â€œApathy is Deadlyâ€
Our planet could support many more people if each person consumed less. One of the largest problems caused by our consumption is greenhouse gas emissions from using fossil fuels.
The divestment movement aims to reduce our reliance on fossil fuels and to increase usage of renewable energy. It pressures institutional endowments to sell off investments in companies that produce fossil fuels.
Most colleges and universities have endowments. Gail (my wife) and I met at and graduated from Swarthmore College near Philadelphia; its endowment is over a billion dollars. It uses the interest from this money in excellent waysâ€”to provide student scholarships, increase salaries and to build new, efficient buildings. Unfortunately it wonâ€™t disclose how the endowment is invested.
Divestment (freeing endowments from investments in fossil fuel companies) makes sense for three reasons. The financial and environmental reasons are intertwined and one affects the other. Letâ€™s examine the financial reason firstâ€”the value of oil and coal stocks is declining so it doesnâ€™t make sense to invest in them. The current low price of petroleum is a short-term cause for this decline. Another reason for their loss of value is that society is finally recognizing the â€œexternalitiesâ€â€”costs of fossil fuels that are not included in the price of these commodities.
An example of an externality is the mercury that coal fired power plants have pumped into the air for years. This poisonous metal is a trace pollutant of coal. When coal is burned, mercury settles into streams and contaminates the fish we eat. Mercury is especially toxic to pregnant women and young children. Paradoxically, fish is â€œbrain foodâ€ that would otherwise be good during pregnancy and for youngsters. The price of the electricity we buy from power plants does not pay for the harm done by the mercury they emitâ€”that harm is an externality. If all the externalities were accounted for, the cost of electricity generated by coal should be twice or even triple the price that we actually pay for it.
In order to protect our health, the Environmental Protection Agency is increasing regulation of ozone and carbon dioxide as well as those of mercury emissions. Ozone causes serious respiratory problems and premature deaths, and the CO2Â emissions, of course, are changing our climate. The recent disastrous oil spill and subsequent fire in West Virginia illustrates additional problems with the transport and use of fossil fuels.
The esthetics of energy development are also problematic. Mountaintop removal is hideous. Having a pumpjack in your yard is ugly and noisy.
The value of traditional carbon-based investments is diminishing as society recognizes how problematic they are. It is possible that they will become worth next to nothingâ€”â€œstranded assetsâ€â€”as regulation of the industries increases and as more and more people realize the harm they are causing. These are reasons many colleges and universities have already divested.
Investments in renewable sources of energy, on the other hand, are improving. The cost of photovoltaic panels that convert sunlight into electricity has dropped significantly over the past years, bringing solar generation into parity with generation by coal in some cases. As the price drops, it is expected that more and more people will be able to afford to generate their own â€œjuiceâ€. The cost of wind-generated power is also dropping. I expect investments in these technologies to do well in the future.
The two reasons for divestment already mentionedâ€”financial and environmentalâ€”are closely connected in our capitalistic society. The third reason may not be intuitive, but for me is the strongest motivationâ€”young people are sparking the divestment movement. A group of students at Swarthmore College recognize the destruction caused by mountain top removal for coal in Appalachia. They are propelled by the injustice of rich people in remote cities who use the labor of poor people in the â€œhollersâ€ to destroy their own future livelihood. These students advocate keeping coal and oil in the ground to avert a climate disaster that might otherwise imperil the future, including my granddaughters.
My generation has innocently benefitted from using fossil fuels. We have had an inconvenient awakening that our use of petroleum, coal and gas has changed our world.Â Although we will not see most of the repercussions of these changes, our progeny will. We owe it to our grandchildren to do what we can to mitigate these alterations. One small but significant step is to divest from personal investments in fossil fuels, and to demand that endowments to which we contribute also divest.
Â© Richard Grossman MD, 2015