College students who support divestment of fossil fuel stocks are passionate about their cause. Just look at their word choices. Though they could never function even one week without hydrocarbon energy, they call fossil-fuel companies “rogue entities,” assert that oil, coal and natural gas interests have the “political process in shackles,” and believe most of the world’s known fossil fuel resources must “stay in the ground” to avoid “catastrophic global warming.” It’s a shortsighted view of energy ethics and corruption.
Their over-heated hysteria over climate change is fanned by groups like 350.org and college professors who rehash doom-and-gloom forecasts about rising seas, dying species and other cataclysms that they insist can be remedied only by terminating fossil fuel use and investments in fossil fuel companies.
But in their lemming-like rush to glom onto claims that human carbon dioxide emissions will destroy life as we know it, they reveal an abysmal understanding of true science, our planet’s turbulent climate history, creative free markets, and what academia once proudly espoused: open, robust debate.
Of course, deceptive information is exceedingly useful to community organizers and agitators, particularly those who occupy Oval Offices, endowed chairs, government regulatory agencies and Big Green war rooms ‚Äì and want to “fundamentally transform” the United States. Bombarding impressionable students with such intellectually dishonest drivel is equally useful … and detestable.
Just as bad, too many students devote their time and energy to divestment campaigns, when they should be learning and applying critical-thinking and ethical skills. Honest analysis reveals that divestment will have negligible to zero effects on atmospheric carbon dioxide levels, climate change or energy company stock prices, even if every university in the country gave in to the students’ anti-fossil fuel pleas.
Indeed, college and university endowments are not large enough to create even a ripple in fossil fuel investments. A recent Bloomberg analysis found that university endowments have about $400 billion invested in stocks; the National Association of College and University Business Officers puts the figure at $456 billion. Of that, only about 2.1% was invested in fossil fuel stocks in 2010-2011. That is a pittance in the overall stock market, which was valued at some $18 trillion in 2012 and now is much larger. In fact, it amounts to only about 0.05% or a nickel out of every $100 ‚Äì and any fossil fuel stocks sold by an endowment would be purchased by another investor almost immediately.
Moreover, fossil fuel stocks historically have been good investments for schools. A Sonecon study found that endowment investments in oil and natural gas equities in 2010-2011 provided returns of a whopping 52.8% ‚Äì nearly twice the returns from all other U.S. publicly traded stocks, real estate securities and foreign equities. This fact is not lost on university presidents, who have a fiduciary duty to grow their endowments, to pay for student scholarships, new and remodeled facilities, and other expenditures that further their educational objectives.
American University trustees voted against divestment in November 2014, saying AU financial advisers “could not provide assurance that the effect of divestment would not be insignificant.” Actually, a recent Compass Lexecon analysis found that an investment portfolio totally divested from fossil fuels lost 70 basis points and cost significantly more every year in management fees to keep them “fossil-free.”
When asked whether he would sell University of Colorado fossil fuel stocks, President Bruce Benson said flatly, “I’m not going to do that.” Similarly, Harvard University President Drew Faust rejected demands for divestment and reminded proponents that Harvard “exists to serve an academic mission.” Harvard must be “very wary of steps intended to instrumentalize our endowment in ways that would appear to position the University as a political actor, rather than an academic institution,” she stated.
Just as importantly, the world’s largest energy companies dwarf the likes of ExxonMobil and other U.S. firms ‚Äì but are owned by foreign governments and are not publicly traded. Caterwauling college kids at Stanford, Swarthmore and elsewhere will not cause companies to abandon what they do best: develop and produce fossil fuel energy for people who need them for jobs, living standards, health and welfare.
That raises this discussion’s most critical point, which is generally brushed aside by divestment advocates. These campaigns are part of a global anti-hydrocarbon crusade that would inflict enormous harm on working class families, and even worse consequences on Earth’s most destitute citizens.
In 2012, coal, oil and natural gas supplied 87% of the world’s energy, Worldwatch Institute figures show. Further, despite the Obama Administration’s war on coal, International Energy Agency data reveal that global coal usage is rising and by 2017 will likely supplant oil as the dominant energy resource.
Fossil fuel companies and their shareholders know traditional forms of energy will continue to power the world for the foreseeable future, because there are no viable alternatives. Solar, wind and other energy resources cannot supply enough energy to meet the world’s needs; they are not price competitive without huge subsidies; and they require fossil fuels and millions of acres to manufacture, install and operate.
Nor is it sufficient to claim anti-fossil fuel demands are well-intended, when the real-world consequences are so readily apparent and so easily predicted. In developed nations they cost jobs and degrade living standards, health, welfare and life spans. In poor countries they perpetuate electricity deprivation, unsafe water, disease, squalid environmental conditions, inability to adapt to climate changes, and early death.
To inject these vital ethical considerations and counter climate cataclysm concerns, students at a number of colleges and universities have launched Collegians For A Constructive Tomorrow (CFACTcampus) chapters to promote free markets, less government intervention and regulation, and better lives for more people. Their motto is “scientific truth without the spin.”
The University of Minnesota chapter proclaims that “Western values of competition, progress, freedom and stewardship can and do offer the best hope for protecting not only the Earth and its wildlife, but even more importantly its people.” These sound science and “stewardship of creation” principles should guide discussions, debates and decisions on all campuses. So should accurate information about climate change.
Divestment activists often claim that climate science is settled. Far from it. The supposed connection between carbon dioxide and planetary temperature is far from proven. Indeed, contrary to alarmist forecasts and computer models, Earth’s temperature has not budged for 18 years, the United States has not been struck by a Category 3-5 hurricane for a record nine years, “extreme weather events” have not become more frequent or severe during the past 100 years, and other “crises” have not materialized.
Nevertheless, both NOAA and NASA, perpetual purveyors of scary climate headlines, have again used ground-based data to pronounce that 2014 was the hottest year on record. These temperature reports “are ridiculous,” say experts like Dr. Tim Ball, historical climatologist and former professor at the University of Winnipeg, Manitoba. The measurements are taken mostly in always warmer urban areas, the raw data have been “adjusted,” “homogenized” and manipulated, and the alleged year-to-year differences are measured in hundredths of a degree ‚Äì a mere fraction of their margin of error!
Moreover, it is impossible to get accurate average global temperatures based on ground stations, because the data do not exist, Dr. Ball notes. “There are virtually no data for 70% of Earth’s surface that is oceans, and practically no data for the 19% of land area that are mountains, 20% that are desert, 20% boreal forest, 20% grasslands, and 6% tropical rain forest.” So NASA “just invents data” for these areas.
Unfortunately, instead of facts, campus politics will likely drive divestment demands this weekend (February 13-14), when college students demonstrate, hold sit-ins and organize flash mobs for Global Divestment Day. In many ways, to quote Macbeth, it will be “a tale told by an idiot, full of sound and fury, signifying nothing.” But for many people, the consequences could be dire ‚Äì or even deadly.
Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org), author of Eco-Imperialism: Green power – Black death, and coauthor of Cracking Big Green: To save the world from the Save-the-Earth money machine.