John always tells me to write short, sweet, and clear. Knowing that his advice is supreme on these matters, I’ll try to write mini-posts in between the bigger ones. But… not this time – the topic is too good.
Work smarter, not (just) harder.
Today I got an email from Bill McKibben, founder of 350.org. (350 parts per million, the concentration of CO2 considered a “safe upper limit” for Earth, by NASA scientists James Hansen. We’re soaring past 415ppm.) In preparation for the global climate strike, Bill wants to share an important idea: divesting from fossil fuels may be our greatest lever.
I’ll pluck paragraphs to quote, but please read the whole article; this is an extremely important and practical idea for addressing the crisis. And it’s well written… the first sentence sounds fairly Baezian.
I’m skilled at eluding the fetal crouch of despair—because I’ve been working on climate change for thirty years, I’ve learned to parcel out my angst, to keep my distress under control. But, in the past few months, I’ve more often found myself awake at night with true fear-for-your-kids anguish. This spring, we set another high mark for carbon dioxide in the atmosphere: four hundred and fifteen parts per million, higher than it has been in many millions of years. The summer began with the hottest June ever recorded, and then July became the hottest month ever recorded. The United Kingdom, France, and Germany, which have some of the world’s oldest weather records, all hit new high temperatures, and then the heat moved north, until most of Greenland was melting and immense Siberian wildfires were sending great clouds of carbon skyward. At the beginning of September, Hurricane Dorian stalled above the Bahamas, where it unleashed what one meteorologist called “the longest siege of violent, destructive weather ever observed” on our planet.
Bill emphasizes that change has moved far too slowly, of course. But he’s spent the past week with Greta Thunberg and many other activists, and one can tell that he really is heartened.
It seems that there are finally enough people to make an impact… what if there were an additional lever to pull, one that could work both quickly and globally?
The answer: money.
Today it is large corporations which have the greatest power over daily life, and they are far more susceptible to pressure and change then the insulated bureaucracies of governments.
Thankfully Bill and many others knew this years ago, and started a divestment campaign of breathtaking magnitude:
Seven years ago, 350.org helped launch a global movement to persuade the managers of college endowments, pension funds, and other large pots of money to sell their stock in fossil-fuel companies. It has become the largest such campaign in history: funds worth more than eleven trillion dollars have divested some or all of their fossil-fuel holdings.
And it has been effective: when Peabody Energy, the largest American coal company, filed for bankruptcy, in 2016, it cited divestment as one of the pressures weighing on its business, and, this year, Shell called divestment a “material adverse effect” on its performance.
The movement is only growing, accelerating, and setting its sights on the big gorillas. The main sectors: banking, asset management, and insurance.
Consider a bank like, say, JPMorgan Chase, which is America’s largest bank and the world’s most valuable by market capitalization. In the three years since the end of the Paris climate talks, Chase has reportedly committed 196 billion dollars in financing for the fossil-fuel industry, much of it to fund extreme new ventures: ultra-deep-sea drilling, Arctic oil extraction, and so on. In each of those years, ExxonMobil, by contrast, spent less than 3 billion dollars on exploration, research, and development. $196B is larger than the market value of BP; it dwarfs that of the coal companies or the frackers. By this measure, Jamie Dimon, the C.E.O. of JPMorgan Chase, is an oil, coal, and gas baron almost without peer.
But here’s the thing: fossil-fuel financing accounts for only about 7% of Chase’s lending and underwriting. The bank lends to everyone else, too—to people who build bowling alleys and beach houses and breweries. And, if the world were to switch decisively to solar and wind power, Chase would lend to renewable-energy companies, too. Indeed, it already does, though on a much smaller scale… It’s possible to imagine these industries, given that the world is now in existential danger, quickly jettisoning their fossil-fuel business. It’s not easy to imagine—capitalism is not noted for surrendering sources of revenue. But, then, the Arctic ice sheet is not noted for melting.
Bill elucidates the fact that it is critical to effect the divestment of giants like Chase, Blackrock, and Chubb. Even if these targets are quite hard, this method of action applies to every aspect of the economy, and empowers every single individual (more below). If the total divestment is spread over a decade, it can be done without serious economic instability. And if done well, it will spur tremendous growth in the renewable energy sector and ecological economy in general, as public consciousness opens up to these ideas on a large scale.
I want to keep giving quotes, but you can read it. (If anyone is out of free articles for New Yorker, I can send a text file.) I’ll contribute a few of my own thoughts, expanding on stuff implicit in the article; and then this topic can be continued with another post.
Divesting is a truly powerful lever, for several reasons.
First, money talks. Many people who have been misled by modern society have the following equation in their heads:
money = value
These people, being overwhelmed with social complexity, have lifted the “burden” of large-scale ethics off of their shoulders and into a blind faith in the economic system – thinking “well, if enough people have the right idea, then capitalism will surely head in the right direction.”
Of course, after not too long, we find that this is not the case. But their thinking has not changed, and we need a way to communicate with them. While it may feel strange and wrong to reformulate the message from “ethical imperative” to “financial risk”, this is the way to get through to many people in powerful places. When you read about success stories, it is effective, especially considering all the time spent mired in anthropogenic-warming skepticism.
Second, social pressure is now a real force in the world. We can bend competition to our will: incentivize companies to better practices, and when one capitulates, the others in that sphere follow. It has happened many times, and the current is only getting stronger.
Though if we want to fry bigger fish than no-straws, we need to sharpen our collective tactics. It will of course be more systematic and penetrating than shaming companies on Twitter. The article includes great examples of this; it would be awesome to discuss more ideas in the comments.
Third, everyone can help this way, directly and significantly. Everyone has a bank account. It is not difficult, nor seriously detrimental, to switch to a credit union. The divestment campaign can be significantly accelerated by a movement of concerned citizens making this transition.
(My family uses Chase. When I was spending quality time back home, I asked my parents how the value of a bank is anything more than secure money storage. The main thing they mentioned was loans – but they admitted that the biggest and best loan they ever took was through a credit union. The reasons simply did not add up. I plan to show them this article, and I’ll try to have an earnest conversation with them. I really hope they understand, because I know they are rational and good people.)
It’s all but impossible for most of us to stop using fossil fuels immediately, especially since, in many places, the fossil-fuel and utility industries have made it difficult and expensive to install solar panels on your roof. But it’s both simple and powerful to switch your bank account: local credit unions and small-town banks are unlikely to be invested in fossil fuels, and Beneficial State Bank and Amalgamated Bank bring fossil-free services to the West and East Coasts, respectively, while Aspiration Bank offers them online. (And they’re all connected to A.T.M.s.)
This all could, in fact, become one of the final great campaigns of the climate movement—a way to focus the concerted power of any person, city, and institution with a bank account, a retirement fund, or an insurance policy on the handful of institutions that could actually change the game. We are indeed in a climate moment—people’s fear is turning into anger, and that anger could turn fast and hard on the financiers. If it did, it wouldn’t end the climate crisis: we still have to pass the laws that would actually cut the emissions, and build out the wind farms and solar panels. Financial institutions can help with that work, but their main usefulness lies in helping to break the power of the fossil-fuel companies.
The economy is far more responsive to changes in the collective ethos than the government. This is how people can directly express their values every day, with every bit of earning they have. We are recognizing that the public mindset is changing, and we can now take heart and leverage society in the right direction.
Conjecture The critical science of our time has the form:
This is why John Baez brought together so many capable people for the Azimuth Project. I hope that we can connect with the new momentum and coordinate on something great. Even in just the last post there were some really good ideas. I really look forward to hearing more. Thanks.