1. It reduces the attractiveness of such companies to financing. Banks are a huge source of fossil fuel financing for projects. Increase the risk, increases the cost of capital and reduces the amount of projects that can be financed.
2. As fossil fuel projects look less attractive, the companies might more seriously look to diversify into other energy sources, reducing the fossil fuel production and hence emissions.
3. It signals to consumers that perhaps they might buy goods and services that are not as dependent on fossil fuels, e.g. electric cars, electric cooktops, heaters, etc., further eroding fossil fuel markets.
4. While there is always pushback, from corporate disinformation, to the "rolling coal" fad a few years back, clearly the switch to hybrids and now also electric cars is a growth trend.
Sometimes popular opinion and purchasing can change from small actions that snowball.
I think of divestiture as a memento mori, a reminder that the fossil fuel industry is not as immortal as it seems. There is still a lot of money to be made extracting hydrocarbons, but that may not always be so.
Stock prices are determined by transactions. Divestiture, at a suitable scale, puts downward pressure on the price of energy stocks. Those holding their shares confident of the industry's future have no effect on the price. Given how closely markets are watched, even a minor tremor can be salutary.
It would take convincing a lot of parties to divest to have a major impact on the value of investments in fossil fuels, but an occasional shudder is a good reminder that one lives in earthquake country.
I should have said "significantly" less. Now if the cost of divestment is minimal then, fine. It's a nice gesture. But just to be contrarian, can't symbolic gestures sometimes substitute for more substantive actions. Write a letter to your Congressman demanding a tax on net CO2 emissions instead of composting that lettuce. :)
Hasn't it been established that most legislation supports the donors' wishes, not the proletariat? My Congressional senator was Feinstein. In nearly 3 decades of letter writing, I never received anything other than a generic form letter stating that she had the best interests of the country, state, and the population at heart. I'll just continue to compost those vegetable scraps.
The reality is that money talks. The most effective talking is to hurt bad actors and those that support them financially, and with that remove those in power dependent on those donations.
Assuming divestiture is effective in reducing the share prices of fossil fuel producing firms, how does that lead less emission of CO2.
1. It reduces the attractiveness of such companies to financing. Banks are a huge source of fossil fuel financing for projects. Increase the risk, increases the cost of capital and reduces the amount of projects that can be financed.
2. As fossil fuel projects look less attractive, the companies might more seriously look to diversify into other energy sources, reducing the fossil fuel production and hence emissions.
3. It signals to consumers that perhaps they might buy goods and services that are not as dependent on fossil fuels, e.g. electric cars, electric cooktops, heaters, etc., further eroding fossil fuel markets.
4. While there is always pushback, from corporate disinformation, to the "rolling coal" fad a few years back, clearly the switch to hybrids and now also electric cars is a growth trend.
Sometimes popular opinion and purchasing can change from small actions that snowball.
I think of divestiture as a memento mori, a reminder that the fossil fuel industry is not as immortal as it seems. There is still a lot of money to be made extracting hydrocarbons, but that may not always be so.
Stock prices are determined by transactions. Divestiture, at a suitable scale, puts downward pressure on the price of energy stocks. Those holding their shares confident of the industry's future have no effect on the price. Given how closely markets are watched, even a minor tremor can be salutary.
It would take convincing a lot of parties to divest to have a major impact on the value of investments in fossil fuels, but an occasional shudder is a good reminder that one lives in earthquake country.
I should have said "significantly" less. Now if the cost of divestment is minimal then, fine. It's a nice gesture. But just to be contrarian, can't symbolic gestures sometimes substitute for more substantive actions. Write a letter to your Congressman demanding a tax on net CO2 emissions instead of composting that lettuce. :)
Hasn't it been established that most legislation supports the donors' wishes, not the proletariat? My Congressional senator was Feinstein. In nearly 3 decades of letter writing, I never received anything other than a generic form letter stating that she had the best interests of the country, state, and the population at heart. I'll just continue to compost those vegetable scraps.
The reality is that money talks. The most effective talking is to hurt bad actors and those that support them financially, and with that remove those in power dependent on those donations.