The Ticking Climate Bomb 

Those who advocate for "engaging" with Big Oil and Big Coal to address climate change are running out of time.

In the climate debate, most of the noise so far has involved climate change denialists. But an important clash of ideas is occurring within the movement to limit climate damage. The question centers on what large investors, especially pension funds and foundations, should do with the billions of dollars they have invested in climate-destroying oil and coal companies — investments that are financing the destruction of the planet.

So-called "divesters," like environmentalist Bill McKibben and the climate group 350.org, argue that for practical, financial, and moral reasons, investors should sell their fossil-fuel investments immediately. "Engagers," on the other hand, claim that the best route is to meet with and cajole Big Oil and Big Coal to change their business practices. Financing oil and coal in order to "have a seat at the table" will produce positive results, according to the engagers' point of view.

But the lack of concrete results so far, along with recent revelations of Big Oil's suppression of climate science and the risk of climate change, often surreptitiously, have exposed the fallacy of the engagers' approach.

Last year, three East Bay mayors wrote a joint op-ed in the Sacramento Bee calling for divestment from fossil fuels. In response, Anne Simpson, CalPERS' director of Global Governance, argued for more engagement. "We all have a shared concern with climate risk, but our view is that the solution lies in engaging energy companies in a process focused on finding solutions, rather than walking away," she wrote.

California state Senate Pro Tem Kevin de León responded, in turn, by authoring a bill requiring CalPERS (the public employees' pension plan) and CalSTRS (the public school teachers' pension plan) to sell their investments in coal companies. These investments, de León argued, are "a nuisance to public health" and "inconsistent with our values as a state on the forefront of efforts to address global climate change." De León's bill is now law.

There are many people, meanwhile, who do not view engagement and divestment as being mutually exclusive. For example, a representative of Carbon Tracker, a UK nonprofit, told me in an interview that the test for the engagers is "about being able to demonstrate effectiveness of engagement."

State Controller Betty Yee, who is a trustee on the board of CalPERS and CalSTRS, contends that engagement has been effective. Yee is an engager; in August, she penned an op-ed during the fight over coal divestment entitled, "Engagement is best approach to reduce fossil-fuel investments." And in an email to me, her spokesperson Taryn Kinney stated: "As a result of a collective shareholder effort, Exxon Mobil changed their approach to risk disclosure. Exxon's decision to report how it will assess the risk of stranded assets from climate change proves that the level of engagement, from investors, including CalSTRS, helped influence their decision."

But Yee's claim about the success of engagement doesn't stand up to scrutiny. Ceres, a long-time investor coalition of "environmentalists and capitalists" that includes companies like Ben & Jerry's and PG&E and has "engaged with ExxonMobil and its predecessor companies for decades," stated recently that ExxonMobil has denied that any of its reserves are stranded or unburnable — which is a direct denial of the belief of nearly all responsible investors. Plus, Ceres said, ExxonMobil is currently providing "almost no information about carbon asset risks."

Moreover, recent revelations prove that ExxonMobil has been shining the engagers on for decades. Reports reveal that the company's top management knew as far as back as the late 1970s about the threat of global warming from burning fossil fuels. A decade later, the company spearheaded industry efforts to derail regulation of greenhouse gas emissions and cloud public understanding of climate science. As McKibben recently wrote, "They helped organize the most consequential lie in human history."

The realization of the futility of engaging with Big Oil and Big Coal is nothing new. Some members of the Rockefeller family, founders of ExxonMobil's predecessor, tried engagement for decades. They wrote letters, had lunch meetings, and backed shareholder resolutions to address climate change. Ultimately, their engagement failed and they divested.

However, that doesn't mean that engagement is a complete waste of time. Andrew Behar of the Oakland-based shareholder advocacy group, As You Sow, believes that engagement can be synergistic with divestment. He also believes that large oil producers have a choice: "transition" to clean energy or "wind-down operations now." If companies are motivated, he contended, engagement with them "enables a dialogue about how the transition or wind-down will happen."

Behar might be right about that — eventually. It will likely take a long time before ExxonMobil and Chevron decide to wind-down their core business.

And in the meantime, those who play engagement paddy-cake with Big Oil and Big Coal are on the hot seat: Unless they can show better results quickly, the time to divest will be here very soon.

Comments (3)

Showing 1-3 of 3

Add a comment

 
Subscribe to this thread:
Showing 1-3 of 3

Add a comment

Anonymous and pseudonymous comments will be removed.

Latest in Raising the Bar

Author Archives

Most Popular Stories

Special Reports

Holiday Guide 2016

A guide to this holiday season's gifts, outings, eats, and more.

Taste, Fall 2016

Everything you need to know about dining in and out in the East Bay.

© 2017 East Bay Express    All Rights Reserved
Powered by Foundation