Is divestment the best way to tackle climate change?

Cambridge University invests more than £370 million in fossil fuels and has close ties with oil and energy companies. Between 2009 and 2014, the university received £15.8 million in funding from carbon-intensive companies. In 2000, BP gave the university £22 million to establish a research centre.

The vast sums of money flowing in both directions pollutes both the environment and education. So in response a number of academics and campaign groups, under the umbrella of climate organisation People & Planet, have joined with the National Union of Students (NUS) in calling for the University to divest from fossil fuels entirely.

Marxists support the sentiment behind divestment because we want to see an end to the exploitation and pollution of the planet for profit. But divestment can never actually achieve this aim. As the Financial Times explains:

“[D]ivestment does not directly deprive oil energy companies of capital. The shares sold are of course bought by someone else….the main effect of this is that those who buy the stocks earn better returns. There is plenty of low-cost, environmentally insensitive capital available for energy companies that need it.”

So what is the point of a divestment campaign, such as the one being directed at Cambridge University, if it is not to actually solve the problem of environmental pollution and climate change? The document submitted by the campaign group to the University says the following:

“Continuing to invest in fossil fuel companies is not only a financial risk to the University of Cambridge, but reputational too.”

In other words the campaign group simply wants to make more money for the university, presumably by investing in companies that only exploit workers rather than the environment. And in addition the academics involved don’t want their reputations tarnished by association with the appalling practices and effects of fossil fuel extraction. Does that mean they don’t mind if this continues, just as long as they can’t be connected to it?

This highlights the enormously limited effect of divestment as a method of tackling climate change. No doubt there are people involved with the campaign who want to go much further than simply divesting from fossil fuels, but it is in the nature of a campaign of this kind that the most it can hope to achieve is a warm sense of self-satisfaction, rather than having any tangible impact on environmental pollution and climate change.

Marxists would also dispute the idea that divestment is simply the first step towards ending fossil fuel extraction altogether. To tackle environmental questions properly it’s necessary to understand the root causes of the systematic pollution and exploitation of the planet. These things are not caused by the decisions of individuals, whether related to recycling or to investment in fossil fuels. They are caused by a capitalist economic system that puts profit before everything else, including the long term health of people and the planet.

Divestment campaigns directly contradict this analysis because they base their arguments on the logic of the capitalist system, by saying that it’s better to invest in this type of exploitation rather than that type of exploitation. If any progress is to be made we have to start by explaining the need to overthrow the capitalist system and build a system based on need instead of profit. We can then base our arguments and campaigns on this foundation. Unfortunately, from this point of view, divestment campaigns set off on entirely the wrong footing.

So how do Marxists think the NUS and others should tackle the question as regards Cambridge University? Firstly they should demand that investment decisions, as well as all other decisions of university management, be taken by elected representatives of staff and students. It is these people, not investment bankers and overpaid bureaucrats, who keep the university going in reality. They should be the ones taking decisions about how it is run.

Secondly, big business of all kinds should be kicked out of education. No more funding of research centres by oil companies. No more funding of PhD programmes by private businesses. There should be a massive investment of public money into education to fund education, research, and development into things that are useful for society as a whole, not for big business. In fact, one area that could receive much more funding in this way would be research into renewable energy and environmental sustainability.

Thirdly, there should be a sustained campaign to take the biggest companies, all of which have a poor record on environmental sustainability, into public ownership. These companies should be nationalised. No compensation should be paid – they have been making a profit by exploiting us and our environment for decades – we don’t owe them anything. And they should be placed under the democratic control of the people who work in them, the people who use their services and products, and the people whose lives they impact through their environmental pollution. In other words they should be placed under the democratic control of the working class as a whole. We can then use their resources to fund and plan the investment in education and renewable energy mentioned above.

The NUS, student unions, and trade unions could make such a policies a reality if they worked together and based themselves on militant methods and bold socialist ideas. This is the alternative to divestment campaigns, and it is the only way to seriously tackle climate change.

by Ben Gliniecki, London MSF