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Two Important Errors in the Fossil Fuel Divestment Debate: A Response to Robert Stavins

Divestment Strategies

In October 2013, Robert Stavins, Director of the Harvard Environmental Economics Program, posted an analysis on the topic of fossil fuel divestment, concluding that divestment would be counterproductive to efforts to fight climate change. In his analysis, Stavins touched on a number of ideas germane to the divestment debate, including the value of symbolic action, the climate impacts of divestment, and the comparative advantage of universities.

Mr. Stavins’ analysis consists of a central package of arguments against the principle of divestment from fossil fuels as well as an auxiliary package of arguments regarding the potential impacts of divestment. It is instructive to consider both packages. However, the first package contains two important errors that are common to ongoing debates about divestment and climate change more broadly: the inaccurate dichotomy of symbolic vs. effective actions and the inaccurate distinction between moral issues and scientific, political, and economic issues.

Since Mr. Stavins posted his analysis, the fossil fuel divestment movement has grown to include commitments to divest from some or all coal, oil, and gas companies from universities including Stanford University, Australia National University, The University of Glasgow in Scotland, and Victoria University in New Zealand, as well as other groups including the World Council of Churches, the Rockefeller Brothers Fund, and various cities around the world. Along similar lines, Australia’s HESTA superfund has pledged not to make new investments in thermal coal. The divestment movement has received support from Christiana Figueres, Ban Ki Moon, Mary Robinson, and other prominent figures. This persistence and continued growth of the fossil fuel divestment movement has heightened the importance of understanding the two fundamental errors relied upon in Mr. Stavins’ analysis.

Stavins’ analysis begins by noting that divestment from fossil fuels is first and foremost a symbolic action, because the sums of money involved are not expected to be great enough to threaten in a direct way the targeted fossil fuel companies. He notes that symbolic actions have opportunity costs associated with them and argues that they can be warranted nonetheless as part of moral crusades.

Is climate change a moral crusade? Mr. Stavins argues that climate change is fundamentally a scientific, economic, and political challenge, and that viewing climate change as a moral crusade may increase the political polarization surrounding the topic.

Does this package of arguments hold water? Most participants in the divestment debate agree that divestment from fossil fuel companies is a symbolic action. However, the potential short- and long-term impacts of that symbolic action are not often articulated. Historically and contemporarily, we observe that symbolic actions can be extremely effective at generating political, economic, social, and cultural change, which can ultimately impact decisions about science, technology, diplomacy, economic policy, and so on. The examples are ubiquitous, and some are prominent. One prominent example from recent history is the self-immolation of Mohamed Bouazizi in Tunisia in 2011, which sparked the Tunisian revolution and ultimately the broader Arab Spring movement. Bouazizi’s action was symbolic: it did not harm the Tunisian government directly; rather, it generated subsequent actions that ultimately did lead to the Tunisian government’s overthrow.

Thus, the dichotomy used by Stavins – the symbolic action vs. the effective action – is not accurate and is misleading. In reality, effective symbolic actions and ineffective symbolic actions both exist. Indeed, one measure of the effectiveness of a symbolic action is the degree to which it generates subsequent actions and the nature of those subsequent actions, both in the short term and long term. The claim that “symbolic” is synonymous with “ineffective” is not well-informed; it ignores the lessons of history as well as those of the contemporary world.

Of course, symbolic actions have opportunity costs, just as all actions do – symbolic or otherwise. Sometimes the opportunity costs are very high, as in Mr. Bouazizi’s case. Opportunity costs in the form of sacrifice often increase the ultimate effectiveness of symbolic actions, because visible sacrifices can spur others to take action and can ultimately cause broader society to focus its attention on a problem. This does not mean that opportunity costs should be ignored. Rather, opportunity costs should be weighed for symbolic actions just as for any other action.

Mr. Stavins claims that symbolic actions are warranted as parts of moral “crusades”. Yet symbolic actions can have be powerfully effective in realms of politics, law, economic policy, and other realms of human social organization. Furthermore, many if not all scientific, political, and economic challenges also carry moral implications, which can at times be deeply serious. Thus, Stavins’ distinction between moral “crusades” and scientific, political, and economic challenges is also inaccurate and misleading.

Should climate change be viewed as a moral crusade? It would certainly qualify as a moral issue according to most ethical systems of the world, given climate change’s impacts on mortality, morbidity, and security, as well as the distribution of those impacts, which fall heavily on non-responsible parties in the future and on the global poor and insecure. The non-reversibility and potential severity of climate change impacts also adds to its moral gravity. Furthermore, there are practical reasons for societies to view climate change as a moral issue, as it is both a long-horizon problem and a global commons problem, both of which are difficult for cost-benefit-based economic or political analyses to act upon. Additionally, societal understanding of climate change as a moral issue allows for democratic political engagement at a mass scale, which is probably necessary in order to sustain policies in the US and other democracies to mitigate climate change.

Mr. Stavins’ final argument is that even if climate change is a moral issue, it should not be viewed as such, as this could increase political polarization around the issue. His argument implies that if the real moral dimensions of climate change are hidden from people, then governments will make faster, not slower, progress in mitigating emissions. It is not clear why this would be the case, and Stavins offers no line of reasoning to support his argument.

The political deadlock on climate in the US is currently dependent upon the political feasibility of denying the problem outright. Contrary to Stavins’ claim, it seems plausible that societal understanding of the moral reality of climate change in terms of its effects on human mortality, morbidity, and insecurity would make dodging the issue not more but less politically feasible for lawmakers and other decision-makers. The idea that moral apathy will help to neutralize the political feasibility of denying the problem seems hard to believe.

Stavins’ central package of arguments against the principle of divestment is useful because it contains two important errors that are common in debates about divestment and climate change more broadly: the inaccurate dichotomy of symbolic vs. effective actions and the inaccurate distinction between moral issues and scientific, political, and economic issues. As the divestment movement grows and as we mobilize societies to mitigate climate change over this century, avoiding these errors may serve us well.

Photo Credit: Fossil Fuel Divestment Debate/shutterstock

Content Discussion

Hops Gegangen's picture
Hops Gegangen on November 11, 2014


I don’t see a clear division between companies that are good and companies that are bad. Do we also demonize companies that use fossil fuels? Coal burning utilties? Truck manufacturers? Catapillar for making coal-mining machines? U.S. Steel for CO2 emissions? Apple for flying crates of iPhones from China? It’s all one big fossil-fuel dependent economy. We just need a carbon tax, so everyone pays for their “sins”.

Bob Bingham's picture
Bob Bingham on November 12, 2014

Coal is dirty pollutong fuel that is only cheap if it vents its pollution to the atmosphere for free. As its true costs are being calculated it is becoming obvious that renewables are much cheaper and cleaner. It would therefore be a smart move to sell shares before they collaps completetl. Oil has a longer life but the cheap stuff has gone and production costs are soaring so the oil companies are not so protiable. Also there is a limit to what people will pay for oil. They are noy likely to be a good investment for the mid term. I would get out now while there is some life in the market.