Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates • Hacker News Board

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#51

Post by andylei » Tue, Sep 17, 2019, 10:14 PM UTC

kerkeslager wrote: post #10

I'm pretty unclear on how anyone even thinks divestment works, actually. When a company sells stock in an IPO, buying stock from them allows them to raise capital, so it seems clear to me that you shouldn't buy stock from a fossil fuel company. But that's non-investment, not divestment. Divestment is about selling existing stock. It's true that divestment drives down the stock price. This could mean that if a company…

This explains it pretty well: https://www.aqr.com/Insights/Perspectives/Virtue-is-its-Own-...

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#52

Post by gowld » Tue, Sep 17, 2019, 10:20 PM UTC

shkkmo wrote: post #13

andylei wrote: post #9

Earlier quoted context omitted.

this explains it pretty well. https://www.aqr.com/Insights/Perspectives/Virtue-is-its-Own-...

It's a bit wordy, but the relevant argument is here: > everything still gets owned by someone. So, clearly the group without such qualms, call them the sinners, have to own more than they otherwise would of the sin stocks. How does a market get anyone, perhaps particularly a sinner, to own more of something? Well it pays them! In this case through a higher expected return on the segment in question.

The article's loose language is confusing. The full analysis has 3 parties: virtuous boycottor investors, vicious (as in vice) investors, which the article incorrectly calls "sinner", and the evil corporation. The conclusion is that the virtuous boycottor investors' weapon is forcing the evil company to pay the vicious investors a premium return, until the corporation is bankrupt, and the vicious investors laugh all the way to the bank while the virtuous investors take pride that their financial sacrifice improved the world.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#53

Post by thereisnospork » Tue, Sep 17, 2019, 10:21 PM UTC

kerkeslager wrote: post #10

I'm pretty unclear on how anyone even thinks divestment works, actually. When a company sells stock in an IPO, buying stock from them allows them to raise capital, so it seems clear to me that you shouldn't buy stock from a fossil fuel company. But that's non-investment, not divestment. Divestment is about selling existing stock. It's true that divestment drives down the stock price. This could mean that if a company…

If anything, shouldn't the green contingent buy more stock in oil companies to try and effect a hostile takeover?

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#54

Post by scrooched_moose » Tue, Sep 17, 2019, 10:26 PM UTC

> However, Mr Gates questioned the divestment movement’s “theory of change”, arguing that investors who want to use their money to promote progress will have better results by funding innovative businesses such as Beyond Meat and Impossible Foods, two alternative protein companies he has backed.

I must be missing something, but isn't that exactly what "divestment" is? You sell off shares in fossil fuels and reinvest the money in other industries which are more climate conscious? It sounds like he's saying people are getting their money back from fossil fuels and hiding it under the mattress.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#55

Post by cptskippy » Tue, Sep 17, 2019, 10:30 PM UTC

scrooched_moose wrote: post #54

> However, Mr Gates questioned the divestment movement’s “theory of change”, arguing that investors who want to use their money to promote progress will have better results by funding innovative businesses such as Beyond Meat and Impossible Foods, two alternative protein companies he has backed. I must be missing something, but isn't that exactly what "divestment" is? You sell off shares in fossil fuels and reinvest…

You can both keep existing investments in fossil fuels and invest new funds innovative companies. It isn't any either or proposition.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#56

Post by gbrown » Tue, Sep 17, 2019, 10:34 PM UTC

bcoates wrote: post #22

kerkeslager wrote: post #10

I'm pretty unclear on how anyone even thinks divestment works, actually. When a company sells stock in an IPO, buying stock from them allows them to raise capital, so it seems clear to me that you shouldn't buy stock from a fossil fuel company. But that's non-investment, not divestment. Divestment is about selling existing stock. It's true that divestment drives down the stock price. This could mean that if a company…

I think it assumes that large investors aren't really passive, but intervene on behalf of their investments. If you convince someone to divest from X, then they have the luxury of remaining neutral when you propose that X be destroyed.

Exactly, carbon regulation will be a lot easier to pass if the direct impact to peoples' finances is lessened.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#57

Post by jchw » Tue, Sep 17, 2019, 10:37 PM UTC

> The idea is not to starve companies of capital but to remove their “social licence to operate”

Per this description, the basic idea behind divesting seems similar to the concept of creating social stigmas and perhaps even “cancel” culture. I’d argue that this isn’t even very effective as a vehicle for positive change amongst individuals, and seems extremely unlikely to be effective amongst corporations. Honestly, it doesn’t seem like the idea of corporate social responsibility has held up well in the modern era, period.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#58

Post by la_barba » Tue, Sep 17, 2019, 10:39 PM UTC

noneckbeard wrote: post #44

Investors divesting from fossil fuels sounds a lot like sanctions in that they “don’t work until they work.”[1] It would take an overwhelming number of investors to make divestment really hurt, which is unlikely. And I definitely agree that focusing on supporting climate change impact is better than starving the polluters. But it seems intellectually dishonest to say that divestors are “wasting their time.” And there…

>Investors divesting from fossil fuels sounds a lot like sanctions in that they “don’t work until they work.”[1]

Sure, but you can say that about any cause. Sounding like something is vague, and thats the larger point from the article. People need to quantify the actual impact of their actions w.r.t. divestment. Whereas, its easier to quantify the impact of other more positive/creative actions (e.g. transitioning from petroleum to clean energy).

>And there’s no reason you can’t do both.

Oh, there are more than two ideas that activists have. There is "no reason" you can't do a third, fourth, fifth, sixth, seventh and more and more. You only have limited resources to expend here - your free time, energy and motivation.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#59

Post by angstrom » Tue, Sep 17, 2019, 10:39 PM UTC

scrooched_moose wrote: post #54

> However, Mr Gates questioned the divestment movement’s “theory of change”, arguing that investors who want to use their money to promote progress will have better results by funding innovative businesses such as Beyond Meat and Impossible Foods, two alternative protein companies he has backed. I must be missing something, but isn't that exactly what "divestment" is? You sell off shares in fossil fuels and reinvest…

This has always been my interpretation. I was unaware the idea was to sell C02 heavy companies.

Re: Fossil fuel divestment has ‘zero’ climate impact, says Bill Gates

#60

Post by zopa » Tue, Sep 17, 2019, 10:40 PM UTC

thereisnospork wrote: post #53

kerkeslager wrote: post #10

I'm pretty unclear on how anyone even thinks divestment works, actually. When a company sells stock in an IPO, buying stock from them allows them to raise capital, so it seems clear to me that you shouldn't buy stock from a fossil fuel company. But that's non-investment, not divestment. Divestment is about selling existing stock. It's true that divestment drives down the stock price. This could mean that if a company…

If anything, shouldn't the green contingent buy more stock in oil companies to try and effect a hostile takeover?

That seems very unlikely to be the most cost-effective use of capital. Exon Mobile has a market capitalization of $309 billion. So figure $200 billion for a hostile takeover --- that's approaching the yearly cost of a Green New Deal plans, and you've only taken out one fossil fuel company.