Is fossil fuel divestment tokenistic?

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Last year, the Australian National University attracted headlines with its plan to divest from companies deriving income from the sale of fossil fuels. This decision by the university attracted both applause and criticism from politicians, commentators and the media. 

Since then, superannuation funds, and even the Church of England have followed suit.

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But is fossil fuel diverstment just tokenistic window dressing?


The decision to
divest from companies that derive revenue from the sale of fossil fuels is not only tokenistic and window dressing, it may actually be counter-productive to the development and rolling out of renewable energy.

Who are some of the major investors in renewal energy? You got it – energy companies that make money out of fossil fuels.

BP has been a world leader in the development of solar technology. They were until recently the world’s largest manufacturer of photovoltaic cells. Chevron and many other ‘fossil fuel’ energy suppliers are involved in the development of renewable technologies and the roll out of renewable energy projects.

But these decisions to divest from fossil fuel companies cuts them out.

What overlook are the unintended consequences of their decisions, and decisions including fossil fuel divestment. This decision which seeks to reduce the use of fossil fuels could actually have the opposite impact by disempowering the greatest investors in renewables and slow down the rolling out of new technology.

In the end, fossil fuel divestment is not much more than lazy window dressing and moral preening.

What would make a difference is if people insisted that their energy companies provided renewable options.

What would make a difference is if consumers actually changed their behaviours rather than making feel good statements that demand little of themselves, and what’s more, could actually be counter-productive to their intended consequence.

  • Chooie

    Well it is a way to signal to the market that you want more alternatives. Should we trust the market to respond accordingly? Or do we need to guide the market to make the right decisions?

    I don’t think this will help Australia to have alternatives. We require fossil fuel energy generation because it can provide the necessary base load capacity. The only alternatives that can provide base load capacity in Australia are hydro and nuclear. Both of these options would generally be opposed by the same types of people who also oppose fossil fuels. So we have to continue to burn coal, no matter how much divestment happens.

  • I think the best way to signal to the market that we want alternatives is for individuals to make choices and decisions for their own lives.

    I can’t stand it when people advocate for fossil fuel divestment, yet still drive a nice car and eat imported foods. As a wise old sage once said: ‘the best way to change the world is to change yourself’.

  • Chooie

    Yeah there are a lot of NIMBY Greens with planks in their eyes.

  • The ANU & CoE would have been better off to choose a small panel of people who work in the area and ask them to put forward (say) three companies who are innovating in the area of renewable energy & then INVEST in those companies.
    refusing to invest in particular companies achieves little (other investors will be more than happy to sign on the dotted line in their stead), but voting with your wallet by putting money INto to the system allows you to ‘back’ companies that show genuine promise in improving the competitiveness of renewable energy solutions.