Op Ed: Divestment, Cornell's Brand of Ignorance
David Bunck argues that divestment will not have an impact on the economics of burning fossil fuels...comments share
By David Bunck, via the Cornell Daily Sun, 03/13/14
A resolution targeting campus carbon neutrality by 2035 and divestment of Cornell’s endowment from companies holding oil and coal reserves was recently passed by the Graduate and Professional Student Assembly and is now being considered in both the Student and University Assemblies. Student and faculty leadership advocate divestment as a way to brand Cornell as a leader in a movement towards a sustainable future. In reality, it brands us as ignorant.
There is no longer any debate that rising carbon dioxide levels in the atmosphere will have significant consequences for our environment. In that regard, I support the aspect of this resolution that ambitiously targets carbon neutrality by 2035. However, folded into the resolution is a mandate to divest Cornell’s endowment from oil and coal companies because of their apathy toward climate change. In reality, these companies offer the most promising avenues to globalize renewable energy. The argument proclaiming these misconceptions, however, was built from two statistics about these industries that appeared in their presentation to both the GPSA and Faculty Senate:
1) “2012 corporate spending on: ‘finding and developing’ new fossil fuel reserves [was] $674 billion.” The Carbon Tracker Initiative, a think tank that aims for unilateral divestment from oil and coal companies, reports this figure not as exploration costs, but as total capital expenditures. Virtually all consumable products, from plastics to medications, benefit from inexpensive chemicals derived from oil. Thus an oil company’s capital expenditures include not only the cost of exploration and maintaining oil rigs, but also investments in the processes used to transform (or crack) oil into precursors for materials critical to daily life. This spending also includes launching large renewable energy projects, such as BP’s investments in biofuels and the construction of wind turbines. Thus, the argument that these investments are strictly for oil exploration is simply not correct.
2) “2012 corporate spending on: renewable energy corporate research and development [was] $4.8 billion, out of $244 billion total investments.” This statistic, however, fails to account for ways these companies invest in renewables beyond research and development, and its presentation is removed from useful context. Significant technological advances occur at small companies, who don’t have the resources to globalize their products. Larger companies bring this technology to market by purchasing them. Either by intent or oversight, the $7.1 billion (and $29.5 billion in 2011) spent on corporate mergers and acquisitions related to renewable energy was omitted from the discussion. It is also problematic to evaluate these numbers without a frame of reference: Consider that the Department of Energy’s Basic Research budget was $1.6 billion for the same time period ($1.7 billion in 2013) and the total research budget for the National Science Foundation was $7.0 billion. Suddenly, $4.8 billion doesn’t seem so insignificant. While I advocate that all parties expand their research budgets, the companies villainized by this resolution are indeed making tangible contributions. The misrepresentation of these statistics mislead the Faculty Senate and Graduate and Professional Student Assembly, necessitating a closer look by the remaining assemblies to avoid voting in ignorance.
The unfortunate reality is that divestment will not change anyone’s carbon footprint nor have any impact on the underlying economics of burning fossil fuels. Thus, even a temporary drop in share price from selling our stocks, or even a collective sell-off, won’t affect an oil company’s earnings or the attractiveness of investment. Publicly traded companies are also accountable to their shareholders, hence divesting risks selling Cornell’s shares to others less passionate in mitigating climate change. A collective of concerned investors can express their opinions at shareholders meetings, where we would have the direct attention of the senior leadership. This approach is critical, because technological solutions depend on the oil industry. Renewable energy needs plastics, lubricants and other devices derived from oil as raw materials. These companies have the power to globalize renewable energy and drive innovation, and we can help direct that change.The faculty supporters of this resolution raised a call to action, but their rhetoric is devoid of technological or behavioral improvements, instead supporters hope that shuffling money will produce tangible change. I encourage them to speak with Cornellians who think daily about addressing these challenges. Basic energy research at Cornell is supported both through the Cornell Center for Materials Research (funded by the NSF) and the Energy Materials Center at Cornell (funded by the DOE) and many members of these communities would love to discuss the future challenges of energy generation and its storage. In Nov. 2012, several GPSA members and I advocated for funding basic research to members of Congress through Cornell’s lobbying office. Faculty and student leaders can use their roles to do the same.
I implore the Cornell community to closely consider the implications of oil and coal divestment, which will interfere with our goals of a sustainable future. The time for symbolic statements is over. We must implement the difficult changes on campus to achieve carbon neutrality, while advocating through shareholders meetings and our lobbying office, driving basic energy research, and continuing to motivate our talented students to have worldwide impact. This will brand Cornell as a leader in addressing climate change.
David Bunck is a fifth-year graduate student in the Department of Chemistry and Chemical Biology. He is also a voting member of the Graduate and Professional Student Assembly and Executive Vice Chair of the University Assembly. He can be reached at email@example.com.
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