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Divestment Blues or an Ocean of Opportunity?


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In recent months, somewhat lost in the breathless excitement around our federal election and climate change negotiations in Paris, there was a brief moment where the concept of fossil fuels divestment was covered in the media. US $2.6 Trillion, it was reported, has recently been divested, publicly advocated for by no less than Leonardo DiCaprio and other celebrities who are obviously well known for their investment acumen.

Was this a fluff piece, only worthy of the 15 minutes of news cycle coverage it received, then to be immediately forgotten?  Or are there real implications for the future health of the BC economy?  Is it possible for BC to turn this phenomenon into an opportunity?

What is divestment, anyway? 

At CRED, we understand divestment to mean the opposite of investment – institutions or individuals choosing to sell off their positions related to economic activities they believe to be unethical, morally ambiguous or harmful. This has traditionally related to shares in industries involved in the production of arms, tobacco or alcohol, or investment in parts of the world with dubious human rights records. Traditionally, those leading the divestment charge tend to be pension funds, universities, governments, celebrities and religious groups.

Recently, the focus has shifted to fossil fuels. A growing movement to divest from organizations that support the extraction and transport of non-renewable sources of energy is gathering steam, so to speak. Those who advocate this divestment link their message to the impacts of fossil fuels on climate change, and are clear that their aim is to weaken the political power of the entire fossil fuel industry.

Not surprisingly, there are skeptics.

Bill Gates has suggested that fossil fuel divestment is a false solution, and has pointed out that climate campaigners rarely compare the costs of renewable energy such as solar power, on an apples-to-apples basis with fossil fuels. At the same time, Gates is putting over $2 billion of his own capital into renewable technology projects over the next five years – easily eclipsing his foundation’s $1.4 billion total investment in fossil fuels.

If you’re not yet confused, perhaps you should be! Major industrial transitions, such as the one underway towards a world supplied by renewable energy, are complex.

What does this mean for British Columbia? 

Should we be clutching our pearls as we contemplate the risks to our traditional fossil fuel-dependent industries such as natural gas extraction with its promised LNG ‘boom’? Or should we consider a major re-positioning of our province to one that actively welcomes inward investment in clean energy as we transition out of the fossil fuel sector? Is there a balance to be struck?

Recently, the Board of Change hosted US investment guru John Fullerton, who spoke in Vancouver about the concept of Regenerative Capitalism. Fullerton’s theory is that our production and consumption patterns ultimately lead to a degradation of the planet, and that financial markets must come around to investing in technologies, products and activities that go beyond ‘green’ or even ‘sustainable’ to recuperative… and ultimately regenerative.  The jury is still out as to whether captains of industry are prepared to make this leap, but we are seeing it happening in small and large ways in BC right now.

The question for us as consumers and industry: is fossil fuels divestment a risk to BC jobs or an opportunity to put our province forward as the Canadian hub for clean energy? 

CRED is actively working with partners on a research study on the opportunities and challenges to alternative and renewable energy development in BC. As part of our ongoing efforts to encourage fact-based dialogue about responsible economic development, we encourage policymakers to reflect upon the increasing risks of large capital investments in fossil fuel extraction, transport and export through our province.

CRED and our members support forward-looking policies that will stimulate investment in activities which not only generate employment and tax revenue, but which also attract the best and the brightest to our province and will establish BC as a hub for alternative energy. Our province has increasingly become known for high tech innovation, finance, tourism and advanced education. With decisive action now, BC can foster advanced industries in the fields of environmental technology and alternative energy.

CRED believes in a bright, sustainable future for BC. Check out our research on our website: www.credbc.ca

cc image by By Rafael Matsunaga (Flickr)