The divestment debate: Should we profit from climate-killing corporations?

Investors have long made money -- lots of money -- from corporations that exploit or trade in polluting fossil fuels.  As climate change worsens, calls to halt such investments have grown.  Here, Australian conservationist Wayne Branden outlines the case for divesting from corporations that profit while the planet burns:

“If it’s wrong to wreck the climate, then it’s wrong to profit from that wreckage.”  - Bill McKibben

An Urgent Task Ahead

In an effort to combat harmful climate change, 195 nations have agreed to limit average global temperature increases to no more than 2°C above pre-industrial levels. 

This amount of warming could still possibly cause the Greenland ice sheet to melt, eventually raising sea levels by as much as seven meters.  Beyond that, it is estimated, things would get a lot worse.        

To have just a 50:50 chance of staying within the two-degree limit, it has been estimated that 88 percent of global coal reserves, 52 percent of gas reserves, and 35 percent of oil reserves must be left in the ground.  They must not be burned.  If they are burned, the analyses suggest, it will wreck our climate

And if these fossil fuels cannot be burned, then they will become stranded economic assets. 

Therein lays a serious conundrum -- because we are talking about really serious money.  Recently, Citigroup analysts suggested that stranded assets relating to fossil fuels could total up to US$100 trillion in value. 

Mining corporations don't want to hear any such nonsense.  The corporations intend to continue extracting all economically viable hydrocarbon deposits, regardless of their impact on the climate.  They have already discovered five times more hydrocarbons than can be safely burned without wrecking our climate.  And these corporations continue to spend hundreds of billions of dollars a year -- exploring for more fossil fuels that must not be burned.

Big money, big power

The mining industry wields considerable political power -- notably in Australia and the U.S. -- but also in many other nations. 

Those who oppose big mining do so at their peril.  In Australia in 2010, then-Prime Minister Kevin Rudd proposed a Resources Super Profit Tax on the mining industry -- which at the time was raking in massive profits. 

The miners ran an A$22 million public-relations campaign against the Rudd Government.  In just six weeks, Rudd was out, and the campaign had effectively un-seated a democratically elected Prime Minister

To prevent real action on climate change, corporations fund pseudo-science denialist groups.  They also hire public-relations advisers and lobbyists, and they donate to politicians’ election campaigns.  In this way, they have been able to strongly influence government policy and legislation.  

Do the Right Thing

In the fight against apartheid in South Africa during the 1980s, international divestment and economic embargoes helped to starve that regime of funds and legitimacy.  Divestment became a powerful tool in the battle to do what was right.

Divestment can also reduce the legitimacy of the big carbon-polluting corporations.  The global campaign to divest from fossil fuel industries has been led by an organization known as "350.org".  Founded by Bill McKibben, it derives its name from the level of atmospheric carbon dioxide considered to be safe, 350 ppm. 

More recently, The Guardian newspaper has teamed with 350.org to run its own “Keep it in the Ground” campaign -- an effort to advance the divestment initiative.

Divestment can be undertaken at both personal and institutional levels.  Massive amounts of money are held in personal bank accounts and retirement funds.  In Australia, for example, all of the biggest banks are major investors in coal, oil, and gas projects. 

In Australia, banks are being pressured not to invest in a massive coal-mining project that would double Australia’s coal exports.  Environmental groups have successfully lobbied 12 major international banks not to fund this project.  Recently, Australia’s Commonwealth Bank also withdrew its support -- partly because of environmental pressures and partly because of declining coal prices.

Retirement funds are also invested heavily in fossil fuels.  Globally, around 55 percent of retirement funds are invested in fossil fuel projects, while less than two percent is invested in energy efficiency and renewable energy.  Some larger funds offer low fossil fuel-investment streams, and some smaller funds do not invest in fossil fuels at all.

Interest in fossil fuel divestment is growing, with more and more institutions pledging either partial or full divestment.  These include the Rockefeller Brothers Fund, the Norwegian Sovereign Wealth Fund, the World Council of Churches, the British Medical Association, and the Guardian Media Group.  This is just a sampling -- a full list can be seen here.

Universities Are Getting Smart Too

A growing number of universities -- from the U.S., UK, Australia, New Zealand, and elsewhere -- have also pledged to divest either partially or fully.  But they're catching plenty of heat.

In Australia -- where coal mining is king -- Australian National University dared to adopt a partial divestment policy in October 2014.  The Australian Financial Review subsequently ran 53 articles attacking ANU, twelve of them on its front page. 

The newspaper is owned by Fairfax Media, which includes among its shareholders Gina Rinehart, a mining billionaire. 

Such vigorous attacks suggest the mining industry sees divestment as a significant threat to their political power base.

Running Scared

By itself, divestment might not strongly affect the share prices of wealthy mining corporations.  But its effects could be potent nonetheless. 

It could weaken the moral license of big polluters, reducing their political power.  By stigmatizing the industry, it can limit its ability to do business and exert political influence.  It then becomes easier to convince governments to start doing better in terms of their policies and legislation. 

The divestment wave is growing.  And as it grows, more and more people will realize that coal, oil, and gas are bad investments.  Not just a bad and weakening source of profits, but a morally bad choice for our planet, our children, and our future.

Roads to ruin: The devastating impacts of the global infrastructure explosion

From an environmental perspective, we may be living in the most frightening times since a giant meteor wiped out the dinosaurs and many other species some 65 million years ago.

New roads everywhere you look...   (photo (c) Rhett Butler, Mongabay.com)

New roads everywhere you look...  (photo (c) Rhett Butler, Mongabay.com)

But rather than extraterrestrial devastation, today's tsunami of change is entirely of our own making.  And perhaps no change is of greater importance than the astonishingly rapid explosion of roads and other infrastructure globally. 

As ALERT director Bill Laurance highlights in two hard-hitting editorials this week -- one in the International New York Times and another in New Scientist -- the pace and magnitude of change is truly unprecedented.

For example, in the next few decades, we can expect to see some 25 million kilometers of new paved roads, some 3,700 additional hydroelectric dams, and tens of thousands of new mining and fossil-fuel projects.

In just the next 15 years, investments in new infrastructure projects could approach 70 trillion US dollars -- more than doubling infrastructure investments globally.

Many of these projects will penetrate into the world's last surviving wilderness areas, opening them up like a flayed fish.  Since 2000, for instance, the Congo Basin has been crisscrossed by over 50,000 kilometers of new logging roads.  This has opened up the Basin to poachers armed with rifles and cable snares, who in turn have killed off two-thirds of the global population of forest elephants.

We urge you to read the two brief editorials above, and share them with your friends and colleagues.  There is still time to avoid a global calamity -- but only if we act with a true sense of urgency.

ALERT scientists tell G20 leaders to stop the 'infrastructure insanity'!

This has been a big week for ALERT. 

In the Amazon, 95% of all deforestation occurs within 5 kilometers of a road  (Google Earth).

In the Amazon, 95% of all deforestation occurs within 5 kilometers of a road (Google Earth).

On March 5, the top-ranked journal Current Biology published a hard-hitting paper -- led by ALERT director Bill Laurance and including ALERT member Tom Lovejoy, former environmental advisor to three U.S. presidents -- that the G20's plan for infrastructure expansion bordered on ecological insanity.

In case you haven't been following this story, during its meeting late last year in Australia, the G20 leaders -- who lead the world's 20 biggest economies -- pledged to invest $60-70 trillion US dollars globally in new roads, hydroelectric dams, power lines, gas lines, mines, fossil-fuel projects, and other infrastructure over the next 15 years.

To put that number in perspective, the current value of all infrastructure across the entire planet today is roughly $50 trillion

So, we're talking about more than doubling the amount of global infrastructure in a very short period of time.

Road kill.  Roads and other infrastructure in wilderness areas often have fatal impacts on nature  (©WWF-Malaysia/Lau Ching Fong).

Road kill.  Roads and other infrastructure in wilderness areas often have fatal impacts on nature (©WWF-Malaysia/Lau Ching Fong).

Nobody is denying that the world needs better and more infrastructure -- especially developing nations trying to improve their economic and social conditions.

But to subject the planet to an unprecedented tsunami like this is almost unfathomable.  The environmental consequences -- the impacts on nature and native ecosystems -- simply boggle the mind

One bit of good news is that the Current Biology paper is being used as the scientific foundation -- by scores of the world's top scientists, environmental leaders, and other luminaries -- to lobby the G20 leaders to back down from their pledge to hyper-drive global infrastructure

The paper lays out nine specific recommendations to help make infrastructure projects environmentally safer and more sustainable.  It's no magic bullet, but if taken seriously these recommendations could make a real difference.

Let's hope the G20 listens.  If they don't, they'll be guilty -- and this is no exaggeration -- of promulgating the worst environmental calamity in human history.

 

The man who loves global warming

Alan Oxley is a man many people love to hate.  Why? 

Inhale deeply and it'll all be fine...

Inhale deeply and it'll all be fine...

Oxley, a former Australian trade ambassador, is one of the leading hired guns for environmentally damaging industries -- such as big coal miners, rainforest loggers, and oil palm producers. 

Oxley's latest stunt?  He's fighting the efforts of universities and other shareholders to divest from heavily polluting industries, such as massive coal mines and other fossil fuels.

Coal, after all, is just about the worst fuel imaginable from a global-warming perspective, because it has such a high carbon density China's growing reliance on coal -- it's now building an average of one new coal-fired generating plant per week -- is a key reason why it's blasted past the U.S. to become the world's biggest emitter of greenhouse gases.

Thanks to massive coal consumption, China's carbon dioxide emissions have skyrocketed.

Thanks to massive coal consumption, China's carbon dioxide emissions have skyrocketed.

Oxley's latest crusade follows notable divestment initiatives by Stanford University and, most recently, by Australian National University.  That two leading academic institutions are selling off their investments in industries that drive global warming is sending a chill down the spines of those heavy polluters.

The fact that Oxley has joined the fray shows just how nervous the big polluters are becoming.  Rushing to Oxley's aid was the arch-conservative Australian Treasurer, Joe Hockey, who also criticized Australian National University.   

The big polluters are not really worried about losing investments from a few universities.  They are, however, petrified by the thought that this trickle of divestment initiatives could become a flood -- that it could become positively unfashionable to invest in big polluters.

For that reason, the big coal miners are happy to keep lining the pockets of Alan Oxley -- the man who seems to love global warming.