Recently I met the guy that dumped BP’s solar investments at a bar in New Haven. He wasn’t happy to do it, but it turned out it wasn’t in BP’s interest to move their investments away from high pollution, high profit energy. That is, for every dollar invested in solar or wind, they could have been making more money on natural gas or oil. BP is bound by law to maximize profit to their shareholders, so they dumped solar.
BP is made up of people, though, like the guy I met at the bar. Antony Burgmans, the chairman of BP’s board, is also a person. And, as it turns out, people would rather not have their kids experience a world a whole lot worse than the one we live in now. They’d rather not have their kids experience, say, ocean life destroyed by shifts in pH, temperatures four to seven Celsius degrees hotter and unprecedented natural disasters occurring regularly.
The people at BP will even admit this preference, and they suggest a solution. In their 2012 annual report they wrote: “Climate change represents a significant challenge for society and the energy industry … policy support is required to help commercialize effective lower-carbon options and technology.”
Policy — of course! Unfortunately, the folks at BP don’t come to work every morning to solve climate change; they’re more focused on making money by supplying the world with cheap energy. So none of them as individuals have much power to, for instance, invest in solar power that would reduce BP’s profits, even if it would personally make them better off to have a cooler planet.
I think this is pretty important, so I’ll say it again: No one at BP, or any other fossil fuel company, has the power to shift their business strategy enough to avert catastrophic climate change. But that doesn’t mean they’d suffer if we pursue better climate policy, If, like in Australia, a carbon tax of $23 per ton were enacted, BP would still be profitable and investors would still make money. If this seems dubious, consider that in 2011, the year after their disastrous gulf spill, BP reported 62 million tons of greenhouse gas emissions — while they made their shareholders $40 billion in pre-tax profits. That’s billions, not millions.
BP may not be actively investing in solar, but in mentioning better policy, its annual report shares some common ground with environmental advocates. Take President Barack Obama. This summer, Obama announced a climate action plan that directs the Environmental Protection Agency to clamp down on coal. During the speech, he also told us to “invest, divest [from fossil fuels].”
When the President said that, he wasn’t talking to policymakers or oil companies to let them know that he would be investing and divesting himself. If you were one of the 10,000 young people gathered in D.C. for Power Shift this October, he was talking to you. The president called on you to get into the streets and make a fuss. Why does he need you to do that?
It turns out, as a recent study from Oxford shows, the louder the kids at Yale and other campuses are about divesting, the more people at BP can start doing what they need to do. Which is to stop profiting off of actions that will fry our planet. Whether that will take a carbon tax, cap and trade or regulations enforcing emissions standards is a subject for a whole other op-ed.
My point? Oil and gas companies are like an obese and insatiable kid in front of an enormous cookie jar. They will keep eating until it kills them, and in this case, us as well. Cookies (cheap energy) are sweet. But that kid desperately needs rules that would put the lid on the cookie jar. And companies need rules that make destroying the planet damaging to their bottom line.
Luckily for people like BP’s board chair Antony Burgmans, a smaller dividend is a small price to pay to avoid climate catastrophe. And, luckily for everyone else, there are thousands of young people across the country who are willing to force policymakers to take the issue on.
So, Yale College students and Corporation trustees, help the good folks at BP out. Do them a favor and divest their stock.
Yonatan Landau is a member of the class of 2015 in the School of Management and the coalition coordinator for Fossil Free Yale. Contact him at firstname.lastname@example.org.