Yesterday, 40 Catholic institutions announced their intention to divest from fossil fuels. While environmental activists are hailing this move as a huge win for the divestment movement, there are –as per usual- some important details being overlooked.
First and foremost, several of the institutions taking part in this announcement did not have any fossil fuel investments to sell. This is a common theme among many schools, pensions and cities that have “divested;” they simply want to placate activists or signal their support for transitioning away from fossil fuels. The issue with this is that it confuses symbolic action with substantive action. This is, in fact a problem inherent to the divestment movement as a whole. As noted by Bill Gates:
“False solutions like divestment or ‘Oh, it’s easy to do’ hurt our ability to fix the problems. Distinguishing a real solution from a false solution is actually very complicated…”
This “false solution” may actually be worse than ineffective, it may be counterproductive. While divestment activists are so quick to label energy companies “evil,” they very rarely acknowledge the great strides the industry is making in renewables and the massive amount of investment dollars it is putting toward research and development. So, ironically, activists are pushing people to divest from the very companies that are leading the way on clean energy; like Exxon’s ground breaking research on algae-based energy or the $1 billion dollars BP, Statoil, Saudi Aramco, Eni, Shell and others have earmarked for carbon capture, utilization and storage and managing methane emissions.
The second issue with this divestment announcement is that most of these institutions profess to choosing “divestment” for moral reasons- even though fossil fuels have played an integral role in lifting people out of poverty. This is another point upon which Bill Gates has touched:
“When you turn to India and say, ‘Please cut your carbon emissions, and do it with energy that’s really expensive, subsidized energy,’ that’s really putting them in a tough position, because energy for them means a kid can read at night, or having an air conditioner or a refrigerator, or being able to eat fresh foods, or get to your job, or buy fertilizer.”
While Bill Gates may be one of the most prominent voices making this argument, he is far from the only one. In fact, even university students point out the hypocrisy inherent in demanding developing countries opt for a more expensive fuel source. Back in 2015, an op-ed by a Georgetown student pointed out:
“More than a billion people lack electricity in the world. Living in the poorest parts of Africa and Asia, these people are the ones who need fossil fuels the most. Over the last 30 years, China lifted 680 million people out of poverty by providing cheap and easy access to energy, powered overwhelmingly by coal. That’s how a nation with 90% extreme-poverty transformed itself into a world superpower.”
Over the next few weeks divestment activists intend to focus their efforts on pressuring the World Bank to divest. Given the World Bank’s mission to “work with countries to end poverty and boost prosperity for the poorest people,” we can only hope that they will see the divestment movement for what it really is; purely symbolic, highly counterproductive and unhelpful to the world’s poor.