#3 Continuing on Divestment

We are back again, continuing our journey exploring the idea of divestment. If you're new here, check out my last post on divestment first before starting this one.
Let's pick up the question raised last week and continue from here: Is fossil fuel divestment actually an effective climate warming mitigation mechanism? 

Since the campaign's primary aim is not to weaken the fossil fuel industry economically, measuring its effectiveness is rather difficult. It can be said however that the majority of scholars I here referred to consider the divestment movement mostly successful.

As a direct impact of the campaign one can identify the growth of supporters and the exponentially rising number of institutions and individuals which committed to divestment since the start of the campaign five years ago: Today, 807 institutions and more than 58,000 individuals have fully or partially divested accounting for a total of around $-US 5, 56 trillion (self reported by Go Fossil Free)
These numbers do show that the publicity of the movement works. Subsequently, one could project a growing political support and possibly some sort of institutional legitimacy (after all, who would officially divest their money if they wouldn’t consider the movement having a point?). 

Economically, scholars suggest that there is a recognizable indirect impact of the campaign on the reputation of the fossil fuel industry which is gradually experiencing a weakening social license (Ansar et al., 2013). This point is empirically backed up by a 2017 survey of 100 institutional investors. This survey found that in recent years, 27% of them had made significant changes in their portfolios in order to divest from fossil fuels (DeMasters, 2017). 

Interestingly, there is a distinction to be made within the industry. Within the oil, gas and coal sectors, the latter (and smallest) appears to suffer the most legitimation issues as leading companies make efforts to frame gas as the preferred fuel for sustainable energy transitions. Subsequently, energy companies increasingly dissociate themselves from coal in order to prevent a spill-over effect (Ayling, 2017). 

But, what’s the drawback?

Looking through the literature, one finds that numerous scholars are inclined to draw a positive conclusion in terms of the divestment campaign (Franta, 2017, Gunningham, 2017, Moss, 2017, Richardson, 2017). Yet, it is worth mentioning that many of the researchers mentioned here have been personally involved in divestment and as for any paper, true scientific impartiality is not guaranteed. Take for instance Benjamin Franta (2017, (@BenFranta) and his paper analysing the litigation process of the divestment campaign against Harvard Law School – he himself was a major driving force behind the campaign.

A sobering aspect of this debate is the findings of a study in 2015 which very critically assessed the divestment movement. It was found that only 34% of all college divestment commitments are in fact fully divested by now and criticized that the total share of investment withdrawn from the industry accounted for 1.6% of the total assets only (Peterson, 2015). Considering the peculiar strategy of the campaign outlined earlier, one can here question how strong this point is. After all, for the moral discourse behind investments in the industry, these figures might be less powerful than the 'felt' strength of the campaign and the perception of decisionmakers in this matter.  

Yet, a number of scholars find that there is more potential to be used. Despite, a study by the UN finding, that there is a significant rise in climate change litigation cases Franta (2017) debates that the movement has not yet made enough use of the matter of climate change litigation.

When digging deeper in the rather grey zone of literature, there are some truly negative publications. Many of which, coincidently, on a page funded by the independent petroleum association of America called ‘Divestment Facts’. Here, one can find links to a number of statements of institutions which have not divested so far. I had a look through them and came across a statement of the president of Harvard Law School. He put forward his concerns that a) divestment is a rather ineffective mechanism which could distract one from effective measures, b) that withdrawing assets from that significant sector will diminish its influence and c) that  the institution financially relies on the returns from assets in the fossil fuel industry in order to fund research which would be of much greater use when combating climate change. In the last two posts, we talked about the point a) already. The second point made is valid; however one might argue that if the core business of the specific company is inherently environmentally damaging even some fraction of influence could change much on this. The third point has recently been invalidated by the university itself: 

Following a five-year divestment campaign, this year the university announced to pause its investments in some fossil fuels.

Partly Succeeded: Harvard 'pauses' marking a milestone after years of efforts by @DivestHarvard
Source: Twitter.com

I am curious to see where the divestment campaign is heading. I personally am not too sure whether the campaign operates “fast” enough – given the incredibly small amount of time there is to turn around investments relying on emissions.
Finally, of course - our dive:

Et voilá: We find ourselves in the capital of the country which of all countries relies least on fossil-fuel energy: Reycivic, Iceland! 83% of its primary energy is produced by domestic renewables, most of which by Geothermal energy. Thus, 90% of all heating in the (usually rather chilly) country is powered by renewables. Mostly, this is thanks to the country's unique geology and geopolitical incentives to become independent from energy imports.