WHY DIVEST?
So, we want to fight climate change. But why divest?
There are numerous reasons why it is smart to divest from fossil fuels, and we've outlined them here in 4 sections:
PROJECT 2
We've also included a section addressing rebuttals to divestment. If you have any questions on our reasoning, check out this section:
Finally, you can find our full divestment proposal, sent to the Board of Trustees, as well as updates on it's status here:
PROJECT 3
THE ENVIRONMENT
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Climate change is happening, and is overwhelmingly caused by humans burning fossil fuels, especially the dirtiest fuel, coal.
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Climate change could be disastrous, leading to extreme weather, rising seas and the loss of millions of species.
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It’s wrong for fossil fuel companies to profit off the destruction of the planet, and it’s irresponsible for Northwestern to invest in those companies.
Since the Industrial Revolution in the late 18th century, atmospheric carbon levels have skyrocketed. The Intergovernmental Panel on Climate Change (IPCC) concluded in 2013 that global warming is overwhelmingly caused by humans, and a large portion of that warming is attributable to carbon dioxide emissions from fossil fuels, particularly coal.
When fossil fuels are burned, they release CO2 and other greenhouse gases into the atmosphere, trapping heat and warming the planet. Coal is the dirtiest of them all, releasing the most CO2 when burned and spewing toxins like mercury, lead and sulfur dioxide into the air we breathe.
The IPCC estimates that Earth has already warmed by 0.8 degrees Celsius in the past century, and agrees that if the atmosphere warms by more than 2 degrees Celsius, the effects of climate change will be disastrous and irreversible.
Climate change is usually thought of as something that will affect future generations, but the truth is that it’s already started to cause some serious damage. Sea levels are rising and glaciers and ice caps are melting, which means coastal areas are slowly being submerged. Droughts, tropical storms and heat waves have all increased in duration and intensity (think of California, Typhoon Haiyan, or Superstorm Sandy). And millions of species are losing habitats and food sources as a result of warming. The only way to avoid even more harmful effects in the future is to take action now. By divesting, Northwestern can disempower the fossil fuel industry and turn the tide on climate change.
HUMAN RIGHTS
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Climate change is a human rights issue, but it’s important to realize that not all humans will be affected proportionately.
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Poor communities/nations of color will bear the brunt of the harm, but they didn’t even cause the problem. Wealthy, predominantly white nations are the ones burning the fossil fuels that have negatively impacted people around the globe.
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By investing in the fossil fuel industry, Northwestern is complicit not only in the degradation of the earth, but also in the degradation of human lives.
We know burning coal isn’t good for the planet, but it’s also terrible for people’s health, making this a human rights issue, too. Coal pollution causes diseases like asthma, mercury poisoning and cancer. The Clean Air Task Force estimated in 2010 that more than 13,000 premature deaths and 20,000 heart attacks were caused by pollution from coal-fired power plants in the United States. What's worse, the main victims of coal pollution in the US are poor communities of color, because those power plants are disproportionately located in minority, low-income areas.
For climate change, too, not everyone will be affected equally. While wealthy, industrialized parts of the world like the U.S. and Europe have burned the most fossil fuels, the worst effects of climate change are in developing countries that haven’t caused it, mainly in Africa, South America and Asia. As sea levels have risen, inhabitants of low-lying islands like the Maldives have been forced to evacuate their homes, becoming climate refugees. As crop yields decrease, people will face food shortages and lose their agricultural livelihoods. And as droughts increase in intensity, the need for clean water will force people to fight to survive.
So climate change is real, and it’s affecting people-- disproportionately-- now. But why is nothing being done about it? Because the people whom climate change is hurting most are the groups with the least political representation among decision makers. As long as we continue allowing fossil fuel companies to influence first-world leaders, minority and developing communities will continue suffering from climate change as those in power benefit from the status quo.
ECONOMICS
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Fossil fuel stock prices are worth much less than they seem, failing to account for the limited amount of fossil fuels we can burn if we hope to address climate change.
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Coal prices have already tanked, and the longer Northwestern invests in them, the more money it loses for the university.
So fossil fuels have a lot of downsides, but the money must make up for it, right? Fossil fuel companies would like us to think so, promising hefty returns with their high stock prices. But much of this value is based on the assumption that these companies will profit from fuel reserves burned ten or more years down the road. In reality, these reserves are five times larger than what we can burn if we have any hope of keeping the planet’s warming under 2°C. Essentially, fossil fuel companies have pumped their prices full of air, creating a “carbon bubble” that’s ready to burst.
However, as we begin enforcing international limits on carbon emissions and moving toward cleaner sources of energy, fossil fuel companies will be forced to leave reserves underground, drastically decreasing their stock value. Suddenly, these holdings become “stranded assets” for their owners, paying much lower returns than originally expected. Nothing sparks panic like the thought of losing money-- increasingly, fund managers are assessing their portfolios for exposure to climate risk, and fossil fuel free mutual funds are popping up everywhere.
For coal, however, the chance to avoid losses is long gone. Reuters reports that coal stock prices have fallen by 50 percent since 2011, and as we shift to renewables and move to cut emissions, those stocks will continue to plummet. Even China’s notoriously high coal consumption fell in 2014 alongside a commitment to cap its use. Meanwhile, Northwestern continues to cling to these crumbling investments, losing millions that could go to scholarships and other resources. Come on, NU-- it’s time to clean up that dirty money.
NU'S LEADERSHIP
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Northwestern students have led divestment movements in the past, but Northwestern hasn’t ever fully divested from anything. It’s time now for us to stand on the right side of history.
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Northwestern aims to be a leader in sustainability and address climate change-- but our investments don’t mirror those goals.
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Other prestigious academic institutions have started divesting from fossil fuels, and it’s time for Northwestern to join the fight. We can help pave the way for huge change.
Divestment movements are not new to Northwestern. Just a decade ago, students pushed NU to partially divest from companies enabling violence in Darfur. In the late 1990s, students called on NU to end investments in corporations operating in Burma, resulting in divestment from two companies. And before that, the Trustees severed ties with a handful of companies upholding apartheid in South Africa. Students have been calling for social responsibility for decades, but Northwestern has never fully delivered. Hopefully this time will be the charm.
If Northwestern were to divest from fossil fuels today, we would be in good company-- hundreds of universities, foundations, religious institutions, and governments have committed to full or partial fossil fuel divestment. The list includes ranges from our peer institutions like Stanford, Syracuse and the New School to governments like Seattle and Norway. Even the Rockefeller Brothers Fund, managed by the family of the oil tycoon himself, divested from fossil fuels in September 2014. Right now, Northwestern has the opportunity to join our peers and become a trailblazer in fossil fuel divestment.
But beyond joining the movement, Northwestern should divest because fossil fuel investments defy our mission and duty as an academic institution. Northwestern’s strategic plan states, “[We will] contribute to the solutions for renewable energy and a sustainable environment and to how public policies and economic incentives promote implementation of new technologies and practices.” But we can’t hope to contribute to solutions when we’re still investing in the problem. To be morally consistent, we need to align our financial actions with our environmental values.
REBUTTALS
REIMAGINED
Northwestern taking out its investments wouldn't really change anything because we have so little invested in coal.
Northwestern has $17 million invested in coal companies, which would not put even a small dent in the coal industry. But we're not suggesting we can change the world singlehandedly. Divestment is all about coordinated, international action, and when hundreds of institutions around the globe divest, it can make a difference. This isn't about Northwestern bankrupting the coal industry-- it's about being a part of a bigger solution.
The endowment shouldn't be used to make a political statement.
The purpose of the endowment is to gain as much interest for Northwestern as possible, which is then used to fund professorships, scholarships and part of our operating budget. But while the endowment is not intended to make political statements, what Northwestern invests in is inherently political. By investing in coal companies, Northwestern is already making a political statement saying we condone an industry that's degrading the earth and human lives. Divesting from coal and fossil fuels would ensure our investments line up with our values and that the political statement we're making with our investments is one we want to make.
Divestment would harm our endowment.
Only $17 million of Northwestern's nearly $10 billion endowment is invested in coal companies, which amounts to slightly over one percent of our endowment. Divesting from coal would therefore have a negligible impact on our endowment as a whole, if it had an impact at all. Further, given the drop in return of coal stocks (see the "Economics" tab for more details), it's quite possible that by not divesting we've actually harmed our endowment more than we would have had we already divested.
Divestment is hypocritical, because we still depend on fossil fuels.
We can't just cut fossil fuels out of our daily use tomorrow, but we can cut them out of our endowment. Doing so isn't hypocritical-- it facilitates a turn away from the energies that are harming people and our planet and helps build up sustainable alternatives like wind and solar. By divesting from coal, we're building political power against the industry, which will reduce the industry's lobbying power and accelerate a transition to renewables. So we don't need to not use coal or fossil fuels to divest from them; by divesting, we can actually help reduce society's dependence on fossil fuels.
There are more effective ways to address climate change than divestment.
We're not arguing that divestment is the only way to combat climate change. The fight against climate change is going to be a long one, and it's going to be a worldwide effort. Researching new energies, creating and passing policies, and taking individual actions are all necessary to make a difference. And Northwestern can certainly play a role in all this-- we can adopt sustainability principles into our investment strategy, commit to carbon neutrality or purchase renewable energy. But these efforts are undermined if we're still invested in fossil fuels, especially coal. Northwestern can and should pursue any tactics possible to address climate change, and divestment should be a part of this approach.
Divesting from coal opens us up for a slippery slope where everyone will want us to divest from everything.
There have been two divestment movements at Northwestern prior to ours-- South Africa in the 1970s and Darfur in the 2000s. On campus today, there are two movements: Fossil Free NU and NUDivest, which calls for divestment from six companies complicit in human rights violations in Israel-Palestine. When divestment campaigns arise, our Board of Trustees evaluates each case individually. We believe this is the proper thing to do. No matter how many things Northwestern Trustees decide to divest from, they always have the decision to say "yes" or "no" to the next proposal that comes their way. Trustees should evaluate requests on a case-by-case basis and make decisions based solely on the valor of each divestment movement-- not off of previous movements or divestment decisions.