Don't just divest, re-invest
It’s hard to know how much of a difference Hurricane Sandy made in the outcome of last week’s election, but many of us were pleased to hear President Obama finally reference climate change in his acceptance speech:
"We want our children to live in an America… that isn’t threatened by the destructive power of a warming planet.”
However brief those comments, it was a small step in the right direction following a presidential campaign that was notably silent on the topic of global warming. Even after a record-breaking summer of arctic melting, droughts, and heat, the mainstream media and debate moderators had given Obama and Romney a free pass on addressing climate change. In fact, it took the journalistic stalwarts at MTV to confront Obama on his silence on the crisis. Obama’s lame response was that he was “surprised [climate] didn't come up in one of the debates.”
With 70% of Americans polled (before Sandy hit the Eastern Seaboard) stating that they believe in the reality of climate change, you have to wonder why the silence.
Part of the answer, as Bill McKibben and the folks at 350.org rightly point out, is the financial influence of the fossil fuel industry and their front groups. In addition to funneling hundreds of millions of dollars to candidates, they spent well over $150 million dollars running ads during the campaign season to promote fossil fuels or attack clean energy.
And so 350.org has made it their focus to go after the fossil fuel industry, using social media, guile, moral conviction and — imagine this — facts in lieu of big bucks.
On the day following the election, 350.org kicked of a 20-city, 20-day “Do the Math” tour to "mount an unprecedented campaign to cut off the industry’s financial and political support by divesting our schools, churches and government from fossil fuels."
Now, there are a number of legitimate critiques of this divestment strategy that I don't intend to ignore but are ultimately tangential to the point of this post. As one means of engaging people to express their opposition to the nefarious tactics of the industry, divestment is a fine strategy — but I don't think for one moment that McKibben believes divestment by universities, other institutions, and concerned individuals is going to starve Big Oil, Coal & Gas of needed capital. The goal is to make a statement and to engage.
That said, I want to set out a challenge to everyone who recognizes the need to divest from the fossil fuel industry: Moving our investments from a mutual fund that holds shares in ExxonMobil to some kind of socially responsible investment (SRI) is important, but it’s just a baby step.
What we really need is to invest our capital (both financial and sweat) in community-owned, distributed, and small-scale renewable energy. Why? Because we must fundamentally remake the energy economy as if nature, people, and the future actually mattered.
That means investing in renewable energy that is distributed, because renewable sources themselves are diffuse and distributed, and because redundancy and distribution are key to building resilience in the face of shocks like Superstorm Sandy, which are increasingly likely in a climate-changed world.
It also means investing in renewable energy that is community-owned, because we've seen what happens when large, multinational companies control essential human needs, whether they be food, healthcare, or energy. By their very nature, these corporations place profits and shareholders over the well-being of the communities they ostensibly serve. A new energy future must be part of a new economy future, a new economy that puts people and planet over profits.
And finally, it means investing in renewable energy that is small-scale, again because distribution increases resilience but also because even renewable energy can have profoundly negative impacts on ecosystems if not sited and scaled in ways that are appropriate to the environment in which it — and we — reside.
Sounds like a tall order, I know. But thankfully there are a number of great, replicable examples of individuals, institutions, and communities meeting the challenge. Below are just a few. (For a much more complete resource, check out Power from the People: How to Organize, Launch, and Finance Local Energy Projects by Greg Pahl, the 2nd in the Community Resilience Guide Series published by Chelsea Green Publishing and Post Carbon Institute.)
- Invest in Yourself. The single best thing we as individuals can do to divest is to reinvest in projects that reduce our personal and household energy use. The bad news is that fossil fuels are embedded in virtually everything we do — from our homes to our cars to our food. The good news is that means there are lots of ways to get started, and lots of reinvestment opportunities. Many of these can actually provide a better return on investment than what you’ll get investing in the market, not to mention help build your own energy resilience. Chapter Four from Power from the People, “Your Household’s Energy Resilience” (excerpted for free here), is a great place to start thinking about how.
- Crowdfund Renewable Projects. Thanks to new crowdfunding legislation, a number of new online platforms like Solar Mosaic (launching soon) are making it possible for individuals to fund solar projects in their own communities or elsewhere. Unlike platforms like Kickstarter, Solar Mosaic will pay back investments once the solar has been installed.
- Buy Clean Energy Victory Bonds. The good folks at Green America are spearheading the call for a new Clean Energy Victory Bond that would "allow all Americans to invest in Treasury Bonds for as little as $25 each that will fund a clean energy future." In August, the Clean Energy Victory Bonds Act of 2012 was introduced in the House of Representatives. Much like the victory bonds that contributed greatly to the WWII mobilization effort, the hope is that Clean Energy Victory Bonds can engage tens of millions of Americans in investing $50B in a new energy future. If you agree this is a good idea, voice your support.
The primary target of 350.org's call for divestment are colleges and universities who have tens of billions of dollars invested in fossil fuel companies. Just a couple of days into the campaign, Unity College announced its plan to divest from fossil fuels. But Universities should not only be incentivized to divest from these holdings, they should be encouraged to reinvest in on-campus energy efficiency and renewable energy projects.
Middlebury College, where 350.org has its roots, is a great example of a university that has done just that by building its own biomass gasification plant to replace about 1 million gallons of oil that were previously being used. In an interview for Power from the People, Tom Corbin, the director of business services at the college, explained their reasoning:
“The real incentive for us was the price of oil, our inability to control it, and the fact that we were subject to an extremely volatile price for fuel,” Corbin says. “There were also questions about the possibility of future interruptions in the supply of oil. The fact that we were sending all of this money out of the county, the state, or even the country was another concern. So, when we switched over to biomass, we gained greater control over our energy future, and the money is now being spent more locally; that’s important to us.”
A number of universities have developed revolving loan funds specifically designed to fund sustainability projects on campus. The American College & University Presidents’ Climate Commitment has some terrific resources on their website on campus revolving loan funds, including case studies and guides from the Sustainable Endowments Institute and the Association for the Advancement of Sustainability in High Education (AASHE).
In the face of the realities of our energy conundrum and the lack of policy leadership coming from Washington, D.C. and state capitols, many communities have taken power — literally and figuratively — into their own hands.
- Energy Cooperatives: Across the country, a number of community co-ops have been formed for everything from solar pv and wind purchasing and installation, to energy efficiency, to growing and selling biofuels. Some of the most innovative and impactful are cooperatives like Co-op Power in New England and the Evergreen Cooperative in Cleveland, Ohio create employee-owned businesses and jobs in the process. The Community Power Network has a great listing of resources and replicable models, detailing various paths communities can take to producing their own energy. The Center for Social Innovation provides an important case study, based on the Boston Energy Service Cooperative, of how to ensure that communities of color/disadvantaged communities can fully participate in, and benefit from, community-owned energy.
- Feed-in-Tariffs: Some communities have employed policy mechanisms to take control of their energy future or give a big boost to local energy production. One of the most promising techniques is Feed-in-Tariffs (FITs), which provide businesses and home owners with long term contracts for electricity they produce, thus incentivizing installation of renewable energy above and beyond what that homeowner or business needs for their own individual use. After seeing FITs work with great success in Europe, the City of Gainesville, Florida enacted a FIT program in 2008. In just the first three years, Gainesville quickly overtook the State of California as the highest per capita solar deployment in the country.
- Community Choice Aggregation: CCAs allow local governments to procure and sell electricity to customers within their jurisdiction. Not surprisingly, CCAs have cropped up first in states like Vermont and California, but they are also emerging in places like Ohio. The City of San Francisco just recently became (I believe) the largest municipality to approve a CCA program. While having the power to purchase renewable energy is an important first step for local governments, some communities — like my own, in Sonoma County — are aiming bigger by seeking to purchase renewable energy that's also produced locally.
Again, these are just a few examples, but I hope they serve to show that it is possible for us to not only divest from shares in fossil fuel companies, but invest in a new energy economy. And, of course, if we're really serious about “going fossil free,” what’s ultimately required is reducing our actual use.
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