Aligning ethics and economics

By Leslie Campbell, July/August 2014

Using the anti-apartheid playbook to reduce carbon emissions.

New reports on the dire consequences of climate change seem to be coming out every week. One of the latest, on June 23, was delivered by the Risky Business Project, a US bipartisan organization led by former Treasury Secretary Henry Paulson Jr, former mayor of New York Michael Bloomberg, and billionaire former hedge fund executive Thomas Steyer. Paulson described the economic risks from climate change as “more perverse and cruel than we saw with the financial crisis.” Their report found that two of the most severe impacts—sea level rise and extreme heat—will likely cost billions of dollars in annual property loss, threaten human health, lower labour productivity, and endanger the nation’s electricity grids. The numbers are staggering—and too much of a downer for summer reading.

So where’s the hope, you ask?

Well, from my hazy memory banks, I pull out a lesson from Sociology 101 about social movements. By their nature they are amorphous. To be successful, they require people and organizations at many points on the frontlines and behind the scenes, engaging in all manners of action, all with the faith that collectively they can bring about change. Protests, civil disobedience, court challenges, letter-writing, educational campaigns, and media engagement are all part of the mix. In a capitalist economy such as ours, it’s undeniably helpful to have “elites” like Paulson and his cronies urging fellow elites to curb their emissions and calling on governments to change policies. Paulson recently wrote a New York Times editorial calling for carbon taxes and an end to subsidies of the petroleum industry.

He hasn’t quite joined Archbishop Desmond Tutu in calling for an international anti-apartheid-style boycott against the fossil fuel industry, but maybe that’s coming. Tutu believes that the moral and financial pressure used in the 1960s to end apartheid in South Africa now needs to be applied against the worst carbon emitters (he singled out Canada’s dirty oil as an example) to stop the worst effects of climate change. 

“It makes no sense to invest in companies that undermine our future,” he wrote in the Guardian, noting, “Already some colleges and pension funds have declared that they want their investments congruent with their beliefs.” Indeed there are 550 world-wide campaigns, including 40 at Canadian universities. Stanford University recently announced it will divest 100 coal companies. UBC, Simon Fraser, and the cities of Seattle and Vancouver are also working towards divestment. Other organizations too, like the British Medical Association, are jumping on board. Many in the environmental movement view divestment as one of the most promising developments in years: a potent alliance of moral and financial forces.

And the University of Victoria is one of the movement’s hot spots. Two thousand UVic students signed a petition calling on the university to divest all current holdings in fossil fuels within three years. UVic student Kelsey Mech was recently chosen as National Director for the Canadian Youth Climate Coalition, which coordinates all the divestment campaigns across Canada. 

In May (the planet’s hottest month on record), 66.4 percent of UVic’s faculty voted in favour of a motion directing their pension fund to divest from fossil fuels and calling on the University of Victoria Foundation board to do the same. Over the summer, UVic’s Board of Governors and its Foundation board will be voting on the motion.

James Rowe, a professor in Environmental Studies at UVic, says, “We think [fossil fuel divestment] can help change the political calculus, and accelerate progress towards the low-carbon economy we all need.”

Rowe told the Vancouver Observer recently he began to feel it was hypocritical to “stand in front of the classroom explaining why we need to be drawing down emissions, and yet our retirement is being financed by fossil fuel companies.”

The faculty members involved in UVic’s divestment campaign are smart enough to know they have to convince the powers-that-be that divestment will not result in financial losses. These are, after all, pension funds that faculty are counting on for their retirement.

Fortunately, that shouldn’t be too difficult. Many are already convinced of the imprudence of putting any eggs in the fossil fuel basket.

The motion voted on by UVic faculty members puts the argument starkly, stating, “the ongoing push by energy companies to continue to invest in long-term fossil fuel extraction projects are most likely to result in a carbon bubble and [worthless] stranded assets as evidenced by the Carbon Tracker Initiative…” This is referencing the accepted mathematical analysis that at least two-thirds of current petro-reserves will have to be left in the ground to prevent a two-degrees Celsius hike in average global temperature.

On a recent Bill Moyers’ show, Thomas Van Dyk, a senior VP with RBC Wealth Management, also argued that it’s risky to stay in fossil fuels over the long term and that there is no evidence that one can’t earn as good returns without fossil fuels. In fact, he said the best financially performing companies have strong social and environmental practices. 

His colleague on the same show, Ellen Dorsey of the Wallace Global Fund, noted that academic institutions and other charitable institutions have a fiduciary duty to ensure their investments are serving the public good—and there could not be a more obvious case to the contrary than that of the fossil fuel industry. Not mincing words, she characterized the industry this way: “It’s funding the denial of the problem; refusing to advance safe and clean alternatives; and shutting down the policy process with campaign contributions and lobbying.” The goal, she said, is not necessarily to have an immediate economic impact, “but to isolate it as a moral pariah like apartheid, like tobacco.”

Enroute to the Healing Walk in the tar sands, Kelsey Mech emailed me. She said, “We’ve seen some major headway at campaigns across the country, although no outright wins in Canada yet.” Which means UVic has the opportunity to be the first in Canada to divest.

According to Mech, “As a university we have the moral obligation to stop supporting industries that will create an unliveable future for all of us and resource extraction projects that are directly impacting the health and land of communities living on the front lines. Students at UVic, and other schools across the country, will not stand down. In the face of pipeline projects from Northern Gateway to Energy East, now more than ever we must reverse the direction this country’s energy economy is headed.”

Editor Leslie Campbell invests in community journalism and the arts—and feels enriched for it. She’s also looking forward to learning more about the new Community Investment Fund to be launched in September by the Community Social Planning Council.