Former New York Mayor Michael Bloomberg launched an initiative in 2007 aimed at reducing the carbon footprint of New York City, entitled PlaNYC. The goal was to reduce carbon emissions by 30% by 2017. Fordham signed onto the initiative. On campus, there is a group Fossil Free Fordham which is seeking to aid in Fordham’s reduction of carbon emissions by divesting the University’s endowment from 200 publically traded companies which hold the majority of oil, coal, and natural gas reserves. Fordham is just one of dozens of colleges and universities with similar groups. They are all part of a larger movement by the Fossil Free Campaign, a subgroup of 350.org.
Divestment involves taking funds which are invested in a problem area and investing elsewhere. The hope is that financial pressures will lead to social or economic changes. Divestment campaigns have been successful in the past. In the late 80s and early 90s, there was a large push for divestment from South African companies, in protest of the country’s apartheid laws. South African divestment policies were ultimately successful in the efforts to help end the apartheid regime.
Global Climate Change and how we deal with it will be one of the issues which will define the next forty years. Many climatologists and environmental scientists agree that if current trends continue, dramatic changes to ecosystems, species loss, and changing weather patterns may be irreversible: “International climate negotiators agreed in the Copenhagen Accord, a global agreement on climate change that took place at the 2009 United Nations’ Climate Change Conference, that warming this century shouldn’t increase by more than 2 degrees Celsius (3.6 degrees Fahrenheit) to avoid the worst impacts of climate change.” The consequences of such changes will drastically impact the way humans live. Many areas, such as Manhattan, are predicted to be under water due to rising sea levels. Precipitation levels will change, resulting in more droughts in some areas and more flooding in others.
All of this adds up to stress being placed on global economies. “Climate change could cost between 5 and 20 percent of the annual global gross domestic product.” Many animals, such as varying fish species, which different national and local economies rely on, are facing the possibility of extinction. An increase in severe storms is predicted, which will result in expensive damages to infrastructure. The fluctuations in weather patterns will affect commercial agriculture. Short-term economic gains from fossil fuel do not outweigh the long-term harm to both the Earth and the economy.
The list of economic effects of climate change goes on and on. Here is where divestment from fossil fuels comes in. The release of carbon from fossil fuels is one of the major anthropogenic factors in climate change. As such, targeting companies with large stakes in fossil fuels makes sense. Continuing to obtain fossil fuels will not be sustainable. “80% of the world’s proven fossil fuel reserves cannot be consumed without exceeding the international target to keep global warming to within 2°C above pre-industrial levels.” Though 200 companies which the Fossil Free movement is focusing on control large amounts of capital, the total value of the endowments of American universities is in the area of $400 billion; moving even a small percentage of these funds out of these companies will have a major impact.
The second part of this movement is to reallocate funds in companies involved with sustainability and renewable energy sources. Again, even a small percentage of college endowments going to such companies will have a large effect. Funding such companies will help progress towards making sustainable energy more efficient, cheap, and available to the masses. Moving towards sustainable energy will go a long way towards reducing the amount of carbon we produce. There are also economic gains for groups which divest from fossil fuel in favor of sustainability. Investing in “energy and energy efficiency stocks, will reduce risk and achieve positive financial benefits… analysis of the historical data found that, over the past seven years, eliminating the fossil fuel sector from a global benchmark index would actually have had a small positive return effect.”
As Fossil Free states on their website, divestment is not the ultimate solution to environmental issues. Economic pressure is not the only thing that will lead to significant changes to our energy usage. However, part of the movement is to generate discussions concerning the future of the Earth and how we will affect it. It is time that those in charge of Fordham’s endowment have this conversation.