BREZNICK | 8 Questions Never Asked of Cornell’s Fossil Fuel Divestment Lobby

All five of Cornell’s shared governance bodies—undergraduate, graduate and professional, employee, faculty, and university assembly—have adopted resolutions calling on the University to divest its endowment from fossil fuels. In a renewed push to achieve this aim, professor David Shalloway, molecular biology and genetics, will represent all five representative bodies in a presentation to Cornell’s Board of Trustees this Friday urging them to carry through with this measure.

Campus environmental groups also have an online petition going around which outlines their arguments.

In the back-and-forth between the financially literate and the fossil fuel divestment crowd, a lot of focus goes toward the financial repercussions of divestment. Proponents of divestment have grown a little more sophisticated—moving beyond simply describing theorized man-made global warming catastrophe scenarios—and now like to point out how most energy-sector equities have done poorly in the past year or so. In the petition, they also cite unnamed divested funds that, according to them, performed better than Cornell’s endowment, which posted a paltry 3.4% return last year and has averaged a decent 7.2% over the past decade. Even if these two points are true, they certainly do not make the case that fossil fuel divestment is a good decision. The first point looks at returns over the short-term, which is an inappropriate time horizon of scrutiny for endowment investing, and the second is almost baseless, since without knowing the make-up and percent allocations of the portfolios, it’s impossible to compare their performances.

But here are some questions the fossil fuel divestment crowd should have to answer before their resolutions are adopted:

1) Why don’t you yourselves divest personally from fossil fuels?
It’s hypocritical to call for the University to divest its investments while you happily consume the various products of fossil fuels by driving cars, flying on airplanes, enjoying heated and air-conditioned rooms, using plastic, wearing clothes, using electricity/electronic devises, etc. Show true leadership and heed your own call which you wish to condemn everyone else to.

2) Do you really morally equate investing in energy companies with the institutionalized racism of apartheid-era South Africa?
That’s just desperation. It makes a mockery of the efforts to overturn the apartheid regime.

3) How do you justify your elitism?
Cheap fossil fuels have lifted millions out of poverty. Why should we prevent others from realizing the tremendous benefits of cheap fuel only after we have?

4) If the endowment is divested, is it permissible to then short fossil fuel equities (that is, to enter into financial arrangements whereby the endowment reaps financial gains if fossil fuel equities decrease in value)?
If so, isn’t the university still profiting from the existence of fossil fuel companies?

5) Why stop at the producers of fossil fuels, such as oil and gas companies, and not divest from the biggest consumers of fossil fuels, such as airlines, automakers, shippers, manufacturers, and utilities?
If you’re going to change the world, you might as well go all the way, right?

6) Why stop at fossil fuel companies and not divest from “vice” companies, such as tobacco sellers, alcohol brewers and sellers, makers of sugary and fatty foods and beverages like Coca-Cola and PepsiCo, and casinos, which many argue are making the world a worse place too?
There is no end to the inanity when emotions drive investment decisions.

7) Do you profess to know more about investing and portfolio management than Cornell’s Chief Investment Officer, Cornell’s investment office staff, and financial professionals on the Board of Trustees?
No, but you did watch An Inconvenient Truth and have a “Stop Fracking” sticker on your Macbook.

8) As a student are you willing to forfeit your financial aid or as a Cornell employee are you willing to take a pay cut to pay for the increased risk and possible lower returns from a a divested endowment?
Skin in the game.