Vermont’s Middlebury College announced on Wednesday that it was divesting its holdings in fossil fuel companies. Given that more than a thousand institutions with endowments totaling more than $8tn have made similar pledges, it might not seem so newsworthy – but Middlebury was one of the first to reverse course. Six years ago the college flatly rejected divestment, and the shift makes it clear why big oil’s purchase on our economy and our society is eroding.
Much of the explanation, of course, stems from local factors, and since I’m employed there I’ve had a firsthand view. The college’s students never gave up, passing on the activist torch to each new entering freshman class – indeed, some of the students who pioneered the fight were on hand for today’s announcement. And along the way the college got a new president: religion scholar Laurie Patton proved an adept conciliator able to help her institution move.
But the background has also changed over those six years, in ways that made Middlebury’s board of trustees, many of them drawn from the financial world, more likely to divest – and that will likely make the college a bellwether even for other rich institutions in the orbit of Wall Street.
One, of course, is that the climate crisis has deepened enormously. In the years since the college first rejected divestment, the world has suffered through the four hottest years on record. We’ve seen hurricane after firestorm after drought; watched the decimation of coral and the steady rise of the sea. Climate justice has gone from an issue to the issue, especially for younger humans.
But something else happened too: the price of a solar panel fell by 70% or 80%. Six years ago you could still argue, just, that renewable energy might not be able to take up the slack. Now it’s the cheapest way to produce electrons across most of the globe – and since the cost of battery storage is plummeting too, the fact that the sun goes down at night no longer presents an obstacle.
Which leads to the third change. Where once the coal and oil companies could argue that they were the best hope for leading the developing world out of energy poverty, it’s now clear that Africa and Asia will electrify mostly on the back of sun and wind. India – the country with the most people still lacking power – retired as much coal-fired power as it installed last year, even as it saw what the Financial Times called an “explosive takeoff” of renewable energy.
For investors less concerned with poor people than with their own returns, the same shift toward renewables has challenged the economics of oil and gas: year after year the fossil fuel sector has underperformed the rest of a surging stock market. By this point, endowments that divested early on have made out like bandits, and those that resisted have felt the drag of low returns. New York state’s pension fund, for instance, would be richer to the tune of $19,000 per retiree if its bosses had paid attention to divestment activists.
Oh, and there’s been one final development particularly important for colleges and universities: great investigative reporters have made it entirely clear that the fossil fuel industry knew all there was to know about climate change decades ago, and systematically lied about it to deflect pressure for change. This may be illegal – state attorneys general across the country are suing big oil – but it is beyond any doubt ethically dishonest. Had a Middlebury student done it, they would have been bounced, and rightly so.
Middlebury didn’t just divest: it also announced plans to cut energy consumption on campus by a quarter over the next decade, and supply all the energy it uses from renewable sources close to home. (A new hydro project on the waterfall in the center of town.) The school with oldest environmental studies program in the country, it’s clearly now back among the greenest institutions in the world.
But given the size of the climate crisis, institutions can’t worry simply about their carbon footprint. They have to look to every opportunity to lead – and divestment, as students never stopped pointing out, was the single most important step Middlebury (birthplace of 350.org) could take. The same logic will doubtless move others to follow; there’s simply no room for fossil fuel investments, subsidies or projects in a Green New Deal world. But it has to happen soon, because the biggest thing that’s changed is simply that six more years have passed. We’re running out of time for anything other than decisive action.