While delegates in Paris last month began to hash out an agreement to reduce the impact of climate change, tens of thousands of people, many of whom were students, convened on Parliament Hill to demand strong commitment from the federal government on tackling climate change.
In front of a large crowd on the steps of Parliament, a spokesperson from the Canadian Federation of Students (CFS) called for the battle against climate change to be fought on post-secondary campuses through the fossil fuel divestment movement.
“On more than 20 campuses across this country, students are actively lobbying to divest from the fossil fuel industry and invest in green economies,” said CFS national treasurer Anna Dubinski to a cheering crowd on Nov. 27. She is part of the pro-divestment student group at Dalhousie University.
Similar to how individuals generate income through stocks, bonds, and other investments such as mutual funds, 34 schools, including Carleton University, the University of Toronto (U of T), Queen’s University, and Dalhousie invest in fossil fuel companies through a variety of financial portfolios.
The goal of the divestment movement is to starve out fossil fuel companies of investment funds, thus making it harder for polluting energy companies to operate or grow.
But the debate over whether divestment is an effective strategy to combat carbon pollution has pitted some academics against the vanguard of the movement: students.
Academics and public figures such as former Quebec Premier Jean Charest have openly criticized the movement. Nevertheless, the student-led movement doesn’t appear to be dissipating.
“If universities are smart, they’ll get out now,” said Ben Donato-Woodger, a student at Ryerson University who is a campaign leader for Toronto350.org, a pro-divestment organization working on campuses in the city. “If we’re going to fulfill the Paris agreement on climate change, we’re going to have to leave 85 per cent of [remaining] fossil fuels in the ground, which is going to devastate the price of those investments at universities.”
Last September, U.S.-based consulting firm Arabella Advisors reported some 436 institutions in 43 countries divested $2.6 trillion from fossil fuel companies, up from the previous year of $50 billion in assets moved away from investment.
Queen’s, Dalhousie, and McGill University divestment groups have forced school administrators to debate the issue at committees and meetings. Concordia University and U of T agreed to partially divest in 2014 and 2015.
Amanda Harvey-Sanchez, a Toronto350.org campaign leader at U of T, said even a partial divestment is a step in the right direction.
“The future is in renewable energy,” she said. “When a big university like [the University of Toronto] takes the initiative, it makes it easier for other universities to follow suit.”
But University of British Columbia (UBC) economics professor Werner Antweiler said he believes divestment is a bad economic idea.
“It’s meant primarily to raise awareness without making any profound change in what the companies actually do,” Antweiler said. “Quite frankly, divestment misses the target.”
One of the most vocal critics of the divestment movement, Antweiler said fossil fuel companies can’t bear the entire blame for carbon pollution.
“We cannot blame these companies for providing us with commodities that we demand. We too are the villains, who constantly fill our cars with gas,” he said.
Antweiler argued that the divestment movement packs little punch against fossil fuel companies. Eliminating energy sector investments from a Canada-only investment portfolio doesn’t have a profound long-term impact due to natural re-adjustments of the energy industry to the overall economy.
UBC holds about $10.2 million in stocks in oil and gas companies, which Antweiler wrote in his blog is a tiny amount directly held in the oil and gas industry. Most of UBC’s roughly $1 billion in equities is in pooled funds, and the school has no control over which companies receive its money.
To divest out of these funds, Antweiler wrote, would limit UBC’s options available to provide the degree of diversification needed for its $1.2-billion endowment. UBC has opted to incorporate environmental, social, and governance factors in its investment choices instead.
The divestment movement, though largely grassroots, is supported by the CFS, the largest student organization in the country. Petitions have been a tool effective at U of T and Concordia, but not so much elsewhere.
In 2013, the Ottawa chapter of 350.org attempted to petition Carleton’s board of governors to freeze new investments in fossilfuel companies, such as Enbridge and TransCanada. The petition didn’t receive enough signatures to bring forth a motion of discussion.
In terms of tactics, the anti-apartheid movement of the 1980s was the forerunner to the current fossil fuel divestment movement. Carleton, among hundreds of schools worldwide, removed South African products from sale on campus, and pressured school administrators to stop investing in companies from the country.
“Divestment removes fossil fuel companies’ social licence to operate [in] the same way that the divestment movement in the 1980s meant to remove the social licence of African apartheid. The movement is about shifting priorities,” said Anne-Marie Roy, the national deputy chairperson of the CFS.
A study out of the University of California in Los Angeles found, however, that university and state divestment movements had no discernable financial effect on the South African companies that were being divested. When investors left, others took their place, it found.
But like how anti-apartheid activists made their stance for freedom clear on university campuses, Harvey-Sanchez said the fossil fuel divestment movement is “really more about the symbolic act of divesting,” admitting there may not be significant carbon emission reduction.
Tessa Hebb, the director of the Carleton University Centre for Community Innovation (CUCCI), said symbolism doesn’t play in the real world.
“Even if every university in the world divests, the impact on the oil and gas sector is not significant enough for it to be an effective tool,” she said. “The symbolism against the change that has to be made, particularly that of university holdings, is too small.”
Hebb added that if universities were to divest, other investors will take their place.
“You divest from a company by selling your stock, and that by definition means that somebody else buys it,” she said.
Ben Richardson, a professor at the University of Tasmania who was at Carleton last October for a panel discussion with Hebb on climate change and investment, said there are a lot of responsibilities schools may have to forfeit in order to divest.
“We have to remember that universities also manage other people’s money, particularly that of the faculty pension plan and endowment money,” he said. “They have legal responsibilities and can’t just throw that money wherever they want.”
Richardson noted, however, that oil and gas stocks aren’t going to be as profitable as it is now if Canada transitions to low-carbon economies. He recommended universities invest in renewable energy companies to avoid risking money for pension funds.
Hebb and Antweiler propose carbon cap and trade systems as a way to reduce pollution effectively. Cap and trade involves placing a limit on emissions, while at the same time making businesses buy allowances to pollute. By making pollution a commodity, competing businesses have incentive to reduce their carbon footprint in order to save money.
“It’s much more effective to engage those companies and put pressure on them to make changes,” Hebb said.
While Hebb, Antweiler, and other thinkers are skeptical as to whether fossil fuel divestment can significantly impact carbon pollution, there are no signs the criticism has stopped the movement from growing.
“Students are not apathetic, young people are not lazy. We are at the forefront of the climate change movement,” Dubinski said, as her and other students stood on Parliament Hill in freezing temperatures.
