Yesterday, the Financial Times reported that Bill Gates told them that divestment campaigns “to date, probably has reduced about zero tonnes of emissions” because “it’s not like you’ve capital-starved [the] people making steel and gasoline.” Instead, Gates argued, those campaigns should be more focused on investing in solutions like he is.
This argument doesn’t work for a couple of reasons. First, there is the obvious logical failing in suggesting that people should invest in what’s good instead of divesting from what’s bad. Where does Gates think the money divested from the industry is going if not into more environmentally friendly investments? The whole point of the divest/invest movement is to move money out of fossil fuels and into clean energy solutions, so why is Gates pretending like it’s only removing money from the market?
The second point, acknowledged in the FT story, is that the primary aim of divestment campaigns isn’t to starve the industry of money, but to instead challenge its social license to operate. The campaigns are designed to raise awareness of the fact that the fossil fuel industry is destroying the climate, not directly bankrupt it.
That said, as one of the movement’s leaders, Bill McKibben, explained in the New Yorker yesterday in a piece about the divestment movement’s next targets, fossil fuel companies like Peabody cited divestment campaigns in its bankruptcy filing, and Shell has described it as having a “material adverse effect” on its business. And with investment portfolios worth literally trillions of dollars having divested, the movement is clearly having some impact on the industry’s bottom line.
On the flip side, in the LA Times yesterday, the University of California announced that it is divesting some $150 million from fossil fuels, primarily because they “posed a long-term risk to generating strong returns.” They’re divesting because the industry is in peril, it’s not imperiled because they’re divesting.
Plus, if divestment weren’t a concern for the industry, as Gates suggests, then the industry would simply ignore the attacks. Instead, they’re putting significant resources into combatting the campaigns. Why spend money on something that isn’t a threat?
But Big Oil has set up a whole website to spin the issue, created front groups, and placed a variety of op-eds defending itself.
Clearly, then, even the industry doesn’t believe Gates when he says divestment campaigns are having zero impact.
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