Stanford University’s board of trustees has voted to divest from the university’s $18.7 billion endowment all of its holdings in coal-based energy companies. The university, which is private, has not disclosed what holdings these are, their market value, or the likely cost to the institution in foregone growth of its portfolio.
The significance of the decision is that Stanford now becomes by far the largest and wealthiest college or university to heed the call of the new divestment movement. That movement, launched in the fall of 2012, aims to persuade college boards of trustees across the country to prune their institutional portfolios of investments in fossil fuel companies.
So far, few colleges and universities have signed on. Harvard has temporized. In April, Pitzer College accounted it was taking the plunge. Presumably Stanford’s decision will embolden the movement on other campuses and possibly sway other board of trustees.
This sort of divestment appears to some observers as merely a sideshow. After all, even if every college and university in the country divested itself of fossil fuel holdings, the fossil fuel companies would simply shrug. Chevron would not quake. Exxon Mobile would not flinch. Thousands of other investors would gladly pick up the shares. As a friend put it to me this morning, “Nothing changes, except for some short-lived warm and fuzzy self-congratulatory eelings.”
But that dismissive assessment is short-sighted. The leaders of the divestment movement–Bill McKibben especially–fully recognized that divestment itself would not change the finances of energy production. They are playing an entirely different game. When I heard McKibben speak last
fall to a rally at the New School, he made the point powerfully. The aim of the divestment movement isn’t divestment per se. The aim is to lay down a long-lasting antipathy to fossil fuel companies in particular and to capitalism in general among today’s college students.
Divestment isn’t about stocks; it is about souls.
Moreover, because the divestment movement is about building long-term loyalty and ideological disposition, it really doesn’t matter to its leaders whether a board chooses to divest, partly divest, or stick to its guns. Frustrating your recruits is just as good as rewarding them. Or maybe better. If you are in the business of selling absolution and moral purity, you shouldn’t sell it cheap.
The headlines and news stories about Stanford’s decision imply that the action represents a kind of moral awakening on the part of trustees. And it may be true that some trustees are now inflated with a sense of eco-righteousness. But the more interesting topic is how the promoters of radical environmentalism went about summoning enthusiastic support among students (and faculty members).
Stanford, like most universities, has a policy that obligates its trustees to maximize the financial return on its invested assets. That policy allows, however, that the trustees can “give independent weight to” practices that “cause substantial social injury.” This is the ledge on which anti-Apartheid activists in the 1980s built an earlier
During the 2012-2013 academic year, Stanford students organized a chapter of the national Fossil Free Campaign. That campaign originated in summer 2012 as a project called “Go Fossil Free” launched by Bill McKibben’s organization 350.org. McKibben had gone on a nationwide speaking tour, “Do the Math,” and had published a widely-read cover story in Rolling Stone magazine aimed at inciting global warming alarmism. His organization had been spending most of its time rallying protestors against the Keystone XL pipeline. In his new memoir, Oil and Honey: The Education of an Unlikely Activist, McKibben presents himself as a peaceful writer reluctantly drawn into radical activism by the existential challenge of global warming. He travels from his home in Vermont to Washington, D.C. to protest the pipeline, gets arrested (as planned) but misses the catastrophe back home in Vermont when Hurricane Irene devastates the state with flash floods. Naturally, with his background as a writer for the New Yorker’s Talk of the Town, he was able to draw the scientific conclusion that the heavy rains were the result of the “one degree of temperature increase” that climatologists had told him about.
McKibben is far from the reluctant innocent that he pretends to be in his memoir. We have an earlier memoir by him, Wandering Home (2005) where he frankly describes his association with the environmental saboteurs, Earth First!, in the 1980s, and his subsequent involvement with that organization.
In any case, we have a testament from the movement’s architect as to exactly when the divestment movement first occurred to him. On June 6, 2012, McKibben read a paper
published in the journal Nature, about a “state shift in the Earth’s biosphere,” that persuaded him that protesting pipelines wasn’t enough. “We needed instead to go straight at the fossil fuel industry,” (p. 140). And “six months later the sparks we’d lighted would spread into a full-blown divestment movement.” Again, McKibben is clear that the goal is not financial but psychological: “Divestment wouldn’t bankrupt the fossil fuel companies, but at least we’d alter the geometry of the political battle a little…” The goal was to weaken “the fossil fuel industry’s political standing”
Igniting a Campus
The fossil free movement has spread far and wide on American campuses. Fossil Free Stanford organized in fall 2012 after McKibben visited Palo Alto on his “Do the Math Tour.” Two of the founding members, Michael Penuelas and Yari Greaney, both from the class of 2015, proclaimed their commitment. Greaney held that “our tuition money…is going to support industries that are polluting our future.” They were from the start shrewd in a 350.org manner about playing the system. By February 2013, they were in touch with the APIRL, Stanford’s Advisory Panel of Investment Responsibility and Licensing. By May they had made a formal presentation to APIRL, which pretty much assured a further consideration of their case before the board. Members of Fossil Free Stanford expressed their satisfaction that APIRL understood the “urgency of the situation.”
Urgency? What the students were calling for was, according to the movement’s own philosopher, a symbolic gesture, for which the only urgency lay in the dynamics of the movement itself.
Be that as it may, Fossil Free Stanford was busy. In April 2013, it held “Divestment Week,” during which it staged numerous rallies, culminating on a march to the president’s office where 200 handwritten letters from Stanford alumni who supported the cause were delivered. Fossil Free then created an online petition and by mid-May 2013 had gathered over 1,000 signatures and presented them at another event staged in front of the university president’s office. The undergraduate Senate passed a measure at the end of May calling on the university to divest fully within five years. Another letter was circulated among senior faculty members and garnered over 50 signatures.
The details beyond this point don’t especially matter. The students waged a textbook campaign, assembling impressive numbers, soliciting key testimonials, maintaining a respectful tone towards authority while at the same time keeping up the pressure.
The question is really: to what end? The answer is, sadly, self-delusion. No one doubts that Stanford students are smart, but their intelligence is not much of a defense against irrational enthusiasms that can sweep through a community. What the divestment movement has sold to Stanford students is a bit of flummery. When Stanford announced on May 6 that it would divest “direct investments in coal mining companies,” President John Hennessy issued a statement that begins, “Stanford has a responsibility as a global citizen to promote sustainability for the planet…”
Got that? Stanford is no longer a university. It is a “global citizen.” And global citizens, of course, are charged with promoting “sustainability.”
It would be tedious to argue against this, and something like taking arms against a sea of lime Jello. Let’s just say that Stanford has conformed itself to an ideological movement that boasts of its scientific respectability while marginalizing dissenting views and conflicting evidence. And that Stanford has allied itself with a movement that is much more ambitious and entangling than its trustees may realize.
That “global citizen” conceit is not just a benign metaphor that signals “we care about humanity.” It is a slogan for the divestment movement’s larger goals. As Power Shift (an ally of 350.org) puts it, “National Solidarity Divestment Movement is one which is ideologically anti-racist and anti-oppressive.” Power Shift unpacks what the activists believe global citizenship and
This is not a single-issue movement. This is a space where environmental justice, climate justice, and economic justice have come into contact. We understand that we will not win the fight against the fossil fuel industry without confronting racism, classism, homophobia, and other systems of oppression in our movement spaces.
My colleagues and I at the National Association of Scholars have been pointing out for some time how fluidly the sustainability movement changes from clean energy advocacy to a hard left agenda on social issues. Official Stanford no doubt brushes aside these elaborations, thinking that it has discerned the core issue: dirty industries that pollute the water, blight the landscape, and foul the air. But the true core issue is the effort of a movement to foster in students a lifelong aversion to Western values.
How well it will succeed in that no one knows, but there is no comfort in the ease with which Bill McKibben in a little less than two years has conjured this movement into existence.
This movement has an imaginative capacity to feed off its own defeats. That it could succeed at Stanford is especially telling. Americans as a whole are growing more and more skeptical of the man-made global warning narrative, and even more skeptical of the idea that we can swap out relatively cheap and energy-rich fuels for “clean renewables.” California has taken the lead among the fifty states in mandating renewable energy production, which has so far produced mainly a 30 percent jump in residential energy prices from 2006 to 2012. California’s retail energy sells at 14 cents per kilowatt-hour, compared to 8 cents per kilowatt-hour for states that produce electricity the old-fashioned way. Californians are in for a projected 47 percent further increase in prices over the next 16 years.
This is the sort of data that one hopes that APIRL and the Stanford trustees pored over as they decided to shake the coal dust from the institutional spreadsheets and wash their hands with pure mountain spring water. As Bill McKibben once advised, “Do the math.”
(Photo: Stanford student protests her school’s investment in fossil fuels. Credit: Stanford Daily.)
12 thoughts on “Stanford Divests–and Entangles Itself”
The article seems to have a bit of a personal bias, but I was truly impressed by the comments that followed. The lot of you sound like ignorant conspiracy theorists. National socialist movement, really? That’s quite a jump from an organization that calls for solidarity in reducing usage of fossil fuels – a fuel source that is directly responsible for adverse living conditions.
Oh, I see, they both start with the letter “S,” they must be connected! Derp derp.
And Patricia sounds like she’s upset that she never went to college, or at the least feels self conscious about it (though I don’t know why.)
If you have nothing valuable to add, at least keep your tin foil hat drivel to yourselves. You make honest conservatives look stupid.
But to paraphrase a line from Catch-22, if everyone divested themselves of these stocks at once, you’d be a d—-d fool to do anything else.
Actually, from the investor side, this move may be somewhat shrewd, at least over the near term.
Earning abilities of the larger industrial producers are likely to be under pressure for the next few years due to shifts in “substitutions” (not by the Green Goofs)of energy sources (gas for oil or coal, e.g.) new radial turbine engines displacing the common internal combustion form, etc.
It does not appear that the actions will extend to *users* of fuels. Gadfrey! How would the students and fac get away for some quality off-campus time; or, get their yogurt delivered?
After a bit, these student/fac groups will pass on; the make up will change, interests and “passions” (or even the need to have passions) will moderate and “melt.”
No single generation, however much damage it inflicted, has ever “changed the world.”
Enviros are the most dangerous movement on planet earth. Like Marxists they are an “anti” ideology. They have no practical positive alternative to free market capitalism, property rights and scientific progress other than tyranny. They want to run the whole shebang at gunpoint. Their way or the highway.
How do we support 7-8 billion people without fossil fuels, nuclear energy and a vibrant culture of scientific innovation powered by capitalist entrepreneurs? They have no answer except to regress back to a primitive low tech culture that cannot support 2 billion people, much less 7 billion. Environmentalism is a culture of death. It is anti-science, anti-progress and anti-freedom. In fact, they scoff at freedom.
McKibben is a 21st century American equivalent of a fundamentalist Islamic jihadi. It’s useful to remember that the Nazis were big time environmentalists. Enviros like McKibben are wannabe tyrants immune to reason. They want power. The green movement is simply their means to it.
Hmmmm….do you think Disinvestment movement against Israel has raising consciousness that there are Jewish students on campus in mind? That it isn’t really about defeating Israel but about giving students certain attitudes?
Bastions of Ideological Stupidity.
I watched a documentary about the founding of Greenpeace. One of the leaders remarked that when the Vietnam War was over, which they considered to be a feather in their activist caps, they wondered what they would “do next.” Now, if ending the war was all they wanted, why didn’t they just get jobs, etc.?
He all but admitted that the antiwar movement and now the enviro movement were subsets of the same overarching goal: transformation of our society. Sound familiar?
its a classic hedge trade …
divest from fossil fuels, invest in green nonsense …
Sounds like a wonderful investment opportunity.
“National Solidarity Divestment Movement”
“National Solidarity”. That reads uncomfortably close to “National Socialist”, doesn’t it?
One has to wonder — does McKibben really desire a world with no fossil fuel usage, or does he just want to profit from leading a zealous movement that proclaims that to be the goal? He doesn’t ask his student followers to go cold turkey on electricity, gasoline, heat from fossil fuels, but if saving the planet is the urgent goal, why not? The answer, I think, is that his movement loses adherents when they’re asked to go beyond warm and fuzzy symbolism.
As long as Stanford is at or near the top in annual giving, the price of electricity in California won’t matter much to its fortunes. And of course, divesting of oil stocks will hardly cause a ripple in their endowment returns.
I would be much more impressed if Stanford restricted campus access for fossil-fuel powered automobiles, including faculty and student parking. Now that would really be taking a stand!