In June, New York University's Board of Trustees refused to buckle under student pressure to divest from fossil fuels, saying that "[we] do not support NYU using its endowment as a tool simply for making statements."
If only more universities showed similar sensibility. Higher education's divestment hasn't made an environmental difference — but it will take a sizable financial toll on the colleges and universities that embrace it. Even if divestment did make a difference, though, it would run directly counter to several other liberal priorities, from affordable college to helping low-income and minority Americans.
Since 350.org co-founder Bill McKibben's issued his call to divest in a 2013 issue of Rolling Stone, one college after another has yielded to students' demands. In May, University of Massachusetts became the first major public university to wholly divest, but by that point, at least 31 other American colleges and universities had already fully or partially pulled their investments.
Meanwhile, Harvard, Purdue, Tufts, University of Michigan, Cornell, Yale, Stanford and many of other universities are under pressure to do the same.
The divestment movement won't save the planet from pollution and climate change. Instead of yielding real results, it seeks to stigmatize traditional energy enough that policymakers will regulate against fossil fuels and in favor of renewable energy.
Take it from green activists themselves. "The goal is to shift public opinion," a 350.org spokesman said recently. McKibben himself has said the goal is "revoking the social license" of traditional energy companies, while Naomi Klein has called the divestment movement "the first stage of this delegitimization process."
Or, if you prefer, take it from University of Mary Washington, which voted to divest in April, following three years of protests that culminated in a sit-in outside the president's office.
"Can divesting a single endowment from fossil fuels companies make a difference in terms of our collective ability to respond to climate change?" the university's own assessment said. "The short answer is no. … We acknowledge that such a decision might be largely symbolic."
Like many divesting institutions, the University of Mary Washington bases the benefit portion of its cost-benefit analysis on nebulous assumptions. It touts "symbolic capital," claiming that "young people today strongly value and seek out direct involvement as a social good" and hoping that "student[s] will receive the message that UMW is an institution that does the right thing."
Environmentalists have attempted to make a financial case for fossil-fuel divestment — but their claims are entirely contingent on the federal government regulating traditional energy sources severely enough that they remain at a competitive disadvantage.
That's circular logic: Divestment makes sense because it will result in more environmental regulation, and that same environmental regulation will help divestment make sense.
Nonetheless, the Obama administration's executive-branch green activism has given green activists some cause for hope. Then again, their financial calculations presume that courts won't overturn these regulations as a massive overreach, as one Wyoming judge just did regarding the Bureau of Land Management's power-grab over hydraulic fracturing on federal lands.
Similarly, the studies environmental activists like to cite are notoriously myopic, looking only at the traditional energy industry's recent glut. These reports wholly ignore the key role energy holdings have played in diversifying investment portfolios.
Other studies, some admittedly funded by the energy sector, take a more long-term approach — and tell a totally different story. A report published by an Arizona State University researcher in May found that endowments would lose between $1.4 billion and $7.4 billion over a 20-year period by divesting. Similarly, a report by a former hedge fund manager found that Harvard alone would lose $108 million annually if it divested.
That shortfall will likely be made up, at least in part, by tuition hikes, a fact that the campus divestment activists rarely mention. That's a high price to pay for a gesture that's symbolic at best.
It's true that young people disproportionately worry about climate change and the environment. Even so, they rank the economy as their top political issue, closely followed by college affordability and student debt, according to a recent Rock the Vote/USA Today poll.
The divestment push (presuming it's successful in prompting policy changes) would also hurt minority and low-income Americans, exacerbating income inequality. Already, blacks and Hispanics spend a significantly larger portion of their take-home pay on energy. And the Clean Power Plan alone would result in double-digit rate hikes on families' electricity bills, a burden the poor would be least able to shoulder.
What's true for low-income Americans is true for college students — and for America as a whole. Suddenly, divestment looks like an exorbitant and inadvisable luxury.