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

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

#61

Post by Havoc »

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'm pretty unclear on how anyone even thinks divestment works, actually.

Bank/major fund/major anything announces no more coal investment.

If you a early stage/small player that just took the jam out of your doughnut.

>But that's non-investment, not divestment.

Same thing at sector scale.

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

#64

Post by sarah180 »

He's probably right that there are much more effective ways to focus resources & energy, but you'd have to believe that markets and elasticity don't exist to believe the impact is zero.

If you reduce the pool of investors, the cost of access capital goes up. This means companies that would start a new fossil fuel project will have to give up more money to get investment or loans. Most projects will be unaffected, but this will be the difference between some marginal projects happening and not happening.

This is pretty basic economics, though perhaps Gates has a reason in mind not to believe this will apply.

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

#65

Post by crankylinuxuser »

This, I would believe is a false hit piece that is trying to protect coal, oil, and gas.

https://www.newyorker.com/news/daily-comment/money-is-the-ox...

"It has become the largest such campaign in history: funds worth more than eleven trillion dollars have divested some or all of their fossil-fuel holdings. And it has been effective: when Peabody Energy, the largest American coal company, filed for bankruptcy, in 2016, it cited divestment as one of the pressures weighing on its business, and, this year, Shell called divestment a “material adverse effect” on its performance."

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

#67

Post by ahupp »

There's an efficient markets reason to believe this. Say you have some estimate of the value of all future earnings of some business, and then a group of people divests and pushes down the share price. The future earnings haven't changed, so this pushes down the P/E ratio and makes the stock that much more attractive to buyers who aren't divesting. It's just not possible for it to have that much price impact.

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

#68

Post by jacquesm »

emckay wrote: post #20

Divestment also results in less shareholder oversight of emission heavy companies because environmentally conscious investors are selling their shares to investors with less scruples. This isn't just theoretical. According to Fossil Free, asset managers with about 10 trillion under management have committed to divesting. If you assume 10% of that is tracking something like the S&P 500, then these investors have sold…

They may have lost that vote, but how did it affect the stockprice?

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

#69

Post by mochris »

emckay wrote: post #20

Divestment also results in less shareholder oversight of emission heavy companies because environmentally conscious investors are selling their shares to investors with less scruples. This isn't just theoretical. According to Fossil Free, asset managers with about 10 trillion under management have committed to divesting. If you assume 10% of that is tracking something like the S&P 500, then these investors have sold…

I've divested from oil companies, not because I think it will change corporate governance at XOM or BP, but because I like to buy things that I can hold for a decade or three, without thinking too hard about them.

I don't want to spend my time thinking about when, precisely, XOM and BP will have peaked. I'd rather just get rid of them and free up that mental space to concentrate on what's next in the world of energy generation, storage, and transmission.

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

#70

Post by Udik »

For a start, I can't even understand what is exactly the point of advocating any action against fossil fuel companies. After all, those companies only exist because we, directly or indirectly, buy their products. And we buy their products because they're cheaper than the alternatives, or even irreplaceable.

It's as if everybody were asking the government to take action against the supermarket where we all do our grocery shopping. We could ask the government to impose a heavy tax on our shopping (which we'd have to pay dearly, of course) but no, we want some action to be taken against the company that owns it. What is the purpose?

Another commenter links an article on the Guardian that claims that only 100 companies are responsible for 70% of the global greenhouse gasses emissions. It's as if those companies were producing and consuming the fuel themselves. No, those companies sell fossil fuels to us, we are buying and consuming it.

Am I being extraordinarily naive? Or this thing just doesn't make sense?

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