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Guest Opinion: UI should stop investing in fossil fuels

BY GUEST OPINION | MARCH 05, 2015 5:00 AM

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According to the National Association of College and University Business Offices, $22 billion, or 5 percent, of college and university endowment are invested in energy and natural resources. As a student movement across the nation calls for reducing or eliminating the large portion of this invested in fossil fuels, the University of Iowa should decide what kind of example it wants to set. 

What kind of message are we sending to the rest of Iowa and the nation?

I would like my educational institution to send a message of progress by choosing to shift endowment funds toward more environmentally sustainable investment options. One of the three goals the UI’s endowment aims to achieve is “ensuring a healthier and more sustainable world.”

Investing any endowment funds in fossil fuel, however, directly contradicts this goal. The production and consumption of oil, coal, and natural gas will never lead to “a healthier and more sustainable world.”

Those who are vocally opposed to divestment, such as Vasser College Trustee Christine Wood, argue that universities and institutions that choose to divest lose the opportunity to influence company policy as a stockholder. This argument is flawed.  How can Shell stockholders lobby the company to move in a more environmentally sustainable direction when Shell shut down its wind and solar projects in 2009? They cannot lobby the company to simply keep its reserves in the ground — that would cause a loss to both the company and the stockholders. Even companies such as BP, which has maintained wind energy projects, will not be easily convinced to abandon oil reserves that could be profitably extracted. Lobbying fossil fuel companies for more sustainable practices is like lobbying the tobacco industry for healthier cigarettes: illogical and unrealistic.

Opponents to fossil-fuel divestment have also argued that divestment will economically harm universities, and therefore students, by reducing returns. Yet this cost of divestment can be offset by reinvesting divested funds elsewhere, as encouraged by Stephen Mulkey, the president of Unity College, whose endowment has beat market indices since the school’s pioneering move to reduce fossil fuel investments. Another option to increase returns in the long-run is to redirect funds into the university itself via efficiency projects. Mark Orlowski, the head of the Sustainable Endowments Institute, has supported this approach to divestment.  

A third case that has been made against fossil-fuel divestment is that the act of selling shares will not likely financially harm fossil fuel companies. Perhaps, but this is not the goal of the divestment movement.  The goal is to bring into question how we, as a society, can make the necessary move away from fossil fuels when we are so literally invested in them.  We need to draw both public and political attention so that legislative measures will be taken to address the harm caused by climate change if we continue burning fossil fuels at current rates.  Stanford University’s decision last year to pull its rather large endowment funds from coal industry stocks should inspire other institutions to do the same.

Universities have a loud and influential voice in forcing progressive change. This was demonstrated in the 1980s when students lobbied their universities to divest from companies that did business in Apartheid South Africa. This movement of divestment created the political pressure that led to the Comprehensive Anti-Apartheid Act of 1986 and an even greater reduction of U.S. funds invested in apartheid South Africa after the act was signed. 

The divestment of the UI will not be the deciding factor leading to legislative change, but we have the opportunity to be a part of it. It is not enough to support sustainability in the realms of academia and research; we must be willing to take action. The UI should divest in fossil fuels because I believe the leaders of our institution stand for a healthier world in reality, not just in theory.

Mia Arndt


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