Below are a set of excerpts from a CCNF virtual session with Ben Franta, PhD Candidate in Applied Physics at the Harvard School of Engineering and Applied Sciences and a board member of the group Divest Harvard, and Geoffrey Supran, MIT Energy Fellow and leader of the group Fossil Free MIT. The transcript is minimally edited for readability and brevity.
Quirke: Welcome Ben and Geoffrey, so before we get into the weeds, what is divestment?
Franta: Divestment is the opposite of investment, so when you pull your investments out of a particular sector or company — that is divestment. Often people will do this as an act of protest or because what the company is doing is not socially responsible. So some prominent examples in the past include: institutional divestment from tobacco companies in the 1990s, and divestment from companies doing business in apartheid South Africa. There have been some more recent ones as well, like companies implicated in genocide in South Sudan.
Quirke: And regarding this movement calling on institutions to divest their money in fossil fuel companies, how did this come about?
Franta: The movement really got big in 2012, or it started to. It actually originated in Swarthmore College, outside Philadelphia. There was a group there that was particularly interested in mountaintop removal coal mining and getting the college to stop investing in coal companies, and the activist organization 350.org, which is probably the biggest grassroots climate-action organization, noticed this movement and were interested to see if they could scale it up. They wanted to see if there was really a demand for this sort of thing out there. So they [350.org] seeded a number of campaigns, and one of those was Harvard, in the fall of 2012. At that time there were probably only about 10 campaigns in existence, and then it just started to snowball.
Quirke: Geoffrey, MIT recently had a high profile debate on this topic — this was a very different reaction towards the divestment movement than that of Harvard, which has kind of rebuffed a substantive dialogue with students on the topic instead of embrace one like MIT. Please explain your perspective on the movement and what your group, Fossil Free MIT, is doing.
Supran: So just like at Harvard and around the country, at MIT we are calling on our administration to divest our $12.5 billion endowment from the fossil fuel industry. As you mentioned, the dynamic of the debate over divestment has been very different at MIT as compared to Harvard, but the ask is very much the same. To put it into context, I am a physicist and material scientist engineer by training, and my colleagues and I found ourselves sitting in the labs at MIT being paid to build the next generation of solar cells and LED technology — basically renewable energy to tackle the climate crisis — and we were very dismayed to realize that while MIT and other universities are fighting climate change with one hand (by paying Ben and I to do research), they are really feeding it with the other hand investing hundreds of millions of dollars a year in the fossil fuel industry. Basically this fundamental business package is scientifically incompatible with the science of climate change mitigation, and it does a lot of bad things along the way. And then we were part of this snowball effect that Ben described — this roll-out of divestment campaigns around the country — that highlighted this incompatibility.
Quirke: Ben, you mentioned in your interview with Lulu the concept of stranded assets, which concerns the current fossil fuel reserves that humanity has. As we’ve learned from multiple contributors in the Forum, to keep warming within around 2°C, we can only emit about a trillion tons of carbon, and we have already emitted a little over half of that. And yet our reserves are far more vast than a trillion tons. That is the concept of stranded assets correct? These assets are currently valued on the presumption that they are going to be burned and emitted correct? And if they are not burnt and emitted, they are “stranded.”
Franta: Correct. And there is an interesting combination of different motivations for doing something regarding divestment that relates to the stranded assets concept. There is the ethical argument that it’s not right to invest in these companies or not socially responsible to do so anymore, and then there is this financial argument through stranded assets. Now the interesting part is that these arguments are essentially mutually reinforcing, because the more people move on the moral argument, the more likely that these assets really will be stranded. And that reinforces the financial argument. And the more these assets are stranded, the easier it is to move on the moral arguments as well.
Quirke: Yes, because the prerequisite to the assets being stranded is that there’s some successful climate change mitigation. I mean, if there is no successful global mitigation policy, then the assets are not going to be stranded. But that raises an issue regarding the possible limitations of this movement: Even MIT, with its multi-billion dollar endowment… you are only talking about a market influence of so much. Also, I should mention that the size of the reserves of companies like Exxon, which is the largest private oil company in the world, are just a fraction of the reserves held by countries like Russia and a few other nations. These nations have massive reserves. You can’t divest in Russia. So what do you say to the criticism of the divestment movement that it is just symbolic, feckless, and idealistic campaign — just a bunch of young students?
Franta: People do often say this is symbolic. Now this is essentially a rhetorical argument dressed up like a substantive one. We know every day that we do politics, [and] we know from history, that symbols do have a huge impact on politics, have a huge impact on how people think about problems. And politics has a huge impact on economics. So we know very clearly that a direct change on institutional norms or social norms – what people consider to be acceptable behavior and unacceptable behavior – those things have an ultimate effect on economics through energy policy.
Supran: What I would say is that we have to be pretty idealistic if we hope to tackle climate change. I think there is often this false premise that we can somehow operate within the boundaries of business as usual — no possibility of any form of risk in any way — and yet we are going to tackle a challenge of a magnitude, scale and urgency that humanity has never faced since we have been in existence. I think frankly the science itself is quixotic; it is extremely ambitious, and that might be why young people like us, who perhaps are more focused on the science and less tied up with the financial considerations, are more inclined to take action. I think Ben will also admit that we are operating on a very ambitious scale, but that’s what science demands.
So really what divestment does is calls on world leaders inside science and technology to stand with science and with the institutions of their students, and rise to this challenge which certainly is extremely large. I think the other point — you mentioned that not all the reserves are controlled by private corporations from which we can divest — that is really the other issue that Ben alluded to, which is that for a lot of these companies (you mentioned Exxon specifically), we have data to prove that as little as about 2 years ago, Exxon was actively funding climate change deniers about a mile and a half from where I am sitting here at MIT. So when organizations like MIT are investing in companies that are actively undermining the very science for which we stand, that’s a big deal. That is really the moral side of things that Ben talked about.
Quirke: The point on symbolism reminds me of the quote by Naomi Oreskes, which Lulu introduced her article with: “Symbols matter, because they signal our intent, and they invite other people to join in our intent.”
And in response to Geoffrey: Yes, Exxon was playing games with the science just a few years ago. Though correct me if I am wrong, but under the leadership of its new CEO, Rex Tillerson, that is no longer the case. (Being from Houston, I kind of follow the official positions of the major oil and gas companies on climate change; and you’d actually be surprised how frank many oil companies are. Even Rex Tillerson is not doubting the science. He is just saying don’t do cap and trade; basically if we are going to mitigate, put a price on it — that’s his position. And that makes it easier for Exxon. Shell and Statoil ASA, among others, are also pretty frank about what they see as a need for a carbon price.) That being said, with Koch Industries and many coal companies, there are still games being played there. But you would be surprised just how truly untenable certain early positions held by these companies were, and how energy companies are actually shifting now. But again, that has not been seen in the coal industry for the most part, but utilities that use coal are pretty frank.
And this brings me to another oft-heard criticism of the divestment movement: Rather than advocating for divestment from these companies, why not instead advocate for a policy (like cap-and-trade or a carbon price), because companies are like: “Don’t hate the player, hate the game. You set the rules; we’ll make money.” That is David Hone’s argument, because of these stranded assets conundrum, you just put a price on carbon, and we will teach the world how to capture and sequester carbon emissions. And you then don’t have to tell these countries to leave their fossil fuel assets in the ground. That was a prominent counter-argument in MIT’s debate on divestment; that is, go advocate for a real policy. What do you say to that criticism?
Franta: You know, for a long time we have had policy ideas on how to deal with this problem, and of course one of the preferred solutions is to simply to try to calculate what the damages are due to emissions and come up with a Pigovian tax. That makes a lot of sense: it is economically efficient, and it is market based; we like that. The problem with that, at least for the last few decades, is that we haven’t had the political will or the pressure to actually do this. So it is not enough to say, “here is the solution” without a way to generate the political will to do accomplish that solution.
Divestment campaigns tend to focus society’s attention on the problem. They do tend to isolate politically the worst actors in an industry, which makes them much more susceptible to government regulation. And there’s pretty good agreement across the board that that’s what we need for this problem [government regulation]. Policies like a carbon tax and actions like divestment are not mutually exclusive; they’re actually mutually reinforcing.
Supran: I think the first thing to say, and I can only speak for myself here, but we don’t hate these companies per se. I absolutely don’t hate the people who work in them. I find it an interesting analogy that someone said the other day. They described fossil fuels in a way as humanity’s embryonic fluid. The metaphor here is that for decades and centuries fossil fuels has sustained and fostered incredible growth and revolution in our lifestyle. They have been the fluids in the eggs that we have grown in. But at some point you need to break free of that shell — basically see the sunlight (or, use the sunlight) — because after some time this fluid becomes poisonous and it starts to harm you. Simply speaking as scientists, there’s not a hatred, it is just a scientific recognition of what is necessary to overcome the climate crisis. And to go back to what Ben was saying, and to answer your question about whether we should be advocating for policies, that really is where divestment comes from. It is the recognition from people like Ben and myself that work on renewable energy technology, but the thing that most people don’t realize is that we actually already have most of the technology we need to start tackling the climate crisis. There are, of course, huge hurdles to overcome, that’s the way technology is, but we have what we need to begin. The problem, and this is something that people have recognized for decades now, is that we simply need a price on carbon. Without it, it is just an unfair market playing field. Fossil fuels are subsidized between five and ten times more than renewables globally right now. So that is really where divestment comes in. It is a political tool that students, especially young people like ourselves, have at our disposal, for leveraging the megaphones that our institutions have to public and political opinion.
Quirke: And those institutions are the ones that are driving innovation — the nation’s university system; these aren’t just any institutions; they comprise a large portion of the nation’s innovation hubs.
Supran: That’s right, and what we are saying to our administration is that, if they are analytic about where the real problem as to tackling climate change are, you really need to put more energy behind things like divestment and political action. Because otherwise, the technologies that we are developing in the lab will never make it out in to the real world and actually make the difference that they were designed to.
Quirke: But you are asking them to take a moral stance, are you not?
Supran: Yes, so by taking a moral stance, it is really going beyond what scientists perhaps are usually comfortable with, and saying that this is the challenge of our generation — a singular crisis. And we are going to do whatever it takes to fix it. And that means working on the technology, the research, the education, but it also means calling out the bad actors. You are totally right that companies like Exxon and Shell and fossil fuel companies have certainly publicly moved away from the position of denying the reality of global climate change, and they are more sort of progressive in what they say. But it is a simple fact that still today that climate change deniers in Congress receive about four times more fossil fuel industry funding than non-deniers in Congress. And ust a few months ago Congress voted that climate change is not caused by humans. So when you have that kind of political environment, how can you hope to get a price on carbon and in turn develop the technologies that we need? So it is all part of, as Ben put it, a mutually reinforcing strategy. It is a false dichotomy that we often face: why do this when we can be doing that? We ought to be doing both.
Quirke: Speaking as someone from Houston, Texas, the oil and gas energy capital of the world, in a conservative state, there is only a nascent divestment movement on campuses in Texas. But after checking out #divest on Twitter, I must say, I was kind of impressed with the different universities having serious events and kind of causing some disruption (e.g., students filling up campus hallways; students getting arrested in presidents’ offices). And this is not just Berkeley and the more liberal schools one would expect. We are talking about the University of Maryland, Tulane, University of Michigan, etc. I was very impressed. How is the movement coming? It is very much a young movement, very much a student-led movement. I liked Ms. Liu’s quote, that this is coming from “a generation that is not yet politically powerful,” and yet they are the ones taking the lead on this. How is it coming across the nation, from your perspective, as leaders in the movement?
Franta: It is always a little bit like reading the tea leaves: How is it going versus how it could be going, what effect it will have. With a problem like this, what we are ultimately trying to do is have an impact that will matter in 50 years. So there is always a bit of imagination and interpretation required. With that being said, the way this movement has grown from a few isolated campaigns to thousands of campaigns globally, now coalescing into a social movement with its own values and its own willingness to accept certain degrees of risk, it’s impressive. For instance, you see students getting arrested at various universities. A few weeks ago 19 students at Yale were arrested for occupying the president’s office about divestment. The intensity of the movement is increasing quickly, and the numbers of the movement are increasing quickly, and you see real action on institutions actually doing it. So what was once considered to be crazy and inconceivable a few years ago when we first started it, is now looking almost inevitable, almost a matter of time. And I think you do see a lot of young people getting involved, because this is not exactly just an environmental issue now. Students aren’t exactly doing it because they care about the environment, they are doing it because they have been taught in classes that this is one of the biggest threats, climate change, to their future, and they know what the causes are. So they are going to take action to protect their future and things they care about. That is one of the reasons that I think this is really inevitable. As time goes on, it will become obvious to say that we shouldn’t fund companies that are engaged in climate change denial. We shouldn’t fund or support companies that are actively blocking legislation that would shift markets away from fossil fuels. And the third issue is that fossil fuel companies still invest, on the order of half a trillion dollars a year in developing new reserves. Now that inflates the carbon bubble further. And that creates an incentive not to actually leave those reserves stranded, because that is an economic hit. Their actions, at least those easily identifiable three things, all run counter to keeping climate change mitigated as much as possible and hopefully within 2° if we can.
Quirke: Geoffrey, I know you are an MIT Energy Fellow, so you are kind of at the forefront of the technology in terms of mitigation. You mentioned we have the technology now. If I could offer a rebuttal to that, David Hone, CO2 adviser for Shell, recently mentioned in the Forum how we need to recognize the challenge that we are facing. His position is, basically, when you are talking about running industrial burners or a steel mill, it is really hard to do that on just solar and wind. Germany is paying extremely high prices for energy today because they are trying to just go renewable, and they didn’t turn to nuclear, so they are having a challenge finding a reliable source for base-load power. I know of Prof. Sadoway’s work at MIT, and I recently listened to a presentation by him on liquid battery technology, and that all seems really cool in terms of getting over the hurdle of wind and solar being unreliable on a grid, but that technology is still in development. To highlight other challenging areas, when we were talking about jet travel, there is no alternative fuel for airline travel; there is no alternative fuel for heavy ocean transport. Mr. Hone was saying this is a huge technological challenge. What do you say to that?
Supran: You have to be careful with the way you put it, and I was careful to say that we have the technology to begin tackling this crisis, and I am not trying to parse words; I am trying to be scientifically accurate. Some of the issues you brought up, for example the intermittency and storage issue, transmission issues with solar and wind. Certainly they do become a big issue when you get above about 20 or 30% of your energy supply. But I think we are at maybe 1% here in the U.S. So for instance, when we went to the Moon, if we had said, we are not going to try until we have got everything in place, we just never would have done it. There is an element of throwing your cap over the wall and then you are forced to climb over and get it. So the thing is, we do have such great potential, as Germany is illustrating—to go from essentially zero to something quite significant with nothing new at all. So what we are really saying as scientists and technologists is that, how can we expect to have all the technological solutions in place — every single component — when there simply isn’t a market demand for it; when the government is funding subsidies 10 to 1 in terms of fossil fuels to renewables. It is really about creating the market incentives to build the technological innovation in places like MIT and Harvard. Regarding David Hone, I heard him speak at the UN Climate Talks in Lima in Peru. I was a youth delegate at those climate talks. He was really there saying, why should we divest when carbon capture and sequestration can deal with this problem.
Quirke: And carbon capture sequestration (CCS) is an exception to the rule of the stranded assets concept. The argument for CCS is that if we can capture and sequester the emissions from these fossil fuel reserves, then we can tap them; we can deal with the climate crisis yet avoid these assets being stranded.
Supran: Right. As far as I know that is the only exception. But of course there are still consequences, you still have massive ocean acidification, and impacts on organisms in that way. But aside from that. I think from a technological perspective, my impression is that carbon capture and sequestration is probably a much bigger gamble than solar or wind. It is not a proven technology at scale. I think we had one plant open recently in Canada at scale. It cost several billion dollars and now they are thinking of closing it because it is so uneconomical. Whereas we have incredible expansion in solar and wind worldwide, and incredible fall in price that just continues ever year.
And the other thing is, going back to how the movement is progressing globally. I think it is very exciting that young people are at the forefront, but I think it is also important to point out its not just a campaign of young people. Just a couple weeks ago the United Nations came out in favor of divestment. Ben pointed out to me that just today Prince Charles in the UK decided to divest. [Note: See recent decision by the Episcopal Church to divest.]
Quirke: Yeah, HSBC kind of posted up a warning to its investors, talking about stranded assets. They were warning investors of certain policies that would actually make them stranded.
Supran: One of the big announcements back in September was when the Rockefeller Brothers Fund, which is essentially the heir to the fortune of Exxon and Chevron and so on, decided to divest. What they have said since then is that they tried shareholder engagement, talking to their friends, sometimes family members involved in this business, and they were unable to shift the needle. The World Council of Churches has divested, that’s 590 million people, that is 8% of the world. It is a serious power to be reckoned with. I think it is important to emphasize that we don’t want to destroy these companies. We simply want fossil fuel companies to become energy companies. There are incredible profits from the energy revolution that we need, but we need them to be spending less than a fraction of one percent of their investments on the technologies of the future rather than technologies of the past.
[See full video of virtual session:]
Corrections: In the original publication, I wrote the following: “As we’ve learned from multiple contributors in the Forum, to keep warming within around 2°C, we can only emit about a billion tons of carbon.” I meant to say “we can only emit about a trillion tons of carbon.” Also, the organization 350.org was for a brief time mislabeled as 360.org in one instance. Additionaly, when Ben Franta was talking about how this new generation of students “knows what the causes are,” I incorrectly transcribed it as “know what the consequences are.” All errors have been corrected. -MQ