UBC economics prof: I am voting yes to divest fossil fuels
UBC economics professor David Green - university photo
Given the scope of the climate change problem, I believe that what is most needed is not to figure out how best to operate within the confines of our current bad equilibrium but how to solve the problem of the commons. Fortunately, this is not intractable.
The work of people like the Nobel-prize-winning economist Elinor Ostrom tells us that, in fact, villages and towns throughout time have solved the problem of the commons. If they hadn’t – if the problem were really intractable – then no town or village would have had common land and this problem would have a different name.
Solving the problem of the commons involves, first and foremost, the establishment of a social norm that has two components: 1) a common agreement on the nature and scope of the problem; 2) an acceptance by all involved that they should play their part, adopting the socially productive action.
Once that norm is adopted, the exact mechanism for enforcing socially productive actions is open to debate. It could be done by regulation, by pricing policies, by moral suasion, or by some combination. But first there has to be the political will to enact those policies and that rests on the establishment of the social norm.
In a village, a social norm that supports the social outcome would be initiated through the leadership of respected individuals. But when the village is the whole world, the individuals needed to lead will have to be of the size of institutions. UBC sees itself as a world leader in research and in policy debates. Divestment is a way we can take up the leadership mantle on an issue of paramount importance.
As I see it, we have two choices. The first is to continue with business as usual and count ourselves as blameless because we have played within the current set of rules.
The second is to question those rules; to step back and look for a way to change the rules; to change the social norm. This, to me, is part of the role of a university. If we don’t ask the big questions about what is really driving our problems and how to get society to change, who will?
By deciding to divest, UBC will take up the role of the respected leader helping to initiate change in the social norm. We will be telling our fellow citizens that we recognize the scope of the climate change problem and that we are willing to take our part in the actions that are needed to address it.
As a final point, divestment has been described by some as a moral decision. Without wanting to negate that opinion in any way, I see the arguments presented here as not inherently moral in nature. We face a problem of how to best use our collective resources – a large problem of the commons.
The solution to that problem doesn’t involve denoting some actions as good and some as bad, but it does require leadership in order to change social norms and open up options that currently seem to be infeasible. Institutions like UBC will need to lead if we want to make that change.
I will vote yes.
David Green is a professor in the Vancouver School of Economics at UBC and an International Fellow at the Institute for Fiscal Studies in London.