Feb. 13 marked Global Divestment Day, a day designated to celebrate and promote organizational and financial independence from the fossil fuel industry. Proponents highlight the importance of slowing climate change by pulling money from the fossil fuel industry to show their organizations’ disapproval of the oil industry’s contributions to climate change.
At NC State, students involved with the Climate Reality Project showed support by holding a meeting to educate students on what divestment is and how NC State is participating. NC State holds over $43 million in the fossil fuel industry of a $1.3 billion endowment, and supporters of divestment would like to see NC State liquidate all positions in these industries. In the view of those involved with the Climate Reality Project, investment in these industries wrecks the environment, and profiting from these investments is morally wrong.
It’s no doubt that climate change is a reality; the earth’s average surface temperature has warmed approximately 1.62 degrees Fahrenheit since the late 1800s. While it’s up for debate how much of this change is natural, it’s quite clear that increased concentrations of greenhouse gases resulting from the combustion of hydrocarbons cause part of change. And this change contributes to an array of negative consequences; ocean levels are rising from melting ice caps, which will cause destruction of coastal cities.
NC State students care a great deal. It’s not uncommon to see booths in Talley run by students advocating for policy changes directed toward regulating the industries directly responsible for creating greenhouse gasses. The opinion and news sections of Technician have no shortage of columns about climate change and how something must be done to stop it. But is divestment the best solution?
NC State obviously cannot cripple the fossil fuel industry singlehandedly, but as many organizations divest, the fossil fuel industry will suffer. Our school profits from the growth in value of energy sector investments, and it is my position that investment in and usage of fossil fuels is not immoral nor something to be ended on principle alone.
The investors responsible for managing the NC State endowment reported a 12-13% return in 2018. NC State educates thousands of engineers and scientists who go on to develop technology that makes the use of alternative energy more viable, and money made from investment in the fossil fuel industry represents a portion of the money used to pay for these students’ education. We use profits from the fossil fuel industry to educate engineers who make using other forms of energy more feasible.
Additionally, divestment as a method of decrying the use of fossil fuels does not address the net good which comes from using them. Using fossil fuels such as oil, coal and gas makes the cost of living as low as it is. While solar and wind energy gain traction, only a few of these projects exist without government funding because they are significantly more expensive than traditional forms of energy. Because alternative energy is typically not as cheap as oil and gas, we don’t use it as much. Keeping energy cheap is crucial to maintaining and bettering everyone’s standard of living; every good or service depends on energy in some way.
It’s no secret that ending climate change will be expensive; experts estimate that approximately $50 trillion is needed to meet the Paris Agreement’s target. Those in favor of divestment and ending climate change argue that the cost is worth it, and that we must preserve the planet at all costs.
The costs of climate change alarmism will be paid by the poorest people in the world, and the richest will benefit. To say that mitigating coastal flooding in 2200 should receive the same spending priority as fighting hunger or malaria right now is foolish. A life which can be saved now by growing cheap crops using fossil fuels outweighs a life saved from a flood 180 years from now. But the well-intentioned environmentalists do not view it this way. Every time an enraged environmentalist cries, “Do something!” there is a cost.
This is not to say that divestment for purely economic reasons isn’t justified; the managers of the University of California system reportedly chose to divest for financial reasons. Whenever the oil industry is no longer profitable and investments do not appreciate, I support divestment. But divesting as a way of denouncing fossil fuels only limits NC State’s funding and therefore limits our positive impact on North Carolina and the world.
