Is it immoral for religious groups to invest in fossil fuel companies? Is there a moral imperative for these groups to invest in a clean energy future? In a word – yes. This paper will explain why.
Ever since Bill McKibben’s July 2012 Rolling Stone article, divestment campaigns have sprung up at hundreds of colleges nationwide. Leaders ina growing number of religious settings are considering divesting and, to a lesser degree, reinvesting in a clean energy future. Given the massive impacts of the climate crisis and the fundamental significance of energy for humanity, this is an important debate. After reviewing initial reactions to divestment, we will assess the current context of the climate crisis and traditional religious criteria for divesting, and argue that fossil fuel divestment and re-investment in energy efficiency and renewable energy represent a moral imperative. We’ll also suggest three principles which religious groups can use to decide whether a fossil fuel company represents an acceptable investment, and close with a call to action.
Initial Reactions
For some, divestment has been galvanizing. For others, “divestment fatigue” is the response. In recent years, many religious groups have debated divesting from companies working in Sudan. The Presbyterian Church’s Israel divestment debate created bitter controversy.
For some, another divestment campaign is just too much. Some feel that activists now use divestment, traditionally an action of last resort, too often. Others oppose divestment. Shareholder advocates argue that it decreases the impact religious groups have on industry by eliminating the chance to engage management. Investment managers worry about lower returns and greater risk for their clients. They note the challenge that divesting poses when portfolios contain shares of hundreds of companies and when fossil fuel companies make up approximately 10% of the global stock market.
Still others argue that divestment is the wrong tactic in the fight against climate change, citing government policy, not corporations, as the proper target and noting that fossil fuel companies also invest in renewable energy projects. Others suggest that fossil fuel companies are too big to be hurt by divestment, while others argue that shareholders can’t accept moral consequences related to their shares because they are too distant from the actual activities of the company to be responsible.
These types of questions are always raised during divestment debates. They represent the suspicion and fear that divestment and reinvestment raise - fear about financial vulnerability and suspicion of divestment’s critique of the status quo. We are all inescapably dependent on, and beneficiaries of the fossil fuel industry. Assigning a blunt label of immorality to such a large sector of the economy is perplexing and simplistic, incomprehensible and threatening at once. Such conflicting feelings are the emotional context for divestment and reinvestment, a threshold all cross when entering this debate.
The Current Context
Debates about the ethical investment of religious funds always happen within a specific context. Our situation is no different. Four aspects of our current context are most relevant:
• Risk - accelerating global greenhouse gas emissions, political systems unable to respond • Need - the moral imperative of the developing world’s growing need for clean energy
• Opportunity - the potential to scale up a “virtuous cycle” in response to climate change
• Narrative Free-fall - the lack of a master, shared narrative for solving the climate crisis Risk: Accelerating Emissions, Unresponsive Political Systems The world’s greenhouse gas emissions are continuing to rise, rapidly. In the wake of a multi-year economic recession that slowed economic growth globally, the International Energy Agency reports that actual emissions are at the high end of previously predicted levels.
Conditions are worsening faster than anticipated. There is a growing scientific consensus that, given the absence of meaningful, rapid progress to slow emissions, Earth’s climate will warm by at lea st three degrees Centigrade, if not more. The implications of this are severe. Such a rise will likely result in sea level rise of two to three feet by 2100 and up to 10 feet by 2300, hundreds of millions of climate refugees, and a large increase in fires in the Amazon rainforest, responsible for 10% of the entire world’s oxygen supply. Increasing areas of the planet would see their rainfall drop by up to 50% and be “rendered essentially uninhabitable by drought and heat.” Hurricanes will continue to increase in frequency and intensity. As the Himalayan ice sheet melts, 2 billion people across Asia will increasingly lose access to water for drinking and farming. The UK Government’s Stern Report concluded that a two to three degree temperature in crease “could leave one-sixth of the world's population facing floods or droughts and reduce crop production in Africa enough to put several hundred million people at risk of starvation.”
The human community has never faced such certain an d devastating consequences if action is not taken. Apart from nuclear war, climate change dwarfs all previous threats to humanity in its scope and extent. The magnitude of the threat in itself represents a powerful argument in favor of divestment, an act which inherently signals the need for far-reaching change.
Yet in the face of this hard data, a critical mass of society’s leadership has not yet seen fit to force a large-scale legislative, economic and cultural response to the climate crisis. This failure by political and economic elites is as great a problem as the rising emissions themselves. The longer we wait to address climate change, the worse its impacts will be. Conversely, the sooner we face the crisis, the sooner we can exercise our ingenuity, learn from experience, and manage a major energy transition. This long-delayed response represents another indication that nonviolent, disruptive action like divestment is necessary. What else will wake us up? Need: The Clean-Energy Poverty of Developing Nations A second aspect of our current context is the developing world’s need for more, cleaner energy – lots more. For the first time in modern history, e scape from dire poverty in the developing world is becoming possible, due in significant part to electricity. For the extremely poor, energy is life- saving. As energy becomes more available, infant mortality drops. Life expectancy rises.
As billions of people emerge from crippling poverty, t hey need more energy. Religious groups, which have fought poverty in developing countries for centuries, should understand this well. Developing countries also need cleaner energy. Indoor air pollution is one of the largest causes of death in the developing world, due to the use of dirty fuels in the cook stoves of poor households, coal plants which create large public health impacts, and engines that burn dirtier fuel and generate lung-damaging emissions.
So, we need a world with much more energy than we currently have. A no-growth energy strategy is neither possible nor acceptable for the billions afflicted by hunger, material deprivation, and energy poverty. Opportunity: Ready for Scale A third element of our context is that a growing number of technologies, policy tools and social science-based approaches to reducing greenhouse gas emissions are poised to grow to a far larger scale with even modest and reliable legislative and regulatory support. The US Energy Information Administration reports that renewable energy will make up nearly a third of all new electricity generation capacity in the US in the co ming three years.
The wind power industry has grown at a rate of 25% annually during the past five years, and the solar industry by a 50% annual rate.
While much of the clean energy sector still relie s on government subsidies, the International Energy Agency writes that renewable e nergy “(c)osts have been decreasing and a portfolio of renewable energy technologies is becom ing cost-competitive in an increasingly broad range of circumstances.”
Two of Forbes’ Top 5 Energy Stories of 2012 were focused on energy efficiency and renewables. And, the worl d’s governments spend approximately $2 billion per day to subsidize fossil fuel use, 16 more than six times the subsidies enjoyed by the renewable sector.
It’s long been recognized that shifting these subsidies would greatly accelerate the rise of a clean energy future. This isn’t to suggest that a single silver technology or policy bullet exists to fix climate change, or that such changes will be politically easy. Nor is it to suggest that the growth in renewables yet approaches the rate needed to stop climate chan ge’s worst effects. But we do have real opportunities to accelerate our rate and scale of response. The quicker we get to work, the sooner we’ll climb the learning curve and reap benefits of experience and economies of scale. Narrative Free-fall: A “Dark Interval” From the late 1980’s through 2010, a unified narrative framed our understanding of how the climate crisis would be solved.
Education and grassroots organizing would raise awareness, which would lead to legislation, regulation and financial incentives to address climate change at the domestic level. The commitment of the US to bold domestic action would then lead to an enforceable international climate change agreement. It didn’t quite work out that way. We can be proud that an enormous amount of good education and advocacy has been accomplished, consistent with this narrative. Significant progress has been made. High-quality educational efforts took place nationally.
Well-crafted legislation made its way through a then-friendly House in 2009. Success appeared to be within reach. But the opposition to change proved both culturally and politically powerful. The Tea Party movement rose to become a powerful force in America n life. The aforementioned narrative was shattered by the Congressional failure to pass climate legislation in 2009-10. Given the present makeup of the House of Representatives, there is almost no chance that meaningful US climate legislation can be passed in the coming several years.
This means that we are marching into the teeth of t he climate change gale with no narrative that maps a viable path to a future with a stable climate, or even to a future in which the crisis’s worst effects are avoided. To repeat - we are proceeding towards tremendous and certain danger
Major Energy Company Investment – Under What Conditions?
Energy is a blessing from which all have benefited. This differentiates fossil fuel divestment from, for example, divestment from tobacco, an industry which creates minimal counterbalancing benefits in relation to its massive harm. Because of this, it is reasonable to establish conditions under which investing in major energy companies is morally acceptable for religious groups.
Currently, the world’s largest energy companies are fossil fuel companies. As the world moves to a clean energy future, some of these companies w ill become clean energy leaders. If fossil fuel companies commit to making this transformation , they should remain a legitimate investment. To earn this status, major energy companies should make three commitments.
Commitment #1: Repudiate denial
The fossil fuel industry has long sought to sow doubt about climate change, to deny sound science, and to advertise only the benefits created by fossil fuels. To remain a legitimate investment for religious groups, fossil fuel companies should repudiate scientifically disreputable climate skepticism, and commit to “truth in advertising” by cutting off funding for skeptic organizations. Further, they should agree to use peer-reviewed, widely respected scientific research in their own research, business risk assessment, communications and lobbying, such as research published under the auspices of the Intergovernmental Panel on Climate Change.
Finally, all fossil fuel industry advertising should contain a warning that fossil fuel use causes climate change. For too long, industry has been able to operate with little to no acknowledgment of the crisis its products create. This needs to stop.
Commitment #2: Become part of the solution
Fossil fuel companies should commit to reduce the greenhouse gas emissions from their products and operations 80% below 2000 levels by 2050, a widely accepted target which would prevent the earth’s temperature from rising by more than two degrees centigrade.
Companies should set interim targets and timelines and report publicly on their progress. Their reports should be third-party verified.
Commitment #3: Make restitution
In response to the harm caused by climate change, fossil fuel companies should make restitution. Perhaps they might commit 1% of their gross annual revenue for a period of several decades to help the most vulnerable countries and communities adapt to a hotter, less stable world. These funds could be administered through governmental, NGO or hybrid structures, with full transparency. Restitution represents a way for the se firms, which have profited from nature’s bounty and society’s trust and subsidy, to make up for their profit at others’ expense. It is a fundamental, necessary commitment.
Divestment and Sacrifice Some divestment supporters have argued that investment managers will be able to design fossil fuel-free portfolios without sacrificing returns, o ften citing a recent study that found that such an approach, over the past 25 years, would have performed as well as the broader market. 32
We aren’t qualified to assess these claims. But we think it’s wrong to represent divestment as an approach that does not involve sacrifice and risk. Whether through potentially lower returns, greater portfolio volatility or the use of the valuable time of religious leaders and their advisers, fossil fuel divestment requires an investment of re sources – human or financial, or both – for institutions which are usually stretched to their current limit. Religious advocates for divestment shouldn’t deny the sacrifice or risk involved, or rationalize it away. In reality, it’s the fact that divestment requires a sacrifice that gives it moral significance. Even if that sacrifice is limited to taking on an additional perceived risk. In regards to the unmatched danger of climate change, religious groups need to sacrifice a measure of their own security for the sake of the world.
Divest and Reinvest. Now. If Not, Then What? Clearly, we support a course of divestment and rein vestment by religious groups. And, as noted earlier, divestment and reinvestment have their critics.
Shareholder advocates, who seek to influence the behavior of the fossil fuel giants, have advocated for continued engagement with the fossil fuel industry. They have done, and will continue to do important work.
Many who manage religious funds have argued that divestment has, in the past, shown mixed results, and has at times failed to influence corporate behavior while increasing the risk profile of religious investment portfolios. Their counsel is reasonable. If nothing else, divestment creates additional work and headaches for leaders at many levels of religious institutions.
But there comes a time when a pattern of recklessly dangerous behavior reaches a critical point. The climate crisis represents such a point. The data could not be clearer about the titanic magnitude of the danger posed by climate change. T o date, society’s refusal to address this issue reflects an avoidance of a fundamental human responsibility. Our current path represents a cataclysmic mistake.
We have reached a time when new action is required. Action beyond legislative advocacy and shareholder advocacy. Action that reflects the gravity of the situation and the legitimate desperation of our “dark interval.” Action based o n the belief that integrity requires us to act firmly, sacrificing a measure of our own security o n behalf of the future of our children and the planet. Action that firmly rejects the status quo and equally firmly embraces a future for life.
Fossil fuel divestment and reinvestment in a clean energy future are a moral, religious responsibility. Religious groups must engage this debate with a fierce loyalty to God and God’s compassionate, just love for humanity and all creation. For those who agree – it is time to act. And for those who disagree but who claim to be concerned about climate change, we have one question.
If not divestment and reinvestment, then what?
Discussion Questions
1. A significant part of the essay’s foundation is that divestment and reinvestment are warranted because of the grave magnitude of the climate crisis. Do you agree that climate change poses a grave threat to human and environmental well-being? If no, why not? If yes, why do you think US society has been slow to respond?
2. The essay argues that religious groups have traditionally divested for three reasons: in response to grave harm or its threat, in response t o a morally and politically intractable industry, and in the hope that religious witness will influence society. Do you believe that these reasons are the proper criteria for religious groups to use in their decision-making about divestment? If yes, why? If not, why not?
3. Why is it important for religious institutions to discuss fossil fuel divestment and clean energy reinvestment? What can conversations and discussions within religious institutions offer to the wider society?
4. The essay offers several criteria which a fossil fuel company could meet in order to remain a morally acceptable investment. What is your opinion of these criteria? What criteria would you add, or subtract? Why?
5. What teachings from within your own religious tradition are most relevant to the discussion about fossil fuel divestment and clean energy reinvestment? How would you make the case in support of such an approach in the language and concepts of your own tradition?
Source: GreenFaith
_________________________________________
Please click here and here, to see why the Stewardship of the Environment Committee is advancing a motion advocating for fossil fuel divestment in the Anglican Diocese of Montreal.
Related
A Role Call of Faith Groups Divesting from Fossil Fuels
Report on Faith Based Divestment from Fossil Fuels
Faith Communities Divest Holdings in Fossil Fuel Industry
Why Faith Communities Must Divest from Fossil Fuels
Church of England Adopts New Climate Change and Ethical Investment Policy that Includes Divestment
Episcopal Church Votes to Divest from Fossil Fuels as a Moral Issue
United Church of Canada Votes to Divest from Fossil Fuels
WCC at International Divestment Conference in Paris
Divestment and Reinvestment Resource: Fossil Free Faith
No comments:
Post a Comment