Following Up On The Divestment Panel

Jeannie Bartlett ’15

There were a number of things I wanted to add to my comments at the Student Divestment Panel that I didn’t get to, so I’ll add them here.

I’m surprised to feel the need for this first clarification:  the shift off of reliance on fossil fuels is not just a nice goal to have, nor is it something society might forget about.  I can see how here at Middlebury, where we feel fewer of the effects, it could be easy to feel that way.  But climate change and fossil fuels extraction already impact the health, safety and prosperity of people around the world and their impacts will only increase with continued use.  Seven years from now, when climate change has caused 75-250 million people in Africa alone to experience extreme water stress and halved yields for rain-fed agriculture, we’re not going to just forget about moving to renewable energy and reducing consumption.  That water stress will make fossil fuels dramatically increase in price because of the intense water-needs of extraction and energy-generation.  Climate change is going to become increasingly relevant, and renewable energy and efficiency are going to become increasingly logical and cost-effective.

Next, Ben Wiggins ’14 and Ryan Kim ’14 both expressed the need for undeniable proof that divestment will not hurt returns before they could support it.  I agree that it would be unwise for the school to make rash investment decisions, but I don’t think that means we should wait for undeniable proof.  If Germany had waited for undeniable proof of climate change, they wouldn’t have enacted climate legislation in 1995 and be generating 40 percent of their electricity from renewables today.  No, they’d look more like we do in the U.S.: having refused to sign the Kyoto Protocol, we continue to fail to pass climate legislation, we hand out $6.6 million per day in tax breaks to the five wealthiest fossil fuel companies and we generate two percent of our power from renewables.  Sometimes waiting for undeniable proof means missing the boat.

Additionally, there is reasonable evidence that divestment will not carry a significant return penalty on the endowment.  The Aperio study on the subject finds a 0.0101 percent increase in risk, with an associated 0.06 percent theoretical return penalty. But there’s also significant risk in staying invested in the fossil fuel industry.  A study by HSBC shows that as much as 17 percent of the value of certain fossil fuel companies is at risk due to their valuation of reserves that will be “unburnable” when efficiency improvements and climate legislation are made.  Studies by Mercer, the UN Environmental Program Financial Initiative and the Carbon Tracker Initiative among many others show a looming “carbon bubble.”  I have seen no studies demonstrating that there would be a significant loss of returns associated with divestment, mostly just a sense of security in the status quo.

I went in and talked with Vice President for Finance and Treasurer Patrick Norton last week about what he would do if the College were to lose returns for any reason.  As I expected, he was very clear about two things that would not be cut: financial aid and salaries and benefits for staff and faculty salaried less than $50,000 per year.  Two places the College could cut back are in capital improvements, or in freezing salaries or reducing benefits very marginally for faculty and staff earning more than $50,000 a year.  Obviously I hope and expect the school won’t need to make those cuts for any reason, divestment-related or otherwise.  Nevertheless, those are cuts I find acceptable, and I take comfort in the dedicated protection of financial aid and lower-paid employees.

Finally, I want to highlight my hopes for the divestment movement.  I hope Middlebury will announce its commitment to divestment, recognizing that the fulfillment of that commitment will take time, at the Board of Trustees meeting this May.  I hope that schools and cities beyond the almost 18 already committed will be catalyzed by our decisiveness.  The movement will spark conversations like the one Sunday night about our rights and responsibilities in this changing world.  The media will continue to make that conversation national and global, reflecting mounting national pressure for climate change action.  Individuals will become more aware of how their actions affect the global community. The media will stop citing the anti-clean energy, climate-denying messages of fossil fuel front groups, like the American Enterprise Institute and the Heritage Foundation that received $1.6 and $2.5 million respectively from ExxonMobil and the Koch brothers over the last five years.

President Obama will reject the Keystone XL Pipeline.  Congress will pass climate legislation because fossil fuels will no longer be allowed to spend more than $400,000 per day lobbying and they won’t be allowed to make large campaign contributions.  Congress will redirect its subsidies from fossil fuels to renewable energies.  Employment will expand as the growing renewables sector creates more jobs than the increasingly mechanized fossil fuels sector had been.  Coal-fired power plants will close and asthma and cancer rates will stop climbing in their surrounding neighborhoods.  We won’t raise the global temperature that second degree Celsius.

Obviously the divestment campaign is only one of many tactics in a many-sided approach to reaching those goals.  Reducing personal consumption, educating yourself and others, protesting injustices, calling legislators, voting and so many other forms of engagement are crucial.

Of course climate change is only one of many critical issues.  But it is a defining issue of our generation and our world, and I believe divestment is a novel and persuasive tactic that has the potential to catalyze a lot of the changes for good I want to see.  Please be in touch to continue the conversation with me.