[Editor’s note: In this series longtime Tyee contributing editor Christopher Pollon has explored whether it’s possible for him — a “small fry retail investor with a moderate appetite for risk” — to invest a small amount of money without ending up owning stocks in fossil fuel companies or socially harmful industries like tobacco and weapons manufacturing. In the final instalment, he discusses the divestment movement targeting fossil fuels with author and activist Naomi Klein.]
Christopher Pollon: In January, New York announced it was divesting about US$5 billion in fossil fuel investments from its pension funds, in addition to suing big oil companies for climate-related damages. Why was that moment important, and what message did that send to the world?
Naomi Klein: I was there. I think a lot of it has to do with the symbolic significance of New York as a city. It’s the largest city in the U.S., it’s maybe the most famous city in the world. It’s also a coastal city that is directly impacted by climate change. A big part of the reason why it was so significant has to do with Trump, and the various ways in which cities have stepped up as the federal government in the U.S. has just abandoned climate policy and indeed is actively denying the reality of climate change in lots of ways. So ever since Trump pulled out of the Paris Accord, we’ve seen some really interesting movement from cities. On the day Trump pulled out of the Paris Accord, the mayor of Pittsburgh announced the city would get to 100 per cent renewable energy [faster] than any other city.
We don’t get our energy from the federal level, key decisions around transit are made at the urban level and, of course, we’ve had access to various pools of money — whether it’s [city] pension funds or endowments. So the significance of what [NYC Mayor] Bill de Blasio did was in the context of people trying to figure out what it means for the world’s largest economy to be headed by a climate change denier. And whether that means we’re all cooked, or that means there are other levers that can be used to more effect.
My position ever since Trump was elected is that because there is such a deranged administration in charge at the federal level in the world’s largest economy, in the world’s largest historical emitter, everywhere Trump does not control, we have to do more. And that means countries that are not the U.S. that are headed by supposedly progressive climate leaders like Justin Trudeau have to do more and not less because of Trump.
Did the rise of Trump strengthen or weaken the calls for divestment from fossil fuels?
Some of the arguments against divestment, at a place like Harvard University for example, what their administration would say is we don’t believe this is the correct space to have maximum impact, we think climate policy should be made at the federal level… But after Trump was elected that argument really fell apart, because it’s clear that there’s not going to be federal climate regulation, so whereever it is possible to affect change, whether it’s your city council, your university, your pension fund, whatever tools that are within our reach, we have to use to maximum effect. So the argument for divestment got a lot stronger after Trump was elected.
There are a lot of questions lately about whether fossil fuel companies are disclosing enough to their shareholders about the risks to their business from climate change. What should some of these companies be disclosing to their shareholders that they are not?
I think one of the things they have been very dishonest about is their position on the Paris Climate Accord, and if it should be entirely disregarded.
Immediately after the agreement was signed, we saw statements from oil majors, Exxon for example, where they were reassuring shareholders that they thought oil and gas would be 80 per cent of the energy mix for four decades into the future, which is entirely incompatible with temperature targets in the Paris Accord. So I think they need to either say they have a strategy to prevent the implementation of the goals in the Paris Accord, or they need to explain how their fossil fuel reserves are compatible with that. And no fossil fuel company has seriously grappled with the incompatibility of current fossil fuel production and meeting the Paris Climate Accord’s temperature targets. And that’s just for what’s currently in production, leaving reserves aside.
I hear the term “stranded assets” a lot, and looking at a company like Suncor that has a lot of its holdings in the oil sands, what is the future of the Alberta oil sands looking decades out? Do you think we will see a lot of it as stranded assets that stay in the ground?
When we came up with the strategy of launching divestment as a national campaign, which was a conversation I was part of with Bill McKibbon, it was after the Carbon Bubble report first came out. And the phrase “stranded asset” was being used for the first time. Now when I read that report where the authors were warning investors that… there was no way for these companies to burn their fossil fuel reserves and for us to meet that two-degree target, therefore these were going to become stranded assets and they needed to warn investors, my blood ran cold, because I believe that they fully intend to burn much of that carbon, climate change be damned. And so the only thing that changes that equation is if the climate movement grows strong enough that this non-legally binding agreement becomes the law of the land around the world.
Fossil fuel companies are counting on us blowing past that two-degree temperature target. We have to strand the assets, but there is no inevitability that these will become stranded assets. Some of them will become stranded assets, but the real concern is that they will burn it, and bring the planet to three to four degrees warming.
I wanted to ask about the evolution of fossil fuel companies — Shell has abandoned a lot of its oil sands assets and is positioning natural gas as a bridge to a carbon-free future. Is natural gas a distraction, or is it a bridge that gets us to where we need to be with clean energy?
Natural gas is an incredibly potent greenhouse gas. It’s a huge amount of methane, which has a much more rapid warming effect than carbon. And much of the natural gas that companies like Shell are selling is fracked natural gas, which creates even more opportunities for methane leakage and also creates all kinds of other environmental problems for water and so on. So no, I don’t think natural gas is a bridge fuel. I also don’t believe that we can take it at face value that the oil majors who have announced they are pulling out of the tar sands are doing so for good, to be honest with you. Because I think that decision has a lot more to do with the price of oil than it does with their interest in transitioning away from heavy oil.
Is it a concern that the price of oil is starting to recover?
We are seeing the price of oil climb back up, and it’s very worrying, because a lot of the decisions that have been made, like to not push ahead with Arctic drilling for example, to scale back investment in the Alberta tar sands, even to scale back fracking to some degree, are a combination of a response to political pushback and the fact that a lot of this extraction is not economic when oil is at $50 or $60 a barrel. But now that we are back around the $80 mark, it does start to make a lot more sense. So we may well start to see some of these oil majors go back in.
One of the intriguing things about the Leap Manifesto was your look at potential sources of revenue to fund the transformation of society and economy. One of them was the whole idea of ending fossil fuel subsidies you write are worth at least $775 billion globally. Has there been any movement on that? It seems like an important thing.
Yes, it is, and Trudeau ran a campaign promising to phase out fossil fuel subsidies and he’s going in the exact opposite direction by buying the Kinder Morgan pipeline outright and becoming the owner of the Kinder Morgan expansion. So rather than phase out these subsidies to third party fossil fuel companies, they are doubling down and becoming a direct investor. [Klein adds that a group called Oil Change International continue to do good work on this issue, including a current campaign they call “separating oil and state.”]
I just published a little book last week [The Battle for Paradise]. It’s about Puerto Rico and the aftermath of Hurricane Maria.
The Leap Manifesto — it’s an ongoing project?
Yes. I’m still working with The Leap, which is the organization that came out of it, and a lot of the work we are doing is with groups who have taken the [manifesto] and localized it to their cities. So there are Leap groups that have formed in Los Angeles and London, really iconic cities that are looking at how they can turn this into policy at the local level. If you go to TheLeap.org you’ll see some of the stuff that is going on.
Teaser photo credit by Kourosh Keshiri.