Climate Change is the World’s Biggest Problem, But Divestment Isn’t The Answer
by Zach Nunn
A Fossil Free Stanford member calls for a Stanford-wide carbon tax in place of the current campaign to divest from coal and oil.
Stanford agrees that global warming is a problem. The earth is a giant, bubbling cauldron of energy and matter; turn up the heat, and once-reliable patterns of water, weather, climate, and nutrients will change. Many on campus who recognize this are united behind Fossil Free Stanford (FFS) and their goal of divestment. True, there is controversy about FFS’s strategy. But the group understands that change will come only with a shift in the way Americans think about energy. FFS knows people cannot keep driving cars and heating homes and blasting the AC day after day, hoping solar energy will power all of it eventually. They know it is not good enough for people to march the streets with protest banners, then go home and eat a hamburger dinner while booking flights to visit their grandma. Americans have to make different lifestyle choices, since global warming can not be fought with business as usual. FFS sees this, and is raising awareness through a campus-based strategy.
Stopping climate change is a noble aim. Many Americans don’t even believe global warming is an issue; very few accept that the consumer lifestyle’s very reckoning is imminent. Misinformation and doubt — largely funded by Big Oil, Big Coal, and Big Energy — has limited access to information. My grandfather, a retired engineer who stays up to date on recent scientific advancements, and talks about the new science of paleo diets and the history of computers, recently brought to my attention how limited and polarized this information has become. He asked me why Stanford isn’t doing anything to confront the problem of global warming.
The truth is that Stanford is doing a lot. This year saw the completion of SESI, a first-in-the-world technology coupling a solar energy farm with an advanced heat recovery system, which will cut Stanford’s greenhouse gas emissions by 68 percent and reduce water consumption by 15 percent. Add that to hundreds of papers focused on climate change and its effects, including many of the most often-cited in the media. Yet little attention is directed to changing everyday perceptions about energy and the world. Even my well-read grandfather was not aware of Stanford’s or any other university’s emission reduction strategies. I hoped, when I joined FFS last fall, to fill this gap. However, I slowly spotted weaknesses in the strategy.
For example, divestment of fossil fuels will lose Stanford money. Studies by Bradford Cornell at Caltech show that had Harvard and others divested from fossil fuels 20 years ago, their endowments would be significantly smaller today. Most economists agree the energy sector will only grow in coming years with the modernization of Africa and Asia. To withdraw investment in these areas is to miss out on future dollars, money that could be spent on more research and more advocacy of carbon reduction. Maximizing Stanford’s profits, regardless of those profits’ source, might make sense in the long run, because Stanford could use those assets to more quickly develop green technologies.
FFS acknowledges the potential costs of divestment (although also asserts that Stanford’s economists are wrong and that we might not lose money). They point out America’s fuel-based economy will only shift to renewables with the blessing of big energy companies, who require financial pressure to change their strategy. It’s a valid argument, yet does divestment hurt these companies?
I looked for evidence in Stanford’s recent decision to divest from coal. Alarmingly, I found that the language used in the announcement specifies Stanford will only refrain from ‘direct investment’. Stanford previously had $0 directly invested in coal, because Stanford has no direct investments in any commodities. As a result, the divestment announcement signified no change in Stanford’s portfolio; any future divestment pledge would also likely contain this loophole. In fact, after analyzing divestment economics, I realized even if Stanford had divested, coal companies would not have noticed. (The economics is outlined in this Review article.) Divestment is a feeble weapon. I wondered if another tool could be used instead.
Still, one pro-divestment argument might hold water. FFS wants to utilize Stanford’s prestige to indicate to the public that we need to change our lifestyles. If the best university in the world (in my own unbiased opinion) distances itself from fossil fuels — taking a financial hit in the process — perhaps people will finally listen. This proposition might be what my grandfather is asking for: divestment would signal to America that the institutions of higher learning are taking the lead in fighting global warming.
Then again, the world agreed on a International Climate Treaty in December, illuminating for everyone the resolve to fight climate change. Will Stanford’s endowment really bring more awareness than Paris? Divestment is a purely public relations statement. While the strategy can catalyze change, it does not lower emissions itself. But is there a way for Stanford to accomplish both? Can Stanford advertise the commitment to green energy and simultaneously act to lower carbon emissions ?
It can, by utilizing a revenue-neutral carbon tax.
A Stanford carbon tax would function as follows. Departments, laboratories, dorms and cafeterias would be monitored for how much lighting, heating, electricity, food, and shipping they use, and their carbon emissions would be calculated. Each department would then be ‘taxed’ based on their emissions. Any revenue generated would then be used to reduce tuition costs or fund more research. Essentially, the revenue-neutral tax would amount to shuffling funds within the university.
A carbon tax at Stanford should not be punitive. The tax does not have to be large to be effective. The goal is not to decrease Stanford’s carbon emissions, but to inspire students and others to adapt less carbon-intensive living patterns.
Still, many students are concerned about pitting different departments against each other. It may not be fair if the physics department receives less funding because physics experiments require substantially more energy than the economics department uses. Unfortunately, these concerns can not be fully set aside. A carbon tax has a cost, just like any other carbon mitigation strategy. But this is not to say the physics department need be sacrificed. The carbon tax does not have to be implemented university-wide, and departments can be exempt or taxed in comparison to each other. Dining halls can have their own tax bracket, for instance. However, exempting areas reduces the effectiveness of the program. Despite the shortcomings, there are many reasons why I am advocating for such a carbon tax.
First, Stanford itself would reduce carbon emissions. While University emissions reduction is not the aim, and while a small tax will not hurt departments which can not avoid using energy, professors and programs will still feel incentivized to cut slack: they might use daylight instead of lamp light, run less experiments, conserve on materials and perhaps find innovative new ways to reduce carbon emissions in energy intensive technologies.
Much more important, a science of calculating carbon emissions and taxing those emissions would be born. I’m currently unaware of good ways to estimate my environmental footprint. Stanford can give everyone this tool. How much carbon is generated by having a TV in the staff room, or in a freshman dorm? How much is polluted when the swim team travels, or in making the cups at Coupa Cafe? What are the carbon costs of properly disposing the hundreds of pipette tips, and what are the costs of printing syllabuses for everyone in a 200 person class? An extensive study could be complex, but Stanford surely has the resources.
The benefits of a university-wide carbon calculation are far-reaching. A Stanford carbon tax would prove that carbon can indeed be taxed. Standardizing of emission calculations would facilitate companies, organizations, and governments to implement programs of their own. If the ultimate goal is a global carbon tax — something most environmentalists agree would be the best way to curb emissions — then this type of research would be taking a crucial step forward.
On a personal level, Stanford students and faculty would be able to monitor their individual carbon footprints. By way of perhaps a new smartphone app, students could track what facilities they used throughout the day and then what emissions were generated at each of those places to estimate how much carbon each student was emitting. I could see my daily carbon output living at Larkin, for instance, and compare the carbon output of buying a lunch at Panda Express to eating a chicken salad at Stern. Or I could monitor the carbon emissions caused by disposing chemical waste during lab, or see the ‘carbon price’ of a textbook at the bookstore. This personal approach would highlight the immediacy of reducing emissions. It brings realization of how much carbon everyone actually produces and from where on a daily basis.
Moreover, it would be easy for other universities to follow Stanford in this approach. From Ohio State to Puget Sound, students across the country would personally see how carbon fuels their lives. Excitingly, this would also give American universities the leverage to push for national change. If students everywhere see that their universities can implement a successful carbon tax, then they might question why states and the federal government can’t implement a similar program. At a national scale, the revenue generated from a similar tax could then offset reductions in the income tax or could be used for infrastructure, instead of tuition assistance. Millions of voters would suddenly become climate change activists, and when these carbon-conscious students become leaders, they can usher in substantial societal changes. Universities will thus serve as the laboratories for real political change.
Lastly, FFS’s desire to make a political statement would be achieved even to a greater degree than divestment has done. The idea of a university taxing itself is unique and unorthodox, so the media will come flocking. The public will ask why. Forced to become educated in the nuances of a carbon tax, reporters will write articles filled with substance. The public, in inquiring about such an inventive proposal, will confront the complexities of the climate problem. America would face the realities of switching off carbon, and the costs of not doing so.
I arrived at Stanford as a Colorado native and hardline environmental activist, strongly supporting FFS. I sat in and sang at Main Quad last November because I believed in voicing my and Stanford’s concerns for the planet. The group and I both share the view that Stanford is responsible for inspiring students — and America — to undergo a cultural change. But as an open-minded individual, I increasingly lost faith. Searching for another way, I recognized the promise of a carbon tax. I hope that everyone reading this will appreciate the same. Together, with increased conversation and pressure, we can forge new action to end the threat of climate change.