By Arman Kazemi
December 11, 2014
The climate group 350.org is organizing the world’s first Global Divestment Day with the goal of hitting fossil fuel developers where it hurts them the most: their access to capital.
From February 13 to 14, 2015, 350.org hopes to rally the public, student and faculty organizations, as well as the private sector in a show of force urging the financial backers of fossil fuel to remove dirty energy from their investment portfolios.
Much like previous divestment efforts, organizers behind Global Divestment Day are trumpeting the moral imperative for removing capital from fossil fuel developers. But the recent, drastic drop in the price of oil suggests that divesting from fossil fuel might make economic sense as well.
“Some investors might choose to steer clear of oil sands stocks for environmental or ethical reasons,” wrote Jeff Rubin in the Globe and Mail. “Personally, I didn’t disinvest from the oil sands to save the world. I did it to save my portfolio.”
Stock market volatility has raised the specter of a future global economic fallout related to the so-called Carbon Bubble. According to CleanTechnica, trillions of dollars in international stocks are hanging in the balance due to the over-valuation of oil and gas assets that don’t factor-in climate change and carbon risk – resulting in a carbon bubble “in danger of popping just like the recent housing bubble.”
At this very moment, world leaders are gathered in Lima, Peru for another round of U.N. climate talks aimed at curbing global greenhouse gas emissions. If successful, vast fossil fuel reserves that currently boost the stock value of oil and gas companies could prove worthless if governments adopt a binding agreement.
According to one study, a climate accord that sets a target of no more than 2°C would render between 60 and 80 per cent of current coal, oil and gas reserves unburnable.
Last year, a study from the University of Oxford claimed the 350.org’s divestment campaign to be growing faster than any other divestment effort in history, including the one that helped end Apartheid in South Africa.
While the report predicted little short-term economic impact as a direct result of the campaign, Global Divestment Day and other strategies could eventually changeinvestment patterns, and make a meaningful impact on the fossil fuel industries’ access to capital.
If that’s the case, we’ll start to see more market analysts and fund managers like Jeff Rubin, driven by a now wary public, move to diversify investments beyond the morally, environmentally and – perhaps soon – economically unsustainable oil and gas industry.