When it comes to investing in a sustainable future, divesting in fossil fuels is a commonly called-for solution. This method consists of retracting funding and investments from fossil fuel companies as a show of solidarity against the use of fossil fuels. Alternative energy sources are here. Instituting them will be key to a sustainable future.
However, the prevalence of fossil fuels makes for a formidable challenge. Widespread use and economic issues with integrating alternatives give some investors pause. Yet in one unlikely industry, fossil fuel divestment could lead the way to proven results.
Fossil fuel divestment is changing higher education. For educational institutions, switching to alternative energy and removing stakes in fossil fuel companies means teaching students what a culture of sustainability looks like while paving the way for future generations.
But can higher education lead the way in fossil fuel divestment?
The Importance of Fossil Fuel Divestment
Institutions of higher education have historically kept—and currently keep—endowments within fossil fuel companies as a manner of boosting their returns to fund research, academics programs, and facility resources. However, this pattern of investing likely will not play out well long-term.
A carbon bubble is looming, one estimated to burst with the weight of $1-$4 trillion. If this burst happens suddenly, it could push the economy into a disaster on top of the one already caused by the coronavirus pandemic. Divestment, however, is one method of deflating this bubble over time rather than disastrously allowing it to pop of its own accord.
But a pop is increasingly likely. When COVID-19 hit and global shutdowns began, fossil fuel companies ended up with nearly $90 billion in lost value. This devaluation reportedly started even before the pandemic, as governments the world over worked on solutions to combat climate change through reduction in carbon emissions.
Despite the United States pulling out of the Paris Agreement, which provides guidelines for climate-directed energy measures, other countries have committed to reducing fossil fuel usage. New Zealand banned offshore oil and gas exploration permits. Spain closed most of the country’s coal mines.
The trend towards fossil fuel reduction is likely to continue as the world balances increased awareness. University students commonly fight their institutions, calling for divestment of fossil fuel endowments, moving towards a clean energy future. With the falling values of fossil fuels in 2020, such divestment seems a good call.
The Power of Higher Education in Clean Energy
Education policy in large part, however, is resistant to divestment efforts, though education policy is a fundamental aspect of guiding the world’s understanding of pressing issues. Some schools have committed to divestment efforts. George Washington University has entirely divested itself of fossil fuel holdings. Cornell University has called off all new investments in oil and gas. And other colleges and universities are following suit.
But why is it so essential that universities make the divestment push?
Currently, universities have nearly $600 billion invested in endowments, not an insignificant portion of which is tied up with fossil fuel companies. By divesting these finances away from the fossil fuel industries, higher education institutions could begin a wider divestment trend without altogether bursting the bubble at once. As renewables are estimated to grow to a $5.5 trillion industry by 2030, rerouting endowments there could prove to be a much more beneficial investment opportunity than fossil fuels over time.
Thus, the potential for higher education to lead industries out of fossil fuel dependency without causing a financial crisis is greater than you might believe. Doing so, however, would take commitment to sustainability as a culture.
Creating and Supporting a Sustainable Culture
Higher education institutions can commit to divestment of fossil fuel sources, and in turn, build an interweaving culture of sustainability that sends shockwaves through global trade. This process starts with divestment, continues in working with companies engaged in environmental remediation, and propagates through examples set for students.
Once a university has eliminated its fossil fuel investments, it can continue its approach to environmental sustainability through other commitments. Environmental remediation is a valuable process that consists of removing contaminants and harmful materials from an environment. This process represents an opportunity for both university students and contracted companies to engage with and promote sustainable techniques.
Continuously, a commitment to sustainability can be a great way to expand the impact of a resume. This goes for both a university’s students and all those looking to be employed for any company with sustainability built into its values. As the awareness of environmental issues increases, encountering such a company is more likely than not. For anyone planning to work in the new world of clean energy, supporting sustainability can provide a synchronicity of values.
With interweaving industries and cultures all looking for commitments to reducing fossil fuel usage from the university level, a broad impact can be made on the rest of the world. Some U.S. colleges are already engaged in building a clean energy future, doubling renewables and creating economic benefits. As financial and climate crises loom, the necessity of such a shift is clear.
Leading the Way to a Sustainable Future
The impact of universities divesting from the fossil fuel industry could resonate throughout the world as a signal of imminent change. With compacted losses from the COVID-19 pandemic, the fossil fuel industry is vulnerable. Meanwhile, growth in renewables can pave the way from a near-seamless redistribution of funding to change the game of clean industry in the U.S. and across the world.
Fossil fuels are likely the energy of the past. Strangely but surely, higher education institutions can help lead the way into a clean future.
Source: energycentral
