Don't divest from energy stocks

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Article Highlights

  • Students are at the front of a movement to force colleges to participate in a political cause against global warming.

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  • As a result of America's growing natural gas reserves, there has been a dramatic decline in greenhouse-gas emissions.

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  • By encouraging disinvestment in fossil-fuel companies, students are attacking the companies that reduced carbon emissions.

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In the mid-1980s, racial segregation in South Africa became one of the most heated issues on American college campuses. Student activists demanded that their universities divest themselves of stocks in companies doing business in South Africa. Quite a few complied, withdrawing their investments. South African President Nelson Mandela credited the divestment campaign with having helped turn the tide against apartheid.

Now, college students are once again at the vanguard of a national movement to force colleges and public pension funds to participate in a political cause, this time against global warming, by diverting all their endowment holdings away from large fossil-fuel companies.

What we have here is a divestiture target that's altogether different than apartheid, which was clearly evil. Indeed, the differences in the two campaigns could not be more distinct. In the current case, the burden of a war on fossil-fuel companies would fall disproportionately on those who can least afford higher energy costs. By driving cars and trucks off the road, older power plants out of business, and curtailing production of oil and natural gas, while mandating the use of costly "green" energy, the playing field would be rigged against the economically disadvantaged poor and the middle class.

Astonishingly, the college divestment campaign has already had some success. Though using endowments and pension funds for political causes is not something you'd expect in America, several colleges in the Northeast have announced they will rid their portfolios of fossil-fuel stocks.

In a recent vote, 72 percent of Harvard undergraduates voted for a resolution asking the university to sell all of its oil, gas and coal company stocks. The campaign has spread to more than 100 college campuses.

If experience is any guide, this exercise will involve a lot of triumphalism about saving the planet, but the real story is about how a cadre of environmental activists who have achieved celebrity status on some elite campuses are steering the "fossil free campus divestment movement."

For scurrilous attacks on the fossil-fuel industry, few environmentalists can hold a candle to Bill McKibben, a Vermont-based writer and activist who has been cross-crossing the country to rally college students to the movement. He has not only portrayed oil, gas and coal as "rogue industries," but has also called for demonstrations against fossil-fuel companies through civil disobedience.

But as a direct result of America's large and growing reserves of natural gas, there has been a dramatic decline in greenhouse-gas emissions. The fact is, carbon emissions in the United States have fallen by 13 percent over the last five years and are now at their lowest level since1992, around the time when many of today's college students were born.

By encouraging disinvestment in fossil-fuel companies, college students are attacking the very companies that have helped bring carbon emissions to the lowest level in their lifetimes.

Mark J. Perry is a professor of economics at the University of Michigan in Flint and a scholar at The American Enterprise Institute.

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