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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

#161

Post by nickserv »

NeedMoreTea wrote: post #154
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…

Doesn't this avoid the core point of decarbonising the economy? Rather than getting Chevron to limit emissions, we need them to cease emissions. Which for an oil company means find an entirely new line of business - hopefully something like renewables - or cease to exist. Allow a tiny few to continue for the purposes of creating plastics we can't easily substitute by something else. Yes, that expects and requires far…

Agreed. At this point I'm more inclined to follow the "seize their assets and jail their leaders" doctrine rather than a "let them continue to profit" one.

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

#162

Post by PeterStuer »

nickserv wrote: post #161
NeedMoreTea wrote: post #154

Earlier quoted context omitted.

Doesn't this avoid the core point of decarbonising the economy? Rather than getting Chevron to limit emissions, we need them to cease emissions. Which for an oil company means find an entirely new line of business - hopefully something like renewables - or cease to exist. Allow a tiny few to continue for the purposes of creating plastics we can't easily substitute by something else. Yes, that expects and requires far…

Agreed. At this point I'm more inclined to follow the "seize their assets and jail their leaders" doctrine rather than a "let them continue to profit" one.

I'd suggest, if you go that route, just revoking their drilling licence. I find it highly unlikely as current governments, with few exceptions, seem hell bent on extracting even more, even if that means using grotesqly environmental destructive practices such as fracking.

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

#163

Post by dragonwriter »

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…

> I think it's important to note that when you buy shares on the secondary market the company doesn't get any capital.

Companies are artificial abstractions. The people who invested in the company before you get money. If you consistently engage in a policy of engagement to deal with bad corporate citizens, you increase the positive financial rewards for earlier investors to use their governance influence to direct firms to bad corporate citizenship. Conversely, divestment does the opposite.

The magnitude of the effect of any one investor doing that is small, but that's the situation with all economic boycotts.

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

#164

Post by coliveira »

nickserv wrote: post #161
NeedMoreTea wrote: post #154

Earlier quoted context omitted.

Doesn't this avoid the core point of decarbonising the economy? Rather than getting Chevron to limit emissions, we need them to cease emissions. Which for an oil company means find an entirely new line of business - hopefully something like renewables - or cease to exist. Allow a tiny few to continue for the purposes of creating plastics we can't easily substitute by something else. Yes, that expects and requires far…

Agreed. At this point I'm more inclined to follow the "seize their assets and jail their leaders" doctrine rather than a "let them continue to profit" one.

Correct, we need to largely regulate these companies out of existence.

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

#165

Post by dragonwriter »

mikemotherwell wrote: post #160
noego wrote: post #135

Earlier quoted context omitted.

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 woul…

Is capital raising relevant? When was the last time a fossil fuel company raised capital? How is that the way to hurt a company? Also, markets price in these sorts of things. If divestment was a real threat, that would already be factored into the price. It is partly why the P/E ratio of BHP is 13.94, whereas it is 75.56 for Amazon. Lastly, with a lot of money in index funds (~50%), divestment seems close to impossib…

> Also, markets price in these sorts of things.

Markets price in the expected value of them, but since if divestment works, the impact is driven by the funds-available-for-investment weighted aggregate of public opinion, markets can only price it in if they have advance knowledge of both the content and wealth-distribution of future public opinion. Which they obviously don't.

(Even if they did, all this would be saying is "if divestment works, then it not only works but works retrocausally to reduce the stock price even before the decision to divest occurs." Which, whatever it is, isn't an argument against divestment.) If divestment was a real threat, that would already be factored into the price.

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

#166

Post by dragonwriter »

simonh wrote: post #130
sigstoat wrote: post #111

Earlier quoted context omitted.

certainly they could elect board members who'll hire CEOs to execute that plan.

Then minority’s shareholders will sue because their share value declined and the board’s legal obligation is to pursue shareholder value, not do what the majority owners of company want them to do. I’m torn on that, but minority’s shareholders have a legitimate expectation their rights should be protected.

> the board’s legal obligation is to pursue shareholder value

No, its not.

> not do what the majority owners of company want them to do.

Actually, the purpose laid out in most corporate charters is, within the law, to do exactly that.

> I’m torn on that, but minority’s shareholders have a legitimate expectation their rights should be protected.

They have a legitimate expectation that their rights should be protected, but the right you are basing this argument on does not exist.

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

#167

Post by DuskStar »

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…

> 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.

I think a slight modification holds, though:

"all owners will seek only to maximize returns across all of their holdings, to themselves"

Chevron causing environmental damage costing me $100 personally outweighs the extra $50 those shortcuts added to my fraction of the company, etc.

And if you include moral/social costs on top of that, then IMO there really isn't anything that the expanded "maximize returns" statement doesn't cover.

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

#168

Post by coliveira »

windexh8er wrote: post #143
ineedasername wrote: post #134

Earlier quoted context omitted.

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?

For most people that's the wrong question. If you have capital that can be applied to long term resolute ideals you likely don't have to worry about capital in general. We all know fossil fuels have have an expiration date. We can easily state that money invested in building next generation power acquisition, delivery and storage will displace them. But again, you need a stack of chips to play.

This is a good idea, unfortunately when it comes to investment it is not enough for a company to be in the right track. It also needs to dominate the market, which is more difficult. For example, lots of companies were created in the Internet bubble, but only a few survived and came to dominate the market.

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

#169

Post by parasubvert »

NeedMoreTea wrote: post #154
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…

Doesn't this avoid the core point of decarbonising the economy? Rather than getting Chevron to limit emissions, we need them to cease emissions. Which for an oil company means find an entirely new line of business - hopefully something like renewables - or cease to exist. Allow a tiny few to continue for the purposes of creating plastics we can't easily substitute by something else. Yes, that expects and requires far…

Cutting off the supply without shifting demand doesn’t solve the problem though, it aggravates people to vote in populists who will deregulate.

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

#170

Post by parasubvert »

nickserv wrote: post #161
NeedMoreTea wrote: post #154

Earlier quoted context omitted.

Doesn't this avoid the core point of decarbonising the economy? Rather than getting Chevron to limit emissions, we need them to cease emissions. Which for an oil company means find an entirely new line of business - hopefully something like renewables - or cease to exist. Allow a tiny few to continue for the purposes of creating plastics we can't easily substitute by something else. Yes, that expects and requires far…

Agreed. At this point I'm more inclined to follow the "seize their assets and jail their leaders" doctrine rather than a "let them continue to profit" one.

What country would ever vote for such a policy? It is immensely impractical. This level of radicalism is how you get right wing populists who will rather happily jail the environmental radicals.

Most of the world continues to rely on fossil fuel for the essentials of life. Change that before throwing execs in jail.

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