Carbon Tracker 200: Our Industry Targets

Our divestment movement is targeting the top 200 companies that own the vast majority of the world’s coal, oil, and gas reserves as analyzed by the Carbon Tracker Institute.  Fossil fuel companies calculate the value of these reserves into their net value and stock prices and will burn every ounce of carbon they own in the pursuit of profit.  With a combined value of $20 trillion, you can bet the industry isn’t going to stop extracting, transporting, and burning those coal, oil, and gas reserves on its own.  But in order to keep warming below an additional 2*C – a limit broadly agreed upon by the scientific community and countries including the US – 80% of these reserves must remain in the ground to curb runaway climate change. 

“The contradiction between what governments have agreed upon and the growth assumptions made by the fossil fuel industry is “so large it represents a systemic global financial risk”, which dwarfs previous bubbles.  As Nauru Ambassador Moses points out, “all proven fossil fuel reserves – those held by publicly traded and national companies – could be valued at over $27 trillion. For comparison, the debt overhang from the recent housing bubble has been estimated to be around $4 trillion.”1  

Our divestment campaign is part of a powerful movement that has already won many landmark victories.  It’s only a matter of time before the US government will start regulating carbon like the pollutant it is.  When that happens, the “carbon bubble” will burst and the value of these companies will plummet. A recent report from S&P IQ cited in the Associated Press actually determined that endowments would have made greater returns if they had divested from the industry 10 years ago.

Of course, we aren’t just targeting this industry because of the carbon math and investment reasons alone.  The companies we’re targeting are also the biggest causes of environmental injustice, especially in marginalized communitites.  They’re companies like Alpha Natural Resources that blow up mountains in Appalachia through mountaintop removal, a practice that causes coal mining communities to be 50% more likely to die from cancer and 42% more likely to be born with birth defects.  They’re companies like Peabody Coal that violate indigenous’ communities sovereignty.  One example is their poisoning of the aquifer on Black Mesa reservation, forcing residents to drive 30-40 miles each day for potable water for themselves and their livestock.  They’re companies like ExxonMobil whose leaky pipeline Pegasus displaced 20 families when it drenched Mayflower, AK in 300,000 gallons of tar sands oil, the long-term effects of which remain to be seen.  They’re all companies that are spending billions for political influence, buying legislators’ votes to approve tar sands pipelines and getting a 5800% return on that money through continued subsidies for fossil fuels instead of clean energy.

Divestment is just as much a pathway to economic and environmental justice as it as a measure to protect endowments’ value from plummeting when the carbon bubble bursts and redirect funds to build the clean energy future we need to survive on earth.  It’s an escalation of our climate movement, a new strategy to target the root of climate change.  It comes from the lessons our movement learned from pushing for carbon regulation through legislation in a corrupted political system in 2009.  It comes from the necessity to act systemically in the face of this climate crisis, a crisis that cannot be curbed by only fighting this industry one coal plant or pipeline permit at a time.  

Our divestment movement is only just beginning so the breadth and depth of its impact still remains to be seen; however, we are already seeing our campaign stigmatize the industry in the media and public sphere.  As more universities, churches, cities, and pension funds divest, in conjunction with many other tactics being employed by our friends in this movement, we will succeed in reducing the fossil fuel industry's dominance in communities, governments, and the market, making way for the clean energy economy to rise to meet our energy needs.

Sources: (1) Betting on Climate Failure by Alex Lenferna and (2) Unburnable Carbon 2013: Wasted Capital and Stranded Assets from the Carbon Tracker Institute.