<em>Rockefellers would seem to be related to Forrest Gump – “stupid is as stupid does” but are more likely sly as a fox.</em>
Stanford University. The University of Glasgow. The Educational Foundation of America. The British Medical Association. The City of Seattle, Washington. The Rockefeller Brothers (!) Fund. Amid the tolling of church bells and the thunderous self-applause of the environmental left, the fossil-fuel divestment bandwagon is on a roll. In addition to those listed above, 175 institutions, local governments, and individuals, with a total of over $50 billion in assets, as of last month have pledged to “divest” their holdings in the 200 oil, gas, and coal producers with the greatest “carbon” content of their reported reserves.
“Divest” is a curious term; a simpler verb is “sell,” and it is a source of some interest that the divesting institutions and individuals are pledging to do so within three to five years. Why not just give the assets away immediately on a first-come/first-serve basis? The obvious answer is that those divesting—selling—the fossil-fuel assets prefer to get the highest prices that they can, an objective not obviously consistent with the purported moral imperative underlying a shift out of fossil fuels and toward the “new energy economy,” about which more below.
For now let us consider the implications of the divestment stance. The fossil-fuel sector is huge—about $5 trillion in market capitalization—because other sectors demand energy, and fossil fuels overwhelmingly are the most efficient forms with which to provide it. So if investment in fossil-fuel sectors engenders some sort of moral quandary, does the same principle apply to investment in industries that use energy? After all, they are responsible for the very existence of the energy producers; will the divestment campaign expand to agriculture, manufacturing, transportation, retailing, the household sector, and all the rest? Is investment in government bonds the only moral course? Well, no: Government too uses vast amounts of energy.
And let us not stop there: Precisely why do all sectors demand energy? Obviously, it is because people demand the goods and services made affordable by fossil fuels. Notice that the correlation between energy consumption and household income is high, and rises as income increases; for the bottom three U.S. income quintiles, the respective correlations are 0.75, 0.85, and 0.91. If fossil fuels are evil, so are rising incomes, as the latter drive up the demand for the former. So let us be very clear that one central implication of the divestment campaign—remember, it is a moral imperative—is the desirability of poverty as a tool with which to dampen energy demands and thus incentives to invest in fossil-fuel sectors. This is separate from the impoverishing effect of a substitution of expensive energy in place of conventional energy produced with fossil fuels.
Accordingly, the divestment campaign, perhaps realizing it and perhaps not, has slipped into the anti-human trap that is the hidden but essential core of modern environmentalism: Far from being a resource, ordinary people are a scourge on the planet. They prefer cheap energy, strongly, but the moral imperative of divestment is diametrically opposed, and investments in people—education, health, etc.—make matters worse by increasing human capital and wealth, and thus the demand for energy. Accordingly, the “moral imperative” of the divestment campaign—its very logic—leads not only to disinvestment in virtually all economic activities, it does the same for investments in people, in particular in a third world desperate to emerge from grinding poverty.
Consider also one central dimension of what it means to be human: the application of intelligence to overcome the obstacles that define life outside the Garden of Eden. From backbreaking toil by hand, to the use of animals and tools, to the evolution of energy from wood to whale oil to coal to oil and gas to nuclear power to new technologies yet to be invented or proven competitive: The history of energy is a fundamental component of mankind’s evolution, reflecting the inventiveness that is uniquely human, a process utterly at odds with the underlying imperatives of the divestment campaign.
Supporters of divestment might respond that they too favor inventiveness, in the form of the “new energy economy,” which means such unconventional technologies as wind and solar power. Let us therefore examine the “moral” dimension of that investment shift. Because unconventional energy sources are unconcentrated, they are expensive, and cannot compete without large subsidies and guaranteed market shares. Because they are intermittent—sometimes the wind blows and sometimes the sun shines, and sometimes not—they must be backed up with conventional power units, which must be cycled up and down depending on wind and sunlight conditions.
In a word, they must be operated inefficiently, yielding an increase—yes, an increase—in the emission of conventional pollutants. And even an impossible 40 percent decrease in global greenhouse gas emissions would reduce temperatures in 2100 by about two-tenths of a degree. Would an enterprising journalist somewhere please ask the supporters of divestment about the morality of a campaign that would (1) impoverish millions of people, (2) increase conventional pollution, (3) yield zero offsetting environmental benefits, (4) forcibly extract resources from ordinary people, while (5) providing the environmental left with a rationale for moral preening?
And as long as we’re talking about morals, let us admire the breathtaking hypocrisy of the current generation of Rockefellers, announcing loudly their decision to divest the fossil-fuel assets of their charity, the Rockefeller Brothers Fund, while maintaining a deafening silence about the fossil-fuel investments of the far-larger family investment and wealth management firm Rockefeller & Company. Nor have we heard that they will divest themselves of the lavish lifestyles engendered in past Rockefeller generations by the historical growth of the oil and gas sector. Their central objective is loud applause at the upper-crust cocktail parties for a divestment that will have no effect on the fossil-fuel sector, that will cost them literally nothing, and that is part of a leftist campaign that views ordinary people as a liability. Such are the dimensions of moral cowardice.
Benjamin Zycher is the John G. Searle scholar at the American Enterprise Institute.