Climate change is the challenge that will define humanity’s future. Devastating droughts and floods will be more common, and the developing world will be disproportionately harmed. Let me get something straight: global warming is undoubtedly anthropogenic. Those who deny the existence of climate change only waste time better spent on necessary decision-making to cut emissions and ameliorate the upcoming impacts. Ideological environmentalists, however, do just as much to stymie productive discussion. Addressing climate change is not—and should not be—equivalent to fabricating an “evil” other side to blame, for doing so oversimplifies a complex and multi-industry sector.
It’s hard to miss the presence of GU Fossil Free on campus, a student group that agitates for the divestment of the university’s endowment from fossil fuel companies. The group is right about the need to combat climate change, but is going about it all wrong. Forcing Georgetown to divest will not reduce carbon emissions and will not help the world develop a cleaner energy matrix. This is because the levelized cost of electricity of solar photovoltaic is twice that of coal and over eight times that of natural gas in the United States. This is because wind and solar energy are unreliable, not dispatchable, and not storable at grid-level, and if you don’t want rolling blackouts, you want stable power generation. The market demonstrates confidence in “cleantech” company stocks if there is due reason for confidence, not the other way around.
GU Fossil Free admits divestment likely won’t make a financial dent on fossil fuel companies, nor do they have specific alternate stocks or bonds in which the endowment should invest. Rather, they go for the low-hanging fruit, framing divestment as a “moral imperative.” Wind and solar are good, coal is complicit in “destructive behaviors.”
Fossil fuel companies are far from models of corporate responsibility—but their historical human rights and labor violations should not be convoluted with carbon emissions, because it is intellectually and factually lazy to blame the complex problem of carbon emissions on them.
First, fossil fuel companies don’t just shut down because of public opinion. They stop producing if price indices fall below cost of production. Divesting from fossil fuel companies is the same idea that blocking Keystone XL will stop heavy and sour crude oil production in the Canadian tar sands. FYI—it won’t. It’s already being produced, and will just get moved via another, more environmentally risky route if Keystone XL isn’t approved.
Second, wind and solar are booming in the U.S., but not because the energy sector has suddenly developed a conscience. Instead, a web of government incentives like regulations and tax credits are making these technologies more financially attractive. Ironically, the overwhelming majority of wind projects are in Republican-held districts.
The world will move to more cleantech, but it won’t just be because of the “clean” in cleantech. Only some kind of financial incentive or penalty, like a carbon tax or price, will make cleantech viable—moral opprobrium alone won’t do the trick. This will be because cleantech has real benefits right now: zero fuel costs, role as a price hedge against volatile oil and natural gas prices, and lack of dependence on geopolitically unstable regions of the world.
Finally, fossil fuel companies don’t burn fossil fuels (for the most part). Consumers do. Over 30 percent of carbon emissions comes from electricity generation in the United States; the next 28 percent comes from transportation. In fact, the only reason power generators and utilities began using renewable energy was because they were required by law to do so by the 1978 Public Utilities Regulatory Policy Act (PURPA). Fossil fuel companies respond to demand for fossil fuels that has nothing to do with whatever devious mechanisms GU Fossil Free charges fossil fuel companies with using. Burning fossil fuels is not inherently good or evil, and framing it as such is ludicrous.
In a nod to financial realism, GU Fossil Free writes in its proposal that its real goal is not the instant elimination of fossil fuel companies, but instead a “discursive shift” in the energy sector. They see divestment is the “optimal strategy” for bringing about that shift. What GU Fossil Free fails to realize is that in the present, apart from token climate deniers, no one seriously doubts the merits of addressing climate change. The discourse is over the price and technological reach of current cleantech. The discourse is on how to decouple the current revenue structure that discourages energy efficiency by paying utilities by unit of energy generated.
This is not to say that social responsibility does not influence the calculus of many cleantech companies. It is to say, however, that they succeed because their projects are financially successful and stable. In order to continue fostering a greener world, the next generation of policy makers and business leaders need to understand how the energy sector works, not rebuke the entire system.