Stanford University recently became the most prominent university yet to purge coal companies from its investment portfolio. Here's what university president John Hennessy told the Washington Post about the move:
“Moving away from coal in the investment context is a small but constructive step while work continues at Stanford and elsewhere to develop broadly viable sustainable energy solutions for the future,” Stanford’s president John Hennessy said in a statement. Stanford doesn't disclose its holdings; as of Aug. 31, 2013, its endowment was worth $18.7 billion.
Predictably, the arguments that this will make no difference have already started circulating. Sadly, one of the people providing a surprisingly uncritical platform for this argument is Yuki Noguchi of NPR:
If the students at Stanford University believe they sent the coal industry a strong message this week, they should think again. The school's decision to eliminate coal from its portfolio did not send shock waves through the industry. In fact, representatives say it will have no financial impact on the industry at all. Nor will it curb the growing demand around the world for coal-generated electricity.
Not only does Noguchi's piece fail to talk to any of the activists behind this divestment push about its intended purpose (hint: it is as much about symbolism and stigmatization as it is direct economic impact), she also fails to look at the potential collective impact of the growing divestment movement.
Yes, the coal industry spokesperson Noguchi quotes is right to say that there are plenty of other potential investors in coal who will pick up the investments that Stanford turns down.
With Norway considering divesting its massive sovereign wealth fund from fossil fuels, and the Bank of England receiving warnings over the potentially disastrous economic impact of a carbon bubble, it's fair to say that the divestment discussion is just getting started.
As solar costs continue to approach parity with fossil fuels, as energy efficiency technology gets ever more sophisticated, as battery storage becomes more viable, and as mainstream corporate giants from MARS to Ikea make massive investments in renewable energy, it seems laughably simplistic to analyze Stanford's divestment decision in isolation of all the other potentially disruptive developments going on in the energy sector.
Meanwhile, Business Green reports on industry figures suggesting Chinese coal production fell 1.31 percent, and sales fell 1.29 percent last month.
Yes, Stanford's divestment decision is barely a drop in the bucket. But Stanford are by no means the only ones working to fill that bucket.