UBC economics prof: I am voting yes to divest fossil fuels
This Sunday will be the last day of a two-week UBC professor vote, that if passed, would urge the university leadership to divest the university's fossil fuel stocks from its $1.1-billion endowment. A recent study found the campus has the largest university holdings of petro-stocks in Canada.
Here, UBC economics professor David Green urges his colleagues to vote for the climate change action. The "divest" movement is now taking dozens of Canadian universities by storm.
I will vote yes in the UBC divestment referendum. I wanted to respond to some of the last-minute arguments of those on the 'no' side while setting out my own reasons for voting yes.
The problem we all face with climate change is often framed as an example of “the tragedy of the commons.” The core idea for that concept is found in the example of a common green pasture on which everyone in a village has the right to graze their livestock.
As with any renewable resource, there is an optimal level of use of the pasture that insures the maximum current output commensurate with it also being available for use on an ongoing basis. Grazing cattle or sheep beyond that level will ultimately turn the field into mud.
The tragedy of the commons is that if individuals act only according to their own self-interest in grazing their cattle on the common land, they don’t take account of their effect on others – their marginal effect in degrading the resource.
The result is over-use and mud. Moreover, if some people reduce their use in the hope of preserving the commons, other “free-riders” will simply increase their use to take up the slack and mud will still result.
One of the main arguments that has been raised against Divestment is actually an exact expression of this last part of the tragedy of the commons: if we don’t invest, someone else will and there will be no effect on the rate of return of carbon stocks.
In the end, the field will still have turned to mud and the free-rider will have done particularly well out of it all. We will have done the effective equivalent of spitting nobly into the ocean.
'No' side worried about losing oil & gas dollars
At the Faculty Association meeting on the Divestment vote, proponents of a no vote argued that if UBC were to Divest then oil and gas companies would turn their backs on UBC researchers. The research dollars those companies want to spend would be spent elsewhere - presumably by less effective researchers or people less committed to the environment.
Put aside that this starts to sound vaguely unethical – that it implies that we should change our behaviour based on the money that companies dangle in front of us. Quite apart from that, this is exactly the reasonin that reinforces the tragedy of the commons. If we don’t graze our sheep then someone else will – someone less pure of heart — and the field will still turn to mud.
It is this reasoning that reinforces the terrible equilibrium in which we find ourselves.
Of course, UBC divesting will not in itself solve climate change or even alter the stock prices of fossil fuel companies. Because this is a problem of the commons, we won’t have a direct effect of this kind virtually by definition. But this does not mean we should simply give up.