Students at college campuses are calling on administrators to divest from fossil fuels in an effort to curb the effects of climate change. But schools are wary of doing away with some of their most profitable assets.
The divestment campaign aims to slow the development of coal, oil, and gas resources – forms of energy that emit large quantities of heat-trapping greenhouse gasses and contribute to climate change – by reducing the investment dollars flowing into energy companies. But energy companies have provided colleges and universities with relatively healthy returns in the past several years.
"We're not debating that fossil fuels are profitable right now. We all understand that. This goes beyond profitability," Shea Riester, an organizer on the campaign, told EnergyWire. "The reason they're profitable is because there's no price on the damage that they do."
Mr. Reister is a campus divestment organizer for Better Future Project and 350.org, two environmental advocacy organizations that have spearheaded the movement.
In November, Unity College, based in Unity, Maine, became the first school to vote for fossil fuel divestment in coordination with 350.org. In a public statement, Stephen Mulkey, president of Unity College, said it was unethical for institutions devoted to training future generations of leaders to invest in industries that many say jeopardize the long-term health of the planet.
"[I]n our country it is clear that economic pressure gets results where other means fail," Mr. Mulkey said in the statement. "If we are to honor our commitment to the future, divestment is not optional."
Skeptics say divestment would have a negligible impact on major oil companies' bottom lines, but 350.org contends it's enough to raise awareness about the issue and "start to sow uncertainty about the viability of the fossil fuel industry’s business model."
Within a month of officially launching their campaign last November, the organizers say they had representation on over 190 campuses across the country, and interest continues to grow. Syracuse, Tufts, Stanford, and Dartmouth universities are among the schools where students or faculty have organized chapters of the campaign.
Currently, there are active campaigns at 210 campuses across the country, according to 350.org. In addition to Unity College's pledge, Hampshire College in Massachusetts has committed to eliminating fossil fuel holdings from its portfolio.
A student-led push at Harvard University for the school to divest its $30.7 billion endowment from fossil fuels was met with skepticism by the school's administration.
“Harvard is not considering divesting from companies related to fossil fuels,” Harvard director of news and media relations Kevin Galvin wrote in an e-mail to The Harvard Crimson after a student-initiated referendum in support of divestment earned 72 percent of the voting students last November.
In light of the nationwide student push, the fossil fuel industry has gone on the offensive, saying that divestiture is economically unrealistic.
"Students haven't thought this through," John Felmy, chief economist for the American Petroleum Institute (API), told InsideClimate News. "If you suddenly divest yourself of good performing assets, the only people you're harming are students that rely on scholarships."
The API, a major oil and gas trade organization, commissioned a study of the endowments of 823 US public and private not-for-profit colleges and universities. In fiscal year 2011, 2.1 percent of those schools' assets were in oil and natural gas company stocks, the study found, totaling $8.45 billion.
Between June 2006 and June 2011, the oil and gas company stocks held by colleges and universities produced average annual returns of 7.9 percent, the study found. That's 172 percent higher than the average annual five-year 2.9 percent returns on all US stocks and 68 percent greater than the average annual five-year 4.7 percent returns on all college and university endowment assets, according to API's study.