Why University of California is dumping fossil fuel stocks
The University of California system was the latest organization to sell off $200 million worth of fossil fuel stocks from its investment fund, it announced yesterday.
UC鈥檚 chief investment officer Jagdeep Singh聽Bachher made the announcement at a meeting of the UC regents鈥� investment committee yesterday. He explained that a 鈥渟lowing global demand, an increasingly unfavorable regulatory environment, and a high threat of substitution pose insurmountable challenges to coal mining companies,鈥� to divest from coal and oil sand companies, The Los Angeles Times reported.
But relentless public pressure also played a role. Students, faculty, and alumni across the university鈥檚 10 campuses have been pressuring administration for several years to divest from the fossil fuel holdings in its .
Their efforts have been buoyed by a national campaign led by activist group , which has persuaded 390 institutions worldwide 鈥� from Stanford University to The Guardian Media Group to the 聽鈥� to commit to selling their investments in oil, coal, and natural gas drilling companies.
Burning fossil fuels聽to produce energy releases the vast majority of the heat-trapping gases scientists say are responsible for raising average global temperatures.
Divestment is a protest tool that鈥檚 been used for decades. The point is to shame companies and governments into social and environmental reforms in areas like land mines, sweatshop labor, and racial injustice, instead of relying on government policies. In the 1980s institutions across the United States sold their stocks in companies working in South Africa to protest the country鈥檚 system of racial segregation, called apartheid.
Though the tactic is credited with helping to end apartheid, .
鈥淚f you want to do something about climate change, then you have to do something about prices,鈥� , an economist at Stanford University told The New Republic. 鈥淵ou are by beating up on companies.鈥�
Still, many believe that it鈥檚 an effective way to bring attention to urgent issues like climate change. Just last week, the that requires two large state pension funds 鈥� Calpers and CalSTRS 鈥� to divest from coal-mining companies.
Stanford University and the University of Maine this year have also divested. Despite aggressive student and faculty protests, Harvard University and Yale University are among the institutions that have so far decided to not divest.
鈥淲e will continue to confront the problem of climate change in ways that a university as an academic institution most meaningfully can and should 鈥� through research, education, innovative sustainability practices, and thoughtful engagement with others who can help the world find real solutions to such a complex and consequential challenge,鈥� said of the Boston Globe in April from Harvard鈥檚 president, Drew Faust.
Meanwhile, at UC campuses, students are are celebrating this week鈥檚 victory, though they say it鈥檚 not enough.
鈥淚 think it鈥檚 a really good move by the university. But it doesn鈥檛 mean we are going to stop pushing for full divestment soon,鈥� Fossil Free UC's Mr. Phinney told the Los Angeles Times.
According to the newspaper, UC still has about $10 billion worth of energy industry investments and has not changed its investment policy to avoid fossil fuel stocks in the future.
