The case for fossil fuel divestment over engagement
Can we shift oil and gas companies’ behavior through engagement or is it time for a new approach?
MIT Divest, a new movement on campus, is calling on MIT to take leadership in addressing the climate crisis by divesting from fossil fuel companies, detailing in an article two weeks ago why divestment should be the path forward.
Opponents of divestment have argued that through shareholder engagement and discussion, fossil fuel companies can be reasoned into taking meaningful steps toward addressing the climate crisis — steps that divestment would jeopardize.
While this is the image that many corporations such as Chevron and ExxonMobil wish to portray, the extent of their apathy towards the climate crisis is often hidden from the public. We cannot hope to work with companies that fight the term “climate change” tooth and nail, using tools such as climate disinformation and anti-climate lobbying to advance one terrifying goal — to continue extracting and burning fossil fuels, at increasing rates, for financial gain.
Climate change may have become a leading political issue in the last decade, but it has been discussed since the mid 1900s, and research by none other than ExxonMobil has been done on the topic as early as 1978.
The verdict of that study?
In that 1978 report, Exxon’s Senior Scientist James Black stated that “present thinking holds that man has a time window of five to 10 years before the need for hard decisions regarding changes in energy strategies might become critical.” Exxon knew about man-made climate effects before it was widely discussed by the scientific community. And they acted on it — not by being a leader in the fight against climate change but by covering up the urgent need to take initiative on this issue.
This study launched an industry-wide attack on climate change advocates. Think tanks and groups with innocuous names such as Global Climate Coalition and National Coal Association, Information Council for the Environment (ICE), Western States Petroleum Association (WSPA) and the American Petroleum Institute (API) popped up. These groups have been part of numerous disinformation campaigns since their inception, organizing fake climate conferences, leading anti-climate lobbying on the Hill, and sowing doubt about the reality of the climate crisis. WSPA, for example, has on multiple occasions created “astroturf” — or fake grassroots — groups, in order to influence legislation for emission caps. ICE is famous for its extensive advertising campaigns, with slogans like, “Who told you the earth is warming… Chicken Little?” and, “Some say the earth is warming. Some also said the earth was flat.”
API’s mission, as laid out in 1998, declares that victory will not be achieved “unless climate change becomes a non-issue, meaning that the Kyoto Protocol is defeated and there are no further initiatives to thwart climate change.” Between 2000–2016 alone, the fossil fuel giants spent $2 billion funding anti-climate lobbying, funneled primarily during congressional sessions when important emissions-limiting bills reached the House Floor. While these companies may not be acting on the research when it comes to climate change, climate disinformation and lobbying has become a precise and deadly science.
When Googling something as simple as “Fossil Fuel Divestment Facts,” the first link to come up is not from a climate activist group, but rather from the American Petroleum Institute, giving various arguments against this financial mechanism, many of which have been vehemently argued against by economists. This goes to show how much money and effort fossil fuel companies have invested in controlling the dialogue around divestment and misdirecting those interested in learning about it.
Some have argued that the investments that fossil fuel companies have made in renewable energy research demonstrate that they can be fruitfully engaged in efforts to fight climate change and that divestment would be counterproductive. It is true that some fossil fuel companies have funded renewable energy. For example, Total SA has started increasing investments into electric vehicle companies and owns 66 percent of SunPower, one of the three largest solar providers. However, contributions like these are still a drop in the bucket compared to the value of investments going towards more efficient fossil fuel recovery and burning. Companies spend between zero to 4.3 percent of their total capital expenditure on renewable energy. Combined, the 24 largest oil and gas majors spend 1.3 percent of their total $260 billion capital expenditure on low carbon technologies. Clearly, being part of the transition to renewable energy is not a priority for many of the fossil fuel giants.
We want the most effective solution to fighting this global threat. We want everyone to be involved in the clean energy transition. But why would we faithfully and trustingly work with those who are actively trying to deceive us about the nature of the climate crisis? Those who invest more time and capital into lying about the urgency of the issue than renewable R&D? It is naïve to think that we have the time to work from within these entrenched and uncompromising companies to alter an anti-climate framework that has been growing for decades.
So far, there is little evidence that by cultivating relationships with fossil fuel companies, MIT has been or will be able to significantly decrease the quantity of environmentally destructive fuels they extract. Globally, proven fossil fuel reserves would emit more than $2 trillion tons of carbon dioxide emissions, vastly exceeding the amount of carbon dioxide that can be released if global warming is to be limited to 2 degrees Celsius, much less the original 1.5 degrees Celsius target. Most of these reserves simply must stay in the ground if climate change is going to be limited to survivable levels, and yet fossil fuel companies are continuing to explore for more reserves all the time.
Given that these reserves represent trillions of dollars of potential revenue, it is hard to believe that fossil fuel companies would fund or otherwise support anything that actually limits their ability to extract and profit from their reserves. They must experience concrete impacts from public and institutional backlash against their reckless extractivism.
In its Climate Action Plan, MIT stated that it would use its name and brand to educate its industry partners on the importance of climate change. I am calling on the MIT administration to disclose to its community its active efforts to work with fossil fuel companies to combat climate change. Give us clear and meaningful benchmarks and metrics used to quantify success, as the administration has previously promised and never delivered on.
Has MIT’s engagement had a substantial impact on the practices of climate disinformation propagated by the oil and gas majors? If the engagement strategy has not succeeded in this regard, then MIT needs a new approach. It is time for these companies to be held accountable not by their shareholders, but by the people they are deceiving. It is time to join a global movement that sheds light on the moral wrongs we are witnessing and succeeds where engagement has failed.
It is time for divestment.
We claim to be an institute devoted to the pursuit of scientific truth for a better world. Let us continue this tradition by showing the world that we have lost trust in the fossil fuel industry and refuse to be complicit in their efforts to spread misinformation. Let us put an end to their lack of respect for science and everything that MIT stands for.
Darya Guettler is a member of the class of 2021 studying mechanical engineering and political science. She is also a member of MIT Divest.