Debating Divestment

While students up the river staged sit-ins to demand that Harvard shed its investments in fossil-fuel companies, the MIT community addressed that thorny issue in typical MIT fashion—by analyzing it.

This April, hundreds from MIT and elsewhere gathered in Kresge Auditorium to watch two teams debate whether MIT should divest. The teams each consisted of an MIT faculty member, a professor from another institution, and an executive from an investment firm. All agreed on the seriousness of climate change and the need for strong actions to curb greenhouse-gas emissions, such as the imposition of a carbon tax. But they differed on whether an MIT divestment from fossil-­fuel companies would help.

John Sterman, a professor at the Sloan School, said that MIT divestment is “not only right, it is vital to support the policies that are needed to prevent potentially catastrophic climate change.” Fossil-fuel companies “continue to fund deniers, undermine the science, confuse the public, and delay action—actions antithetical to the values of MIT,” he said. “The integrity of the Institute is at stake.” He added, “We cannot say that we care about climate change while we invest in an industry that threatens our prosperity, our health, and our lives.”

Frank Wolak, a professor of economics at Stanford University, responded that “as long as demand is still there for the fossil fuels, the greenhouse-gas emissions will exist, regardless of who owns the assets.” Rather than divesting, Wolak argued, MIT “can do much more to actually address the global climate challenge.” Noting the widespread agreement that setting a price on carbon is the most effective approach to reducing emissions, he said that designing and implementing such a mechanism is a challenge worthy of MIT.

Naomi Oreskes, a professor of the history of science at Harvard University, said for the pro-divestment team that “symbols matter, because they signal our intent, and they invite other people to join in our intent.” She said that while all six panelists agree on the importance of carbon pricing, divestment can be part of a political strategy to build public pressure that could lead to a carbon tax.

Brad Hager, director of MIT’s Earth Resources Laboratory, arguing against divestment, said that not all fossil fuels and not all companies in that sector are alike. “We need to apply some discrimination, and that’s what’s wrong with this divestment movement,” he said. “It throws everything out rather than making thoughtful choices about what is good and what we should keep, and what we should get rid of.”

Maria Zuber, MIT’s vice president for research, said, “We’re not declaring winners and losers. We are here to learn and to understand both sides of a complex question.” The debate was one of a year-long series of events intended to provide input for a report, expected in June, from the MIT Climate Change Conversation Committee, detailing an unranked list of possible actions and their pros and cons. Zuber and Provost Marty Schmidt, Environmental Solutions Initiative director Susan Solomon, and MITEI director Bob Armstrong will seek reactions to the ideas from the MIT community and present a set of recommendations to President L. Rafael Reif.