The Stanford Daily Editor Hannah Knowles was right to lead her report on February’s meeting of the Stanford Board of Trustees with the news that a Board decision on fossil fuel divestment could be expected soon. It is the most important long-term action the Board can take.
The direction of climate change is known to the point of stupefaction: widespread and long-term environmental disruption —flooded farmland, withering drought, lost fisheries, storms that destroy infrastructure, lost wages, lost productivity — all resulting in economic impoverishment, human suffering, and political destabilization — arguably already previewing as extended drought in Syria joined with political and economic abuse to increase the nation’s poverty and desperation, resulting in war and a massive refugee crisis. It is a painful future to be rigorously avoided.
But how? On the Farm, Stanford has undertaken substantial efficiencies through the SESI program. These are steps that institutions and individuals around the globe must take with similar vigor, according to their own scope. But such worthwhile steps remain localized and, in Stanford’s case, dwarfed by the direction of a $22 billion investment portfolio. The engines of climate change run through lives and economies around the globe, and it will take global action to stem their ruin. By putting money into oil and gas development, the Stanford endowment helps drive those engines. Instead, it can steer them toward clean energy and improved human well-being.
When the Board of two years ago voted to divest from coal, the National Mining Association claimed that Stanford’s divestment would be useless, a $19 billion drop in a $60 trillion bucket. Resistance, they effectively said, was futile. But they were wrong. Since then, as people around the globe have pursued clean alternatives, mining giant Arch Coal has declared bankruptcy, and as I type, Peabody is contemplating a similar declaration. The lesson is that we can motivate the move to clean energy. Stanford’s divestment, Stanford’s voice, does matter.
Stanford’s voice matters because it contributes to and generates other voices. The whole world spoke emphatically last December in favor of setting a goal of stopping climate change at 1.5-2 degrees Celsius. That is not an easy reach, and now nations see the U.S. wavering, with lawsuits and a Supreme Court decision braking our efforts to cut greenhouse emissions. If U.S. leadership fails, the global efforts are likely to fritter away. Climate havoc will rule the day. Alternatively, Stanford can make the strong statement that will help other universities, businesses, and agencies support and pursue a more sustainable, prosperous future, and help enable the US and the world to make those efforts.
Moving money out of fossil fuels and into clean energy will help create more of that clean energy. The switch cannot be made too soon. The Environmental Protection Agency (EPA) projections from our current greenhouse status show an absolute minimum global rise from 1900 to 2100 of .5 °C, while more trending scenarios show a climb of 3-12 °C depending on the vigor of our reduction in greenhouse emissions. These are all hostile conditions.
Boards regularly retreat into a narrow and inaccurate vision of their effect as fiscal only. But even if we don’t care about human well-being, fossil fuels are a bad bet these days. Last year California’s PERS/STRS oil and gas portfolio lost 28%, some $5 billion. Stanford doesn’t reveal details, but in the same time period, its total portfolio lost 10% relative to its growth the year before (Stanford Mgmt. Co. Report, 2014 and 2015). That was just one bad year, but earlier studies that had repeatedly shown that fossil free and fossilized portfolios perform comparably were updated to show that fossil free portfolios have yielded higher returns over the last five year period. Given the absence of fiscal benefit and the known destructive qualities of fossil fuels, retaining fossil fuel investments shows a destructive inertia and short-sightedness.
We must care about human well-being. The Board knows this. Financial aid was also on their February agenda. In his current Stanford Magazine column, President Hennessy lists impressive financial aid statistics, which I appreciate from personal experience. But that financial aid is not fossil fuel dependent, nor is finance the only measure of human value. Donors should be able to give and know that they are relieving student debt without simultaneously undermining their longer future.
The Board should divest from fossil fuel extraction.
– Dan Greaney, ’79
Dan Greaney is a member of Fossil Free Stanford Alumni. His book The Worst Generation is due out this September.
Contact Dan Greaney at dgreaney140 ‘at’ gmail.com