
The heirs to the Rockefeller fortune announced Monday that its $860 million philanthropic organization, the Rockefeller Brothers Fund, is joining a movement that had its beginnings on college campuses, including Bowdoin College, over the last few years.
The announcement was timed to coinicide with Tuesday’s opening of the U.N. Climate Change summit, but in recent years, 180 institutions, including universities, philanthropies, religious organizations and the pension funds of local and state governments, as well as many individual investors, have pledged to sell assets tied to fossil fuel companies.
All in all, the groups and individuals have pledged to divest $60 billion.
While their efforts are unlikely to have an immediate effect on oil, coal, natural gas, and other fossil fuel companies, the reality is that these individuals and organizations are the beginning of a movement that will resonate as government interest in climate change stagnates under political weight.
Many companies that offer a 401K plan or other defined contribution plan offer some sort of socially responsible investing. Most are concerned with investments in clean or green energy, avoiding investments in conflict zones and in corporations that abuse labor. A solar farm would score higher on a socially responsible investment than a hydro dam; companies that use organized labor within the U.S. would score higher than those that farm out labor to foreign countries where the labor chain is uncertain. The highest order of socially responsible investing is the so-called “Common Good” investment, which is based more on cooperation than on competition. In the short term, that may mean less return on investment; in the long term, the company is more stable, isn’t constantly fighting with its fellow companies, and ultimately, everyone benefits.
The energy situation is a case in point, which is why the Rockefellers’ decision is so important, aside from the obvious symbolic importance of the Standard Oil heirs divesting. After some decrease in the amount of carbon going into the atmosphere, thanks in part to American fracking and increased use of carbon-based fuels in emerging economies such as China and India, we are more than on par to increase our atmospheric carbon input at more than double the rate of change in the 60s. Relative to pre-industrial world tempertures, there is a chance that the temperature could be more than 8 degrees F higher, with a carbon level in the atmosphere of 882.87 parts per million. Today, we are at about 400 parts per million.
Nothing about climate change is easy, except that the means to at least bend the curve are already at hand and are coming down in price. Solar, wind, hydro, geothermal, heat pumps, and extant carbon, such as wood and pellets, would slow the rise of atmospheric carbon. The carbon we would need to expend via natural gas could be used as a bridge to find a transit solution that doesn’t require fossil fuels.
Over the long term, fossil fuel companies will either change focus or shut down.
And while it would be nice to imagine that huge demonstrations like this weekend’s Climate Change March — the largest climate march of all time to date — make a real difference, we know the reality is that money will drive whatever solution is finally arrived at.
Shareholders, not protesters, will lead the way, and the revolution will probably not be televised.
On the day that Standard Oil becomes Standard Sun and Wind, and the heirs to the Rockefeller fortune reinvest in it, we’ll know the world is going to be safe.
While the U.S. still uses nearly 20 percent of all fossil fuels, even if we were able to do away with them instantly, the developing economies have the capacity to use much more. On one hand, China and India have the prime opportunity to go solar or wind-based practically from the beginning of their industrial revolutions. Coal may be cheap, but both nations are manuafacturing low-cost solar panels and wind turbines as well. The timing couldn’t be more perfect; yet there seems to be little incentive to jettison old coal plants and go green. As the U.S. (with any luck) and Europe wean themselves off oil, gas, nuclear, and coal, the developing countries of Asia are taking what we are not using and then some, encouraged by low prices offered by some fossil fuel companies that see the end game nearing.
What would it take to push them into a greener future? What would it take the U.S. to push us into a sustainable future?
First, a strong carrot and stick approach. A world body that can levy and enforce carbon taxes, and can provide support for both mature and developing economies to get off fossil fuels, once and for all. Maine recently rejected a large corporation that was planning to invest billions in the state to establish an offshore wind farm in the Gulf of Maine. That wind farm would have been able to light the whole Eastern Seaboard.
That sort of action would encourage investment from the world body. On the other hand, tar sands pipelines would penalize the country that installed them.
For China and India, and other developing countries in Asia, the incentives may outweigh the reticence to abandon what is for them cheap fossil fuels at the moment. Massive pollution problems could disappear within months, and a healthier population would have additional dividends.
We aren’t expecting much from this Climate Change summit, but if there is any takeaway from this weekend and this Monday’s announcement, the people and the shareholders may be seizing the reins from the government and the corporation. And that can only be a very good thing.
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