In collaboration with the Philomathean Society, Divest Andover hosted a panel discussion last Friday to explore the feasibility and realistic impact of divestment from fossil fuels on the environment.
Six experts in the fields of environmental science, finance and divestment sat on the panel. They were Head of School John Palfrey, who served as Special Assistant of the Environmental Protection Agency before coming to Andover, Shelly Alpern, Director of Social Research and Advocacy at Clean Yield Asset Management, Jisung Park ’04, Sense and Sustainability Director and Harvard Environmental Economics Fellow, Stephen Carter, Andover’s Chief Financial Officer, Randall Field, Executive Director of the MIT Energy Initiative, and Christopher Jones, Instructor in History.
All panelists agreed that if Andover were to divest, the direct financial impact on fossil fuel companies would be extremely small, for Andover’s endowment is comparatively tiny and most fossil fuel companies make money from sales, not stock price.
“Presumably, the main goal of divestment would have something to do with moving the dial on climate change in the longer run. The question is what proximate goals can arise from that. I think we should think about the fact that it might be one or two different effects: one operating through financial capital, and the other operating through the lever of social or cultural capital. I think we should be focusing the criteria of whether or not divestment is successful on the latter,” said Park.
The panelists said, however, that while divestment may not bring immediate economic results, the movement’s power lies in its ability to attract attention and put pressure on policy makers and the public relations departments of fossil fuel companies.
Alpern said, “You can talk of divestment, but students can’t lose sight of the fact that it is going to be other policy actions that actually reduce the demand for fossil fuels… It’s not either [public relations] or [economic consequences].”
“Trying to base the success of the Divestment movement on whether or not Andover does or does not divest from these 16 stocks would be the wrong way of going about it. The criteria should be how many minds did you impose, how many people did you get to care about this issue, how many extra tweets did you post? What kind of social capital did you accumulate in this process, not that you’ve affected the financial capital of these 16 companies,” said Park.
Carter suggested that rather than divestment, federal action to impose measures such as a significant carbon tax would create a more powerful incentive to stop purchasing fossil fuels such as gasoline and invest in alternative means of fuel.
Field added nuance to the idea that lawmakers were solely responsible for regulating fossil fuels by arguing that politicians are reflective of American public opinion. The real issue, he asserted, was a lack of citizen motivation to tackle climate change in their daily lives.
“We have to create a groundswell of demand by the people of the United States and other countries to get carbon policies in place, and to make it clear that we recognize that there is a sacrifice we need to make to make sure our future generations can continue to live on this planet,” said Field.
“I would like to see each of us make a commitment do something to reduce our carbon footprint. But the question is whether we believe that our commitment to divesting from these [fossil fuel companies] is more important than our commitment to need blind admission and a whole variety of other things,” said Palfrey. He named one of the school’s most pressing concerns about divestment: the potential toll it would take on Andover’s endowment.
“The endowment supports a lot of things that go on here, and when the donors gave the funds to the school, they gave them for the purpose of supporting education, not to make a social statement,” said Carter.
Palfrey said that divestment could risk “turning-off” alumni, potentially leading to a loss of donations, which makes up for a substantial percentage of Andover’s endowment.
Citing slavery as somewhat of a moral equivalent to fossil fuels, however, Jones said, “Slavery provides some very interesting parallels to the energy sector. Slavery in the developing world of the 17th century was the foundation for modern capitalism, in the same way that we refer to the energy business today. On a moral basis, I think we need to ask more complicated and nuanced questions.”
Alpern also countered by presenting a study her company conducted on the effects of a theoretical portfolio in which it divested from fossil fuel companies, resulting in “a minute impact… on the actual portfolio.”
Haonan Li ’13, one of the five co-founders of the Divest Andover movement and Former Co-President of Philo said, “The audience should have taken away from this forum that climate change is a serious issue, that divestment can create the social change necessary for the legislative change, that divestment isn’t a simple matter and that divestment might not be the most feasible option.”