Stanford University's recent decision to unload coal from its endowment and Harvard's decision to take more tepid steps a few weeks earlier means that the student campaigns that forced the hands of both institutions are coming soon to a campus near you.
These campaigns go by many names, including 350.org -- named for the parts per million of CO2 that scientists consider the absolute limit to avoid catastrophe, and everyone's favorite: the UK-based "Mum, Dad, your pension is f@!#ing up my future." Stanford employed careful steps to make the decision, including an Advisory Panel on Investment Responsibility that engaged faculty alongside students. The endowment managers will move deliberately from here to move out of stocks and funds that invest in coal companies. A Stanford spokesperson was quick to acknowledge that while the dollars involved sound big, it is relatively meaningless as a percentage of dollars invested. The impact on the endowment itself will be negligible.
Not everyone is a fan. Ivo Welch, professor at UCLA's Anderson School of Management, penned a response in the New York Times, titled "Why Divestment Fails," based on research and observations that disinvestment at the time of Apartheid in South Africa failed to actually shape policy or real life solutions.
Hogwash. You can't measure the return on a moral act. Stanford is not declaring victory on overcoming global warming. It is using its voice to say it's time to declare war on carbon emissions. It is a political act and step towards what is needed: a market-price signal in the form of a tax on carbon. I think Stanford's stance is a game-changer.
Timed with the president's PR campaign to build popular support for addressing climate change in a country that likes its freedoms (including the freedom to pollute), and two weeks after BlackRock and the NRDC announced an ex-Fossil Fuels Index Series created with carbon-rejecting investors like Stanford in mind, the university's decision suggests the political tide may be turning at last.
I see three headlines coming off of Stanford's move:
One, Science Matters. This is Stanford, after all -- home base of the Silicon Valley, the Linear Accelerator, a world-class medical school and 31 Nobel Laureates (not to mention an endowment of $18.7 billion). The importance of science is at the core of the University's decision.
Two, California Matters. When the nation is stuck, California leads, especially in matters of environmental sustainability. Stanford just voted for its home state to stay on the forefront. (I only wish my alma mater, UCLA, had beaten them to the punch.)
As the eighth-largest economy in the world, California has shaped national environmental policies for decades, from the CAFE standards on auto emissions to the new chemicals program REACH. California is ahead of the curve on a carbon trading system and will help the US forge ahead whether we like it or not.
Three, and most important, Young People Matter. One of the most cynical responses to Professor Welch's column suggests Stanford is just worried about keeping access to the best and brightest students. I have no idea if that is true or not, but enlightened self-interest is a powerful tool. Let's use it.
One of the curious things that make up our national lethargy on climate is the deafening silence from young Americans who will pay the biggest costs of global warming -- personally and financially. It's a relief to see students step up on the opportunity to shape their future.
Last week a student was arrested at Harvard for blocking the administration building in his own protest for divestment. The Stanford vote will prove a powerful energizer at Harvard and beyond. As students continue to build their political skills and muscle on campus, they practice for the bigger task of sending the right message through the ballot box: global warming is the issue of our age. There is no time to waste.
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