Madison, WI – The movement to divest university endowments from fossil fuels continues to gain steam. Recently the student government at UW-Madison (the Associated Students of Madison, or ASM) overwhelmingly passed a resolution calling on the UW Foundation to divest from the top 200 fossil fuel companies over a five-year period.
The ASM resolution cannot force the university to divest, as the students do not have direct control over the funds. However, it sends a clear message: students do not want university money going to companies whose business model depends on destroying the planet’s climate.
The group of students that brought the divestment resolution to ASM, the Fossil Free UW Coalition, doesn’t plan to stop now. To keep the pressure on, they collaborated with the Overpass Light Brigade to bring three pro-divestment messages to the university’s campus, beginning at the top of Bascom Hill and ending at Science Hall.
The divestment push isn’t confined to Madison. At UW-Oshkosh, the Faculty Senate recently called on their foundation to divest, and their student governance body (the Oshkosh Students Association) also joined the call, asking the foundation to explore its divestment options in detail. There are also active divestment campaigns at UW La Crosse, Steven’s Point, Green Bay, Eau Claire, and River Falls. Around the world, groups at about 380 campuses are pushing for divestment, in a campaign spearheaded by 350.org’s Bill McKibben called Go Fossil Free.
The goal is to speed the transition away from fossil fuels. When universities and other institutions choose to shift their investment portfolios away from the top fossil fuel companies, they chip away at these companies’ credibility as sound investments and good corporate citizens. This can reduce the amount of money these firms have to work with, and also set the stage for broader policy reforms.
Universities that divest signal to other investors that these companies’ asset aren’t worth as much as the market thinks they are. Current stock prices assume these firms will extract and sell all of their fossil fuel reserves. However, to avoid catastrophic climate change, three-quarters of these reserves need to stay in the ground. The result is that these assets are currently overvalued, creating a “carbon bubble.” Someday this bubble will burst. By divesting, universities protect themselves from this risk. They also start to let the air out of the bubble, making it more likely that other investors will choose to divest as well.
The divestment campaign is already having an effect. For example, recently Bloomberg LP, a major financial information firm, launched a tool that allows investors to measure the risk of “unburnable carbon assets.”
History shows that divestment campaigns have been successful before. In fact, a recent study by Oxford University’s Stranded Assets Programme concluded:
In almost every divestment campaign we reviewed from adult services to Darfur, from tobacco to South Africa, divestment campaigns were successful in lobbying for restrictive legislation.
The results of the international fossil fuel divestment campaign are yet to be seen. However, the fact that many groups like the Fossil Free UW Coalition are working so hard to push their schools to divest is a hopeful sign. Let’s keep the pressure on UW-Madison and other universities to do the right thing.
You can view more photos from the Light Brigade action here.