can steer the direction of our future any way we want, and that means we can abjure socially and environmentally harmful economic opportunities. This loss is society’s gain. Weighing the financial revenue from investing against the very existence of our planet seems to be a losing game. What financial profit can be extracted without there being a future in which to extract it in?
By demanding divestment, we do so in the context of different roles. We can promote our agenda at the ballot box by voting. We can reinforce values with our children that teach them to appreciate the environment and act responsibly toward it. We can also act as consumers showcasing our preference for sustainable economic consumption. Our role can also be as alumni of a distinguished university whose values we feel should be consistent with the integrity of the scholarship they promote. This University is one of the most significant educational institutions in the country with an endowment pegged at nearly $10.4 billion. By that very fact, they have the firepower to really fuel different economic sectors by making financial commitments to fund their activities. This is where we believe divestment should be a financial anchoring dislodging a firm insistence on short-term profitability over a careful assessment of long-term outcomes. Rather divestment seeks to reallocate resources to environmentally-non-depleting activity and away from environmentally harmful ones.
The University of Chicago has a responsibility to its students and community members to invest in economic opportunities that promote a viable future for itself and succeeding generations who’ll face the consequences of decisions made right now. We need to expand our time horizon and take a larger view of our decisions and their wholescale repercussions. This responsible direction would serve the interests of its community, students, and the wider public. We also urge that it’s time to stop giving oil companies subsidies, stop letting them shove their pollution (an “externality”) on frontline communities, and change the game. Solar and wind farms are cheaper than fossil fuel plants – because once you set it up, the fuel is free. That’s close to zero marginal cost – in economic terms. Geothermal innovations like those from Fervo Energy are poised to take the skills from oil and gas industry work and drill for something else – moving heat – instead With energy storage, we can get more clean power, too. When will UChicago REALLY support innovation and a better future?
The time to act is now. Sign the alumni petition here to join the fight against fossil fuels: www.uchicagoforclimateaction.org