(Flood Wall Street protesters tote a massive carbon bubble into the center of global capital on September 22, 2014. Image source: Here.)
When you consider all the money and resources going into what many are now calling the carbon bubble, it’s just staggering. Annually, over 650 billion dollars are poured into a 20 trillion dollar monstrosity that, each year, locks in climate changes that are ever more difficult to deal with, ever more dangerous to lives and societies. An investment trend that, if it continues, puts at risk all wealth, the continuance of human civilization and, in the worst case hothouse extinction, much of life on Earth as well. It could well be termed an investment in future devastation. Because that’s what it is.
In total, more than 4.65 trillion dollars worth of the carbon bubble is held in monetary funds invested in fossil fuel industries globally. This massive capitalization provides an ongoing impetus toward climate catastrophe — feeding dangerous new infrastructures and technologies that keep the world locked into a very dangerous fossil fuel consumption regime.
It is, perhaps, the greatest malinvestment in the history of money. For, at one point or another over the years or decades, the continued spending on fossil fuel infrastructure and industry will be revealed for what it really is — an exercise in horrid, self-destructive, futility. And at that point of realization, the investment dollars will inevitably flee and the massive economic structure built around fossil fuels will come crashing down.
The obvious questions to ask in the face of an imminent carbon bubble are — will the world economy be ready for such a jarring shift and, isn’t it better to begin the shift now well before the obvious carbon bubble inevitably bursts?
The Divest/Invest Campaign
As of last year, a variety of groups spear-headed by 350.org began a massive campaign aimed directly at fossil fuel investment dollars. The campaign goal was to lobby investment firms to drop fossil fuel stocks and turn that money toward renewable energy and energy efficiency related firms. And so the divest-invest strategy was born.
The movement took inspiration from historic efforts to monetarily undermine the Apartheid government in South Africa during the 1970s and 1980s. That effort aimed at directly defunding corporations that supported the Apartheid regime and had lasting impacts throughout the struggle for equality there. The new divestment efforts were targeted directly at the investment structures supporting the fossil fuel giants and had the added impact of funneling capital toward efforts directly able to replace these harmful industries.
(Student activist toting Divest Fossil Fuels sign.)
The movement first took root in college campuses and communities around the globe. Students and young people — who stood to see much of the worst effects of climate change — became powerful advocates for shifting university and community investment dollars away from fossil fuels. As the movement grew, faith organizations also took part as a growing number of churches and religious groups around the world actively turned their investment dollars away from activities destructive to a sacred creation.
As of January of 2014, 74 major investment funds associated with these entities had taken part in the divest/invest campaign. By this week, that number had more than doubled to 180.
Included in that number was the prestigious Rockefeller Brothers Fund. An investment group that, ironically, owes its ascendance to fossil fuel dollars generated during the oil and gas boom years of the 20th Century. But the 870 million dollar fund is now moving radically away from fossil energy investment with leading fund trustee Steven Rockefeller citing concerns over a rapidly emerging carbon bubble in the global markets:
We see this as having both a moral and economic dimension, Rockefeller noted in a recent interview with the New York Times.
The Rockefeller Brothers Fund is among the first major Wall Street investment funds to take part in the growing divest/invest movement. But its prestige and reach is bound to put pressure on other charities and firms to follow suit.
(Members of a Massachusetts divestment campaign aimed at removing state pension fund investments in fossil fuels. This group is just one of hundreds now operating globally. Image source: 350.org.)
Overall, funds have now pledged to divest more than 50 billion dollars in capitalized assets from fossil fuel firms and invest that money in alternative energy and fossil fuel replacement efforts. This shift in funding represents slightly more than 1 percent of the total fossil fuel global investment market capitalization. Though small when compared to the total volume of fossil fuel based assets, markets are sensitive to even minor movements in capital flows. And, since the divest/invest effort appears to be snow-balling, a stiff challenge to the monetary dominance of fossil fuels in advance of an inevitable bursting of the carbon bubble may well be in the making.