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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

#131

Post by strainer »

emckay wrote: post #118
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…

Here are the promised citations: 1. $10 trillion divested: https://gofossilfree.org/divestment/commitments/ 2. Chevron's shareholder proposal: https://www.asyousow.org/resolutions/2017/12/31/chevron-corp... 3. Chevron makes up about 1% of the S&P 500. 1% * 10% * $10 trillion = $100 million = 78 million shares of CVX at price during 2018 shareholder meeting 4. If 78 million shares voted YES on proposal instead of NO,…

Does this case extend to general advice though - that people should stay invested in fossil fuel companies in order to regulate them a bit? It should follow that if we invest more in fossil fuel extraction we can regulate them more. It seems to confound reasonable expectations of what results from investment.

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

#132

Post by patrickthebold »

strainer wrote: post #131
emckay wrote: post #118

Earlier quoted context omitted.

Here are the promised citations: 1. $10 trillion divested: https://gofossilfree.org/divestment/commitments/ 2. Chevron's shareholder proposal: https://www.asyousow.org/resolutions/2017/12/31/chevron-corp... 3. Chevron makes up about 1% of the S&P 500. 1% * 10% * $10 trillion = $100 million = 78 million shares of CVX at price during 2018 shareholder meeting 4. If 78 million shares voted YES on proposal instead of NO,…

Does this case extend to general advice though - that people should stay invested in fossil fuel companies in order to regulate them a bit? It should follow that if we invest more in fossil fuel extraction we can regulate them more. It seems to confound reasonable expectations of what results from investment.

I think it's important to note that when you buy shares on the secondary market the company doesn't get any capital. You are just trading ownership for cash with the current owners.

There's a somewhat subtle and pervasive assumption that all owners will seek only to maximize returns (or similar) but that notion really needs to go.

Even with that assumption, it doesn't matter if you own shares in fossil fuel companies since all investors are equivalent.

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

#133

Post by ineedasername »

Sure, unless everyone divests, a few people selling will drive down the share price only until those not selling realize the asset is undervalued and buy the price back up. All that, without actually changing the production and consumption model.

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

#134

Post by ineedasername »

mochris wrote: post #69
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…

Sure, that makes a lot of sense, but what companies can you invest in that you wouldn't have to worry about for that long?

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

#135

Post by noego »

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…

The argument made by most economists and Bill Gates is that divestment does not drive down the stock price, unless it is practiced by a overwhelming majority of all investors. The reasoning is that anyone not participating in the divestment scheme will simply bid the share price back up to near the market value.

If divestment did indeed drive down share price, it would succeed in hurting the company. The company would have to issue more shares when raising capital in future. It would also have to issue its employees more shares to remain competitive in compensation.

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

#136

Post by ineedasername »

dr_dshiv wrote: post #128
armenarmen wrote: post #105

Earlier quoted context omitted.

Yeah, but countries != companies. Divesting from SA meant smaller tax base, fewer jobs and a fall from international prominence. Divesting from a company/industry means that the stock price may fall. Assuming that the actual profitability of the company remains unchanged all divesting did was make the stock a better buy.

Why wouldn't SA companies simply become a better buy?

Because people actually stopped buying the products along with not investing in companies. The equivalent with fossil fuel investment would be that people actually stop using fossil fuels, which isn't what happens with divestment.

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

#137

Post by strainer »

patrickthebold wrote: post #132
strainer wrote: post #131

Earlier quoted context omitted.

Does this case extend to general advice though - that people should stay invested in fossil fuel companies in order to regulate them a bit? It should follow that if we invest more in fossil fuel extraction we can regulate them more. It seems to confound reasonable expectations of what results from investment.

I think it's important to note that when you buy shares on the secondary market the company doesn't get any capital. You are just trading ownership for cash with the current owners. There's a somewhat subtle and pervasive assumption that all owners will seek only to maximize returns (or similar) but that notion really needs to go. Even with that assumption, it doesn't matter if you own shares in fossil fuel companies…

It might be rather intangible, but I expect there must be a strong tendency for businesses to benefit overall when their shares are bought or kept rather than sold.

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

#138

Post by triceratops »

zackmorris wrote: post #99
triceratops wrote: post #6

You can't fix a tragedy of the commons with individual action.

Also I would argue that the smug truisms that people spout such as "divestment won't solve climate change" have a very damaging effect on causes that require concerted action by the public. For example the "Penn & Teller Bull$#!@: Recycling" episode left many viewers under the impression that recycling is a waste of time because it's not mature yet and is sometimes mismanaged. That probably lowered global recycling b…

I'm not saying "do nothing". I think legislation is a better tool to fix this problem and everyone's time would be best spent on working on that.

> Nobody should listen to Al Gore about global warming because he flies a private jet!

Well, I think we should still listen to him. He could also fly first-class and set a better example. But average Joe passenger won't fly less just because "it's good for the planet". He will fly less if it starts to cost more because of a carbon tax.

> We can't raise taxes on cigarettes because people will just buy them anyway no matter how much they cost!

That's not true in the slightest; cigarette consumption is inversely correlated to taxes. A cigarette tax is the opposite of individual action. I'm strongly in support of a carbon tax.

> Why bother preventing deforestation when nature does what it wants with forest fires anyway!

That's...a super-weird statement to make in the context of what I said. Preventing deforestation can't be accomplished with individual action e.g. by boycotting Amazon-grown soy or something. You need laws and tariffs.

FWIW I also recycle and try to keep up with the latest and greatest on plastic sorting. But I also know it doesn't do anything in the big picture. Add a $10 fine for badly sorted recycling and the problem will fix itself.

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

#139

Post by 3131s »

Isn't this article presenting a false dichotomy? How is divesting from fossil fuels mutually exclusive to putting your money behind "tech that helps cut emissions instead"? In the short term at least, you'll have more money to do exactly that after divesting.

The only rationale I can see for having this mindset is that 1) it is imperative to make money in order to reinvest in better causes, and 2) investing in fossils fuels is the best way to maximize profit.

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

#140

Post by momokoko »

emckay wrote: post #117
jdhn wrote: post #71

Earlier quoted context omitted.

Let's say that it passed. Is Chevron now legally obliged to actually limit their methane emissions, or can they ignore it if they so choose?

Resolutions like this one are non-binding. The real power held by shareholders is to fire directors, so if a company's board doesn't comply with the shareholder resolution the shareholders can vote against the directors at the next annual meeting. In practice, companies "mostly meet" or "completely met" their commitments in response to shareholder engagement 89% of the time according to a 2015 report by Ceres [0]. [0…

Just be honest. It's bullshit. That vote and any vote like it means absolutely nothing. You know it, and anyone with any knowledge of this knows it.

We really really need to stop these fake feel good energy sinks. What you said was at best disingenuous, and at worst just lying.

I want to remove fossil fuels as much as anyone, but I will not do it by tricking people. You should try and work on some ethics.

There are two insanely simple things to end global warming if you live in the US. Stop driving to work and stop eating meat. If only a 30% of the population does that, all this is solved immediately. Pretending resolutions matter simply helps people pretend they can't solve the entire problem with two simple actions

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