Economics and Climate Justice Activism: Assessing the Fossil Fuel Divestment Movement

Tyler Hansen and PERI Co-Director Robert Pollin analyze fossil fuel divestment campaigns as a strategy for advancing an effective global climate stabilization project.  They examine data on global divestment patterns and evaluate econometrically the impact of divestment events on the stock market prices of fossil fuel companies.  They conclude that divestment movements have not been especially effective as a means of significantly reducing CO2 emissions.  The paper suggests that most efforts now devoted to divestment campaigns would be better spent on more direct efforts to drive down fossil fuel consumption and CO2 emissions.

>> Watch author interview on The Real News Network
>> Read Truthout interview with Robert Pollin

Abstract

We present an economic analysis of fossil fuel divestment as a strategy for advancing an effective global climate stabilization project. The basic question we ask is: how effective are campaigns to force various entities to sell their fossil fuel stock holdings likely to be in driving down CO2 emissions? We conclude that divestment campaigns, considered on their own, have not been especially effective as a means of significantly reducing CO2 emissions, and they are not likely to become more effective over time. We reach this conclusion both through an analysis of the available descriptive data on global divestment patterns as well as an econometric modeling exercise that evaluates the impact of divestment events on the stock market prices of fossil fuel companies. We reach this conclusion while also recognizing that fossil fuel divestment campaigns have several important virtues. Nevertheless, we conclude that most efforts now devoted to divestment campaigns would be better spent on more direct efforts to drive down fossil fuel consumption and CO2 emissions.

This is an official web page
of the University of Massachusetts.

Political Economy Research Institute

Gordon Hall, 418 N. Pleasant St., Suite A

Amherst, MA 01002
Tel: 413-545-6355 Fax: 413-577-0261
Contact: