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Under Discussion: Economic Concerns for a Green Future

photograph of power plant smoke blotting out sun

This piece is part of an Under Discussion series. To read more about this week’s topic and see more pieces from this series visit Under Discussion: Combating Climate Change.

Since taking his oath of office on January 20, 2021, President Biden has quickly taken steps toward fulfilling his promise to make combating climate change a key policy priority for his administration. This agenda marks a dramatic change from the actions of the Trump administration, which systematically rolled back over one hundred environmental protections and regulations. One of the first steps President Biden took was to begin the process of rejoining the Paris Climate Agreement, an international commitment to roll back carbon emissions. President Trump began the process of withdrawing the United States from the agreement in 2017. The central climate goals of the Biden administration are to decarbonize the U.S. power sector by the year 2035 and to make the U.S a 100% clean energy economy with zero net emissions by the year 2050. In the short term, he is pausing new drilling on public lands. President Biden intends for the United States to be a global climate leader during his administration, using climate demands as leverage in deliberations with foreign powers to encourage other countries to also put climate first.

The responses to President Biden’s climate agenda are not all worth considering. Anthropogenic climate change deniers continue to exist and probably always will. Some deniers are more inclined to believe climate conspiracies than they are to trust the consensus view among experts in climate science. Some people, politicians in particular, continue to deny that anthropogenic climate change is happening because they receive donations from the fossil fuel industry or because they know that their voting constituency values fossil fuels over climate. These segments of society can be loud, but the arguments that they are offering aren’t compelling.

Dissenting voices that pose more of a challenge come from those who are afraid of losing their jobs or worry that the economy will become weak if we abandon fossil fuels. Energy is a significant part of our economy, and the fossil fuel industry is the biggest part of that sector, comprising roughly 63%. There is no doubt that pursuing a green energy future will be a substantial change that will displace many workers in the U.S. and abroad. Those that think that these economic considerations should outweigh other consequences seem to be operating according to a principle that says something like: “If a policy leads to loss of employment in a particular field on a large scale, that policy should be rejected.” Do we have good reason to believe that such a principle is true? Several arguments speak against it.

First, if the concern is that the economy will collapse under the pressure of abandoning the fossil fuel industry or that large segments of the population will be permanently out of work, we can look back to other major shifts in our economic system which demonstrate that this is not so. For instance, before the emergence of the modern fossil fuel industry, we used products extracted from the carcasses of whales. Whale oil provided flammable material for lanterns and candles. It was used to make soap, margarine, and to grease mechanical equipment. Before the discovery of plastics, we used baleen (essentially whale bones) to construct the ribbing of corsets and to make children’s toys. We used the bodies of whales to make and do so many things that for some time, whaling was the fifth largest segment of the economy. When we shifted from whale products to fossil fuels and plastics, some jobs disappeared but other jobs were created.

Despite the usefulness of whale products, there were plenty of good reasons to put an end to the whaling industry. Not least among these reasons is that the practice drove whale populations to the brink of extinction. Countless sentient beings were killed and those who were not were frequently seriously wounded during attempts on their lives. The whaling industry was also very dangerous for the humans who participated in it. Often, entire vessels would sink. On other occasions, whalers would be seriously hurt or even killed in battles with whales fighting for their lives. The work involved for the people who actually put themselves in harm’s way was tremendously exploitative; it was not the typical sailor who would get rich from the endeavor. Instead, it was the captain of the ship or the financier.

Despite all of this death, destruction, and exploitation, the whaling industry persisted for centuries. Arguments against it were not taken seriously. How would society function without whaling? What would people who earned their livelihoods from whaling do if the industry suddenly came to an end?

Though some whaling still occurs, the presence of market alternatives brought an end to the whaling industry as a pervasive practice. In the mid-1800’s, we started extracting oil from reservoirs in the ground. In the early 1900s, we developed plastics. In the end, moral arguments didn’t kill the whaling industry, market alternatives did. Those who did the perilous work of killing whales found employment in different sectors.

The threat posed by anthropogenic climate change is many degrees of magnitude greater than the threat posed by whaling. It isn’t just human lives or the lives of whales that are at risk; climate change presents risks for all life on earth, for ourselves, our children and our grandchildren. Those that contribute to the problem least will be the hardest hit. We can hope that these moral arguments won’t be similarly ignored.

Happily, market alternatives to fossil fuels have existed for quite some time, but the United States has been reluctant to pursue them aggressively. If the concern is loss of jobs, the green energy sector has the potential to replace those that are lost. One of President Biden’s goals for his first term is to make changes that will result in 10 million clean energy jobs that pay high wages and offer benefits and worker protections.

What’s more, we don’t apply the principle, “If a policy leads to loss of employment in a particular field on a large scale, that policy should be rejected” to all possible jobs, only those that preserve our existing systems of power. When a Wal-Mart moves in across the street and puts a mom-and-pop shop out of business, politicians rarely raise concerns about the jobs lost. In those cases, “that’s just the way the market works.” In the case of fossil fuels, the concern doesn’t really seem to be about loss of jobs, it seems to be fear that the people who currently have power will lose it. People with money and power rarely want to give up the source of those things, regardless of what might be at stake.

President Biden’s climate goals are ambitious and it’s far from certain that we can achieve them, especially given the fact that many of these proposals will require collaboration between political parties. That seems close to impossible to achieve in this political climate. It is unfortunate that there is such political gridlock on this issue. If there weren’t fortunes to be defended, one would think that everyone could come together on this. A green energy future would be indisputably better for the lives and health of everyone and for the natural beauty of this planet.

University Divestment from Fossil Fuels

photograph of campus building at McGill University

This month, tenured McGill University Philosophy professor Gregory Mikkelson resigned from his position. Mikkelson explained that he could no longer work for an institution that professes a commitment to a reduction to its carbon footprint, all the while continuing to invest in fossil fuels. Mikkelson argued further that the university board’s continued refusal to divest from fossil fuels is in opposition to the democratic mandate in favor of divestment that has developed across the campus.

Mikkelson’s actions make a powerful statement in a general academic climate in which divestment from fossil fuels has strong support among faculty and students. Some universities have taken action in response. In September 2019, the University of California system announced that they would be cutting fossil fuels from their over $80 billion dollar investment portfolio, citing financial risk as a major motivating factor. The University of California system is the largest educational system in the country, so this move sets an important precedent for other universities under pressure to do the same thing.

Many prominent schools across the country are resisting pressure to divest. On January 3rd, students of Harvard and Yale Universities staged a protest of their respective universities’ continued support for the fossil fuel industry by storming the field of the annual football game between Harvard and Yale, delaying the game by almost an hour. This is only one such protest; there have been many others over a span of almost a decade. Students, faculty members, and staff have occupied the offices of administrators, held sit-ins, and conducted rallies.

Those who wish to defend continued investment in the fossil fuel industry make the argument that universities have a fiduciary obligation to students, faculty, and staff. As a result, they need to maintain the most promising investment portfolio possible. They need financial security in order to continue to provide a thriving learning environment. This involves investing in the market that actually exists rather than an idealized market that doesn’t. A portfolio that includes diversified investments in sustainable renewable sources of energy would be ideal, but many think that the current political climate provides little evidence that this approach would be a wise investment strategy. President Trump can be relied upon to thwart the advance of renewable energy at every turn. At this point, it is unclear how many more years universities will need to make investment decisions that take into account the political realities of living under this administration. Those who make this argument contend that the primary obligation of a university—first and foremost—is to provide education to students. Universities can fulfill this obligation if and only if they are financially secure.

Relatedly, some argue that, in keeping with universities’ general fiduciary responsibilities, institutions should avoid making investment decisions that are overly political. Investments that look like political statements could deter future donors, which would limit the potential services the university could provide. In response to this argument, critics are quick to point out that continued investment in fossil fuels is a political statement. Crucially, it is a political statement with which the heart and soul of the university—faculty, staff, and students—tend to strenuously disagree.

Those who want to defend continued investment in the fossil fuel industry argue further that investors are in a better position to change the behavior of fossil fuel companies because they have voting powers on crucial issues. Shareholders are in a position to vote directors and even entire boards out of their jobs if they do not acknowledge and take meaningful action on climate change. Shareholders are in a position to force transparency when it comes to publishing substantive emissions data. When fossil fuel industries are forced to acknowledge the threat that they pose, they may lead the transition to renewables from within.

Many critics are dubious about the authenticity of this proposal. Even if we take it at face value, we don’t have much reason to believe that this approach is motivating the fossil fuel industry at anything approaching the rate we would need to see in order to achieve the necessary change in the right timeframe. To ward off, or, at the very least, minimize, the threat posed by climate change, we need to take significant meaningful action now, rather than waiting the indeterminate amount of time it might take for the fossil fuel industry to make internal changes that seem to be decidedly against their own interests.

Many disagree with the claim that continued investment in fossil fuels provides a university with financial security. In fact, the entire University of California system disagrees. The reasons the UC system offered for their decision to divest were financial rather than ethical. Their argument is that abandoning investment in fossil fuels now in favor of developing a portfolio of sustainable renewable resources cuts their losses later and is consistent with the inevitable green path forward. It simply isn’t possible to continue in the direction we’re headed. We will inevitably change course.

When academic institutions refuse to divest, faculty and students are put in an uncomfortable position—it is difficult for a person who is concerned about climate change to continue in their role at such an institution while avoiding the charge of personal hypocrisy. Students work hard to earn their spots at universities, and they pay dearly for them. The academic job market is notoriously competitive, and professor positions are extremely hard to come by. Many find Mikkelson’s actions admirable, but recognize that they are not in a position to follow in his footsteps.

Divestment sends a powerful message—institutions of higher education will no longer provide financial support to industries that contribute to climate change. The very nature and mission of universities cast such institutions in pivotal roles to usher in a new, healthier, greener future. Far from shying away from this role, universities should embrace it as a natural fit—after all, they ideally prepare young citizens to design, and thrive in, a promising future. Mikkelson recognized that refusal on the part of higher education to divest from fossil fuels is hypocrisy on the part of the university itself—it is antithetical to the goals of excellence in innovation, empathy and compassion toward our fellow living beings and respect for the ecosystems in which we live, as well as clear, rigorous critical thinking that includes the ability to give appropriate weight to supporting evidence.

What’s more, fossil fuel companies have intentionally obfuscated the facts when it comes to the harms posed by climate change. This practice of putting significant roadblocks in the pathway to knowledge about critical issues is not consistent with the pursuit of knowledge that characterizes a college or university. If an academic institution is to act with integrity, it should not continue to support campaigns of misinformation, especially when the stakes are so high.

Fossil Fuel Divestment is a Moral Issue

Over the last year or so, the word divestment has taken on new meaning. Until recently, this term popularly referred to the movement in the 1970s and 80s to remove all investments from South Africa. The goal was to retract financial support for companies participating in Apartheid. Divestment now refers primarily to fossil fuel divestment: freezing and removing all investments in fossil fuel companies.

Why would the DePauw Community ask our Board of Trustees to divest from fossil fuels, and how is this issue related to ethics? In my eyes, the number one reason for divestment is to align the values and actions of an institution that I financially support (DePauw) with my own. Since the burning of fossil fuels is the number one source of greenhouse gas emissions, fossil fuel companies are culpable of driving the increased concentrations of GHGs in the atmosphere, and thus, climate change. Their crimes against the climate are becoming even more atrocious as they continue to drill for oil in remote and fragile places and as they resort to unconventional sources such as tar sands. While I fully understand that it is our demand for fossil fuels that is driving these actions, I think that we must look for ways to remove our support from this industry. This is only the first of many steps in the journey to move away from our carbon-central society and economy.

Some may argue against divestment saying that it will have no impact on fossil fuel companies. They argue that other people will buy up the stocks that DePauw sells. I agree that this is the case, but I don’t think that it is an argument against divesting. Divestment is a moral issue. It’s about acting in a way that is consistent with our values. In addition, through the process of divestment, we can educate the community about climate change and engage in open discourse about the issue. This is perhaps the most valuable part of the divestment movement.

We have made great headway on our divestment campaign at DePauw in the last month. We wrote President Casey a letter requesting divestment, which he promptly shared with the entire faculty. He even mentioned his intention to share it with the Board of Trustees. Additionally, we have two events in the next week. The first is a Divestment Rally in MeHarry Hall at 3pm on April 13th. Tricia Shapiro, author of “Mountain Justice”, will be joining us to talk about the coal industry’s impacts in Appalachia. Bill McKibben will also be skyping in to talk about his work with 350.org. The second event is a forum on Monday, April 15th in the Watson Forum. Joining us for a panel discussion will be Michelle Villinski from the Economics Department, Jen Everett from the Philosophy Department, and Jim Mills from the Geology Department. Divest DePauw, the group of students involved in this campaign, is immensely excited to engage in discourse with faculty and students on this topic.