THE CALL for divestment from fossil fuel extractors could soon be over. Although short of their original goals, the demise of the campaign may create a better and more lasting outcome than any of the protesters could have imagined.
Divestment as a strategy is inherently flawed. The protest leadership is well aware of this. At best, the complete closure of every listed fossil fuel business on the planet would impact less than 70 percent of the world’s combustible carbon reserves.
At worst, even nominal success results in greater ownership of fossil fuel businesses with people and institutions that have less interest in protecting the environment, further gridlocking the state of affairs. There is no win for the planet in an institutional divestment strategy.
Divestment as a message is fleeting and has less of an impact than its supporters would like to believe. Claims of victories against apartheid, tobacco, sweatshop labour and the like are grander in the memories of past protesters than their real impact.
The Occupy movement is the latest example of a fizzled message. Their rightful claim of social exploitation by a group of disproportionately wealthy bankers with a cavalier attitude towards social and economic equality went viral. Yet, it lasted a few months before being cast aside by a public that initially cared but soon forgot. The cavalier attitude outlives the protest. The leadership had no plan. No next step.
Next step
The divestment protesters, however, and particularly the students that have created a furore across college campuses, do have a next step.
Unlike their brothers and sisters that participated in the Occupy movement, these protesters have a real opportunity to make a lasting impression on the world. But before the Divestment campaign goes the way of the Occupy movement, the protesters should graduate directly to the ultimate objective of their efforts.
The goal is not the collapse of fossil fuel businesses. They will fade away as demand for their goods diminishes. Surprising to many, this is already happening. According to Carbon Tracker, falling demand in the US since 2008 has caused at least 26 coal companies to go into bankruptcy. During this period, the value of coal companies fell an average of 29 percent, while equity markets rose more than 30 percent. This is due to a combination of regulation, efficiencies and alternatives. The same fate will come to oil and gas companies.
Reuters reports that since 2005 the US population increased by 20 million people and output by more than 10 percent, yet the consumption of petroleum products in the US declined by more than 2 million barrels a day. And the collapse in oil prices has not spurred an increase in demand over the past six months. The writing is on the wall for these businesses.
Part of a solution
The way to really turn up the heat is to re-focus on emissions mitigation. Granted, this is a more complex issue. It requires policy intervention together with economic transition. However, addressing demand through regulation, efficiencies and alternatives will have a far greater impact on curtailing carbon and other greenhouse gas emissions. Equally, it will be more meaningful on fossil fuel producers than changing their share ownership.
And what a time it is to graduate to emissions mitigation. There just happens to be a major global discussion on emissions mitigation scheduled this year in Paris. These students are the vanguard of the future generations most at risk. Through their actions, they have proven a desire to be part of the solution. They have formed a body and made a statement based on what they believe is right. They should be part of the process that makes things right.
Collectively, their voice should be given a seat at the table for the Conference of the Parties (COP). Their influence in Paris would have more of an impact and be more lasting than trying to convince a prepared and steadfast university endowment community to alter its ways. But there is little time left to protest. Collaboration requires commitment, planning and action. The leadership of the campaign is well versed in COP politics. They should be aiding the efforts of students from across the world’s campuses to become a global collective.
Rebellion may be a rite of student passage, but this is too great an issue and too great an opportunity to dally with passages of youth. The world needs to make crucial and definitive statements about the future.
The protesters have a far more vested interest in a cleaner, brighter future than the politicians that have struggled to make headway for years. Perhaps the younger generation can make a difference. They have certainly earned the right to participate.
Gerrit Heyns is the London-based co-founder of Osmosis Investment Management, a global investor in resource efficiency. He was named as one of the top 50 people influencing global finance in 2013 by the Institute of Chartered Accountants.