According to Jeremy Farrar, head of the Wellcome Trust, the Guardian’s “Keep in the Ground” campaign to promote divestment from fossil fuel companies is merely a “grand gesture” that can be made only once.
At one level, he is right. The financial impact of the Wellcome Trust selling off its shares in fossil fuel companies would be negligible. But as a social and political gesture, the impact would be huge. The Wellcome Trust a prestigious and highly respected scientific and charitable organisation. It works to improve health and serve humanity. Its voice carries weight and through divestment, it would be sending a strong signal to governments and the general public that continued investment in fossil fuel companies is simply not compatible with the urgent need to reduce greenhouse gas emissions.
But the implications of divestment are profound and while “gesture politics” is important, it is insufficient on its own. After all, much of modern civilisation is powered by and built on fossil fuel, and it is used to make plastics, steel, and fertiliser. In addition, it is argued that fossil fuels are essential for uplifting billions of people out of poverty.
So while the act of divestment is relatively straightforward, determining what we do next is more complex. Clearly divestment is not just a “green” campaign, but one that poses major challenges for how we conceptualise and run our economies, and how we make better use of public and private funds to catalyse a great transition within and across societies. The International Monetary Fund (IMF) estimated that public subsidisation of fossil fuels amounts to about $5.3trn (6.5% of global GDP) in 2015. This is clearly mad.
Instead of legitimising the interests of companies that seek to prolong our dependence on dirty energy, we should be investing in micro (household and community) renewable energy systems that would help democratise our energy systems but crucially, better meet the needs of people in developing countries. Viable examples of micro-renewable energy innovations exist – but we need major public investment to take them to scale. We must not however be seduced by exaggerated and unsafe claims about CCS allowing us to continue burning fossil fuels.
Understanding the scale and urgency of greenhouse gas reductions is key: we only have a few years to prevent catastrophic climate change, and even this is not guaranteed. Put another way, the challenge we face is considerable and incompatible with the industry’s plans to prolong the burning of fossil fuels for as long as possible.
The argument that it is better to ‘engage’ with fossil fuel companies as shareholders is flawed. Shareholder action has been largely ignored by fossil fuel companies. Just look at BP: after spending billions of dollars on its “beyond petroleum” campaign, to convince the world that it was undergoing transformative change and going green, it has since closed down “BP solar” and sold off its US$3.1bn wind energy business. The same with Shell, which has reduced investments in renewable energy development and is pressing ahead with the world’s deepest offshore oil well in the Gulf of Mexico, and drilling in the Arctic.
In any case, the idea that it is only possible to influence fossil fuel companies if you are a shareholder is profoundly anti-democratic. Shouldn’t an important, charitable and scientifically eminent institution like the Wellcome Trust be able to influence the fossil fuel industry in the public interest without being an investor?
Crucially, divestment delegitimises the impact of hundreds of millions of dollars spent every year by fossil fuel companies to undermine climate science, misinform the public and influence governments (see here, here, here, and here). In this sense, what is more important than engagement with fossil fuel companies is the need to lobby governments to implement policies and regulations that will properly protect the planet and serve in the wider public interest.
The argument that divestment will deny poor countries, and deny them the opportunity to develop is similarly specious. If we are really concerned for the billions of people who live in poverty, we would do better to dismantle the prevailing neoliberal form of globalisation that has perpetuated poverty, widened inequality and institutionalised an array of market and regulatory failures that deepen inequity and inhibit poverty alleviation and allow ecological degradation to continue to go unchecked. Energy is an important ingredient for poverty eradication, but it’s unhelpful to offer dirty energy to the world’s poor when they are already, and will continue to be, hit hardest by climate change. If we exceed two degrees of global warming, global poverty levels will rise, not diminish.
Two centuries ago, this country saw similar arguments rage over the abolition of slavery. The slave trade was essentially a trade in energy – albeit in the form of humans who were put to work on plantations. It too was a trade that catalysed economic growth and wealth creation across many parts of the world. The decision by parliament to pass the Abolition Act in 1807 took place at the height of the slave-based economy, in spite of the fact that it would be economically damaging. But moral and social considerations took precedence.
Today we stand at another moral and economic crossroads that involves the way we harness and use energy. While one shouldn’t draw inappropriate parallels between ‘slave fuel’ and ‘fossil fuel’, the current divestment movement is similar to the abolition movement in seeking to effect change from the bottom-up. Universities, scientific institutions, public health organisations, religious bodies and ordinary individuals are at the forefront of catalysing the socio-political and cultural shifts that will be required to protect our fragile and finite planet and safeguard the health of current and future generations. The Wellcome Trust should be part of the vanguard of this growing movement.
This blog is based on a structured and detailed examination of the arguments used by Jeremy Farrar (Wellcome Trust) and Charlie Jeffery (University of Edinburgh) to support continued investment in fossil fuel companies and ‘stakeholder engagement’. This briefing is available here.
The case for divestment by the health community has also been supported by an Editorial in The BMJ, published 25 June 2015.
If you are a health professional of any kind, or a health academic, you can support and join the divestment movement by adding your name to this open letter to the Wellcome Trust, hosted by The Guardian.