Below I’ve posted the introduction to a new MSSI Issues paper, “Fossil Free: The Development and Significance of the Fossil Fuel Divestment Movement“, which I co-authored with Kara Nicholson and John Wiseman.
As the probability and risks of catastrophic climate change continue to increase (Potsdam, 2012; Christoff, 2013), fossil fuel divestment has become an increasingly important strategic focus for organisations seeking to counter the power of vested interests and accelerate support for rapid reductions in CO2 emissions. In this context, “divestment” refers to strategies designed to encourage the withdrawal of existing investments from fossil fuel related industries and activities, as well as discouraging new investments. In some instances the divestment movement aims also to include action to promote and support the reinvestment of funds in alternative, more “climate friendly” industries such as renewable energy and energy efficiency.
The fossil fuel divestment movement has grown quickly over the last few years, with limited opportunity to document and reflect on its achievements, limitations, and implications. This paper therefore aims to provide an initial overview of fossil fuel divestment initiatives, focussing particularly on Australia. The paper concludes with some reflections on how the divestment movement could potentially contribute to helping society transition swiftly to a just and resilient post-carbon economy.
Our central conclusion is that divestment is playing an increasingly significant “disruptive innovation” role in strengthening support for rapid de-carbonisation. While global investments in fossil fuels represent an asset class worth over $5 trillion, the quantum of investment funds so far shifted through divestment campaigns remains relatively small (Bloomberg Finance 2014). At this stage the major impacts of divestment strategies are in highlighting the rapidly diminishing size of the available “carbon budget” and in stigmatising the role played by the fossil fuel industry and its allies in increasing the probability and risks of catastrophic climate change. The movement is also beginning to demonstrate significant potential to open up broader discussions about the policy and institutional choices needed to drive de-carbonisation investment switching at the necessary speed and scale.
The complete Issues paper is available here.
(In an aside, if anyone wants to attend a earthbag building workshop in New South Wales in November, see here)