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

Post by parasubvert » Wed, Sep 18, 2019, 6:08 AM UTC

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…

Post by parasubvert » Wed, Sep 18, 2019, 6:14 AM UTC

Udik wrote: post #70

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 gro…

Post by NeedMoreTea » Wed, Sep 18, 2019, 6:20 AM UTC

parasubvert wrote: post #169

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…

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

Post by learnstats2 » Wed, Sep 18, 2019, 6:28 AM UTC

hinkley wrote: post #98

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 I own shares in a retailer and I decide that, say, soda is bad, I can try to use my shareholder rights to talk to them about how prominently they display soda and possibly reducing their shelf real estate for soda. But what if I own shares of a soda company? What exactly should I do in that case? Try to convince them to exit their primary market and become an entirely different company? Why would I waste my time a…

Post by new2628 » Wed, Sep 18, 2019, 6:34 AM UTC

NeedMoreTea wrote: post #175

parasubvert wrote: post #169

Earlier quoted context omitted.

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

Much of the developed world already has deregulating populists - that's half the damn problem. Except populism never lasts, and populist regimes are always incredibly divisive and usually end discredited. It's what comes next that matters.