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Galen '20: Divestment is the only responsible option

The university recently announced plans  to aim for net-zero carbon emissions by 2040, with a 75 percent reduction below current levels by 2025. Brown’s net-zero goals are a great improvement – but by no means exceptional, given the scope of the ecological crisis facing our planet. And, while President Paxson P’19 attempts to use these goals to position Brown as a “leader” on addressing climate change, she ignores the fact that many other universities are setting (and achieving) similar goals. American University has already reduced its emissions to net-zero, and Stanford is set for an 80 percent reduction by 2021. Yet there is one area in which Brown still has plenty of room to distinguish itself from the pack — to “build on distinction,” if you will — and that is divestment.

Paxson has been quite clear about her and the Corporations’ views on divestment. Mirroring the administrations of many other well-endowed universities, she argued in 2013 that divesting from coal was an impractical and inefficient way to further the necessary transition to clean energy. Paxson recently brushed aside questions about divestment from EcoRI News, saying only “Nope. Nope. We rejected that.”

She was wrong then and is wrong now. Divestment, not only from coal but from all fossil fuels, would comprise both an effective blow to the fossil fuel industry and a financially sound decision for the University. A 2013 study from Oxford University points out that divestment damages the fossil fuel industry regardless of whether the strategy actually causes financial harm; the act of divestment encourages  widespread social, financial and political stigmatization, which is needed to loosen the industry’s tight grasp on our energy and political systems.

Paxson argued in 2013 that “divestiture would not have a direct effect on the companies in question,” and that as a symbolic message, it “would convey only a nebulous statement — that coal is harmful — without speaking to the technological and policy actions needed to reduce the harm from coal.” No single message about climate change can address the complexity of this issue, but as seen in the Oxford study, divestment is still an important step.

In addition, fossil fuel companies will continue to dominate our energy industry, even in the face of renewable technology advancements. These companies continue to spend millions of dollars on obstructing renewable energy installations, avoiding policy restraints in the US and abroad and misleading the public. The industry lobby is deeply entrenched in Washington and in financial markets. Divestment will play a key role in ending this entrenchment, and Paxson has not demonstrated a clear understanding of its power.

“To divest in response to anything but the most clear-cut and widely acknowledged cases of social harm would violate our duty to maintain a sound financial policy,” she wrote. “The comparison to tobacco is instructive. Unlike tobacco, which arguably has no social value, cessation of the production and use of coal would itself create significant economic and social harm to countless communities across the globe.”

These arguments are seriously misguided. First, a single institution’s divestment from coal in no way amounts to sudden cessation of coal production, and this implication appears to be almost intentionally misleading. Furthermore, the comparison to tobacco is in fact instructive: Brown did not divest from tobacco until 2003, thirteen years after Harvard divested. We failed to lead then, and now the stakes are much higher. Coal, more than tobacco and more than any other fuel, threatens the future of global civilization and therefore the futures of all Brown students. It is the highest-emitting source of greenhouse gasses and kills hundreds of thousands each year via pollution. To claim that the benefits of coal power offset these catastrophic effects ignores the fact that there are extremely viable alternative fuel sources which don’t kill thousands of people and threaten to destroy societies.

The Corporation’s lack of transparency about its investments undermines the anti-divestment argument as well. Paxson claimed in 2013 that Brown’s coal investments were “much too small for divestiture to reduce corporate profits.” Their official numbers for 2017  place oil and gas investments at 3 percent of the endowment, though we don’t know exactly how much of that investment goes toward coal. Further, Brown, like most but not all universities, does not release its indirect investments in fossil fuels — its holdings in companies which themselves invest in fossil fuels. Doing so might reveal holdings significant enough to have more of an impact than Paxson credits them for.

Regardless of my argument, the Corporation and Paxson must not believe that divestment is in Brown’s best financial interests. Fossil fuels may be bad for the planet, but they guarantee steady returns. Further, divesting entirely from fossil fuels must seem like a ridiculous notion, since it likely requires moving funds out of large and trusted equity firms and into those which are willing to avoid fossil fuel investments.

But University investments are meant to generate long-term returns: Brown is free from the kinds of short-term pressures which plague other institutions. Fossil fuels are not a reliable long-term investment, and firms which avoid them, such as Al Gore’s Generation Investment Management Fund, have consistently outperformed the market even in the short term. It appears that the demise of fossil fuels is inevitable: the crucial question is how fast the world can drop them. The slower their downfall, the more intense the harms to nature and human society will become. What’s more, a recent study in Nature Climate Change confirmed that fossil fuel stocks of all kinds are in a very real sense massively overvalued: their prices reflect the total value of all of the oil, coal and gas reserves they own, which are massive — and which they cannot be allowed to actually use without triggering runaway global warming. Studies of the financial system have pointed out that irrational biases help maintain the continued widespread investment in fossil fuels. Fossil fuel companies currently sit on enough oil, gas and coal to put the Earth well over 7°C warming above pre-industrial averages; to keep below an already disastrous 2°C of warming, we’d have to leave at least 80 percent of known reserves in the ground, which would tremendously reduce the value of these companies.

Within this context, it is clear that there are plenty of financial incentives to divest. Brown could “build on distinction” by acting as a leader among large universities and potentially reap enormous rewards for pre-empting an inevitable market swing. But if this shift away from fossil fuels happens too late, the disastrous effects of warming will already be locked in. Due to political and institutional inertia, this is the outcome that looks most likely.

Large and reputable institutions can catalyze the process of stigmatization, and they must do so soon. Brown’s Corporation has an opportunity to simultaneously take the ethical lead and position the University for financial success in the coming decades. We can only hope they don’t squander it.

Galen Hall ’20 can be reached at Please send responses to this opinion to and op-eds to



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