Divestment fever spreads to Canada as students, doctors launch campaign against fossil-fuel holdings

FossilFreeCanadaLogoCalls in the United States for universities to divest their fossil-fuel holdings are starting to spread into Canada, where students and doctors are beginning to speak out.

Students from across the country are taking part Wednesday in what’s being called Fossil Fools Day, described as the first national day of action for the Fossil Free Canada campaign, an initiative being led by the Canadian Youth Climate Coalition.

More than a dozen Canadian university campuses are planning marches and rallies in an effort to urge their university administrations to divest their endowments from fossil fuel and pipeline companies. Many already have active campaigns.

“To date four campuses in the United States have divested, and administrations at McGill University and the University of New Brunswick-Fredericton are reviewing divestment,” according to a statement from the youth coalition.

Environmental activist and journalist Bill McKibben, through his organization 350.org, is leading U.S. efforts. They began last November with McKibben’s 21-city “Do The Math” tour, which spread a simple message: avoiding the worst effects of climate change means leaving most of the world’s proven reserves of fossil fuels in the ground.

McKibben argues that society can’t afford to release more than 565 gigatons of carbon dioxide through the burning of fossil fuels if we are to keep average global temperatures from rising more than 2 degrees C. The problem is that fossil-fuel companies have what amounts to 2,795 gigatons in reserve, and they’re expecting all of it to be burned.

Those surplus reserves are being called “unburnable carbon.” The International Energy Agency estimates that on our current path the total allowable global carbon budget could be exhausted by 2017, assuming the world sticks with the 2 degree C scenario.

The reality is beginning to irk financial giants such as HSBC, which recently warned investors that oil and gas giants such as BP, Royal Dutch Shell and Norway’s Statoil are at risk of losing up to 60 per cent of their market value if the carbon on their balance sheets – carbon that they and their shareholders are expecting to see burned – becomes unburnable and therefore unsellable. The Institute of Actuaries, Mercer and KPMG are among others who have raised red flags.

McKibben’s message is beginning to sink in. The student bodies of more than 300 post-secondary campuses in the United States have joined 350.org’s Go Fossil Free campaign, and so far a handful of small colleges have committed to divesting. Many more are studying it, at the strong urgings of their student bodies. McKibben estimates that universities and colleges in the U.S. hold endowments worth well over $400 million, but beyond that even cities and states are taking notice and feeling the pressure of what can be described now as a global movement.

In Canada, where divestment pressure has been slower to emerge, the Canadian Youth Climate Coalition launched its own McKibben-style campaign in early February. Cameron Fenton, national director of the coalition, said many universities in Canada are doing great work around sustainability, such as making campuses “greener,” but their investments haven’t followed the same path. “Building a sustainable campus that is bankrolling and profiting from climate change is a Pyrrhic victory at best,” Fenton wrote in a recent commentary in the Toronto Star.

A new study from the Ottawa-based Canadian Centre for Policy Alternatives found that Canada’s proven reserves of oil, bitumen, gas and coal are equivalent to 91 gigatons of carbon dioxide, or 18 per cent of the global carbon budget, based on an assessment of 114 fossil fuel companies operating in Canada. Add in probable reserves and the number swells to 174 gigatons, while possible reserves sit at 1,192 gigatons, or more than double the world’s carbon budget.

Assuming conservatively that Canada’s share of the global carbon budget is 20 gigatons, this would imply, according to the study, that 78 per cent of proven reserves and 89 per cent of proven and probable reserves must be left in the ground. “Canada is experiencing a carbon bubble that must be strategically deflated in the move to a clean energy economy,” according to the policy alternatives.

“Because public valuation of companies largely ignores big picture climate realities, there is a systemic risk inherent in the fossil fuel extraction and production industry,” it concluded. “Our analysis finds that Canadian financial markets have failed to consider climate risk. The shock associated with coming global efforts to manage carbon could leave key sectors such as pension funds vulnerable.”

Canadian doctors, meanwhile, are reminding citizens that investments aren’t the only risk. The health of Canadians are being dramatically impacted by the burning of coal and other fossil fuels, and that alone is reason to divest, the Canadian Association of Physicians for the Environment (CAPE) argued on Wednesday. The association pointed to a study it co-released that day from the Pembina Institute on the health impacts of coal-fired electricity generation in Alberta. Coal power’s contribution to asthma and other respiratory/cardiovascular illnesses in the province costs about $300 million annually because of increased visits to hospitals and emergency rooms, the report found.

CAPE put out a statement Tuesday urging all Canadian healthcare providers and their professional associations, including the Canadian Medical Association, to immediately “freeze” all new investment in oil, gas, coal, and pipeline companies. Within five years, they want these organizations to divest from direct ownership and commingled funds that include fossil-fuel public equities and corporate bonds.

“Similar strategies have been used in the past by medical organizations in the fight to hold the tobacco industry accountable for the health effects of its products,” CAPE said in a statement.

6 thoughts on “Divestment fever spreads to Canada as students, doctors launch campaign against fossil-fuel holdings”

  1. I am a strong believer in the scenario of fossil fuel based equities being in trouble in the not so distant future. The world will eventually agree on a binding global greenhouse gas treaty, maybe later than many of us would like, but it will happen, the evidence and costs will be too great to stay in denial. As soon as the signing of that document looks likely (not the actual signing), the markets will drop fossil fuel investments like a stone, and an effective treaty will force real fossil fuel consumption then also to decrease.

    The only hope the fossil fuel industry had was sequestration, and that is not going well, so there is no backup plan for them to continue to grow, or even maintain current production in an effective GHG managed world. Yes, I have divested.

    Some people may feel we will not take this path, and I’d love to hear counter arguments where we address climate change and this does not happen to the fossil fuel industry.

    steve lapp

  2. I like the overall sentiment of this campaign but there are some complications. In Canada, a number of these legacy fossil fuel companies are making investments in renewable energy (e.g. TransAlta, Suncor, Enbridge are the largest owners of wind farms). Time will tell if these were PR exercises or genuine diversifications into other energy sources. They actually have the technical and financial skills to be good in renewable energy so I hope that they will grow that part of their business.

    Ideally, each of these companies would have a “black” and a “green” class of shares and then the marketplace could bid up the “green” class and bid down the “black” class. In other words, unbundle the assets and let the market guide future investment.

    Maybe McKibben can suggest it.

  3. Pension funds and investment portfolios of any and every reasonably well to do person has stocks in oil and gas because they have traditionally been so profitable. This is a big deal. There is alot of vaporized investment out there at some point when fossil fuels start really losing market share.

    The only logical solution is for the big boys to start investing heavily in the new age of sustainable technology and conquer those emerging markets. There is an endless array of opportunities in new services, gadgets, methods, structures, infrastructure, alloys, nanoparticles, and ultracapicitors to write off the dinosaurs on their balance sheets.

    Sorry about the star, its truly is their loss. Keep kickin some bum Tyler.

  4. Researchers from Calgary have discovered major piece of energy puzzle

    Firewater Fuel cheaply made catalysts improve prospects of fuel cells and electrolyzing. This will help renewables via energy storage methods. E.On out of Germany and Enbridge/Hydrogenics both have power to gas strategies that could benefit.

    Kudos to Curtis Berlinguette and Simon Trudel who published results in Science.

    NREL has set up a facility to test power to gas methods of storing renewables as well.

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