Big oil a big mistake: a $50 billion kick-off to the carbon divest-invest movement
The real news is not that there’s been a recent downturn in oil prices, with some resulting stock shocks. It’s that the divestment movement is finally picking up steam.
News of the citizens arrested this winter on Burnaby Mountain for standing up for climate justice has spread around the world. The weeks of protests there were inspiring to progressives everywhere: a moving example of personal sacrifice and resistance to poorly-considered and dangerous decisions.
As they posed critical questions about our ”triple-E” future—our energy, environment and economy—the protestors on Burnaby Mountain were facing tremendously powerful forces. Namely, the fossil fuel industry and the provincial and federal governments that act on their behalf.
It’s an industry whose power comes not only from vast wealth and government support, but from sheer momentum. Oil and coal companies have over 150 years of experience in exploiting resources with little regard for the consequences for local people or the wider ecosystem— and for many people, that attitude seems like business as usual.
But business as usual isn’t good enough anymore. And in that sense, there is some good news for our triple-E future.
Rockefellers and others to drop $50 billion in carbon investments
The real news in the past few months is not that there’s been a recent downturn in oil prices, with some resulting stock shocks. It’s that over the past few years, a divestment movement has begun, not unlike the movement against apartheid that hit its peak in the mid-1980s. Seeing the volatile nature of oil as an investment and its impact on the planet, the smart money is dropping oil and carbon permanently, and backing a different future instead.
Members of the Divest-Invest group alone have committed to pull out more than $50-billion from fossil fuel investments. Among them are those whose history with oil extraction goes all the way back to the beginning, namely the heirs to the Rockefeller fortune (made largely from Standard Oil, now known as Exxon-Mobil). When the Rockefeller Brothers Fund recently announced it would remove fossil fuels from its $860-million (U.S.) investment portfolio, it wasn’t just a PR stunt. It was a smart long-term financial move.
Big funds like Rockefeller Brothers see what others have been trying to ignore: that fossil fuels are in decline for a host of economic, political and social reasons, as alternatives reach price parity, regulations increase and public subsidies shift.
That may not seem like a lot for an industry worth trillions of dollars– but it’s a sign of what’s coming. As was recently reported in Rolling Stone magazine, new announcements against fossil fuels are happening more and more frequently:
"In July, the World Bank, responding to pressure from climate activists, announced that it would largely stop financing coal-fired power plants. In December, the pro-tem leader of the California State Senate proposed legislation that would force the state's massive public retirement funds – with more than $400 billion in assets – to divest from coal. And in his January inaugural address, California Gov. Jerry Brown called for his state – already a leader in wind and solar – to get half of its electricity from renewables by 2030."
The end of oil and coal subsidies
Bank of England governor Mark Carney recently reiterated his warning that fossil fuel companies cannot continue on their current trajectory, if the world is to avoid catastrophic climate change, and called for investors to consider the long-term impacts of their decisions.