Time to Divest From the Fossil Fuel Industry

By Ilona Hale, MD, David Hale, MSc, Env. Mgmt, Courtney Howard, MD, Warren Bell, MD

As physicians we are trained to respond to emergencies – the more serious the diagnosis, the more quickly we respond. The dangers of global warming were recognized by scientists over twenty years ago and there is no longer any serious scientific debate about the existence or cause of anthropogenic climate change. The recently released report from the United Nations Intergovernmental Panel on Climate Change (IPCC) confirmed the many present and future health effects of global warming and climate instability. Increasing drought, food insecurity, extreme weather events, vector-borne disease and wildfires may soon represent some of the most serious threats to human health. Physicians, as guardians of human health, should be actively engaged in addressing this issue. Yet we, as a society and as a profession, are still failing to act in a meaningful and substantive way. Fortunately there are many tools to help us act, one of the most recent being the idea of fossil fuel divestment, similar to the divestment campaign of the 1980s which helped to topple South African apartheid.

The idea of fossil fuel divestment is based on what is referred to as “Terrifying New Math”: Climate experts and governments from around the world have accepted the scientific consensus that an increase in global temperature must be held below 2 degrees Celsius. To remain below this 2-degree target, scientists estimate that we can produce no more than 565 Gt of carbon dioxide. The “terrifying” part is that current known fuel reserves, if burned, represent 2,795 Gt of carbon dioxide. Doing the math, it is evident that this second number is a lot bigger than the first, which means that, if our planet is to survive, most of our current fuel reserves need to stay in the ground - a radical concept challenging our traditional resource-extraction-based approach to economic growth. Clearly, something needs to change.

Despite pledges from governments around the world to cut greenhouse gas emissions, most nations have consistently failed to meet their targets, Canada being among the worst of the offenders.

Expecting that fossil fuel companies themselves will voluntarily move in this direction, leaving their reserves untouched, is unjustified and naive. Corporations simply do what shareholders demand. And therein lies the key to the new divestment campaigns aimed at fossil fuel companies. Proponents are encouraging concerned investors to make their voices heard by withdrawing investments from coal, oil and gas companies, starting with a list of the 200 companies with the largest reserves, and re-directing their investments to other industries that support a healthy climate future. This pressure will provide the stimulus for fossil fuel companies to gradually transition to producing more sustainable forms of energy; it allows them to become part of the solution, building the healthy future that we all want.

Divestment campaigns have been launched at hundreds of colleges and universities, pension funds and religious institutions in a movement that is rapidly gaining momentum. Significantly, members of the British Medical Association have also recently voted to “ transfer their investments from energy companies whose primary business relies upon fossil fuels to those providing renewable energy sources”, the first health organization to do so.

Some investors might fear that divestment could negatively affect their portfolios. On the contrary, many leading economists are predicting an imminent “carbon bubble” based on artificially inflated values of fossil fuel company stocks. This arises from the inclusion of all the reserves which companies hold, without considering that these reserves can never be burned. This “carbon bubble” will leave companies with trillions in “stranded assets” according to the Carbon Tracker Institute, which has links to the London School of Economics. The concept of the carbon bubble has since been supported by the International Energy Agency and the IPCC. Even now, studies looking at divested portfolios found them to provide similar or better returns than their conventional counterparts.

There might also be concerns that abandoning fossil fuel resources in Canada could lead to economic collapse. In fact, the oil and gas industry accounts for only 5% of the Canadian economy. The latest IPCC report concluded that shifting hundreds of billions of dollars into renewable energy from fossil fuels and cutting energy waste would take only 0.06% off of our usual 1.3-3% annual global economic growth. “Waiting to take action will inevitably increase costs, escalate risk, and foreclose options to address the risk.” It has also been estimated that non-fossil fuel industries create 6-8 times as many jobs per dollar invested as fossil fuel companies.

Divestment for physicians is particularly important since we cannot, in good conscience, be strong advocates for addressing climate change while continuing to profit from fossil fuel companies. Physicians, through MD Management, have already made a commitment to divest from other unhealthy industries such as tobacco. Every Canadian physician can start by raising the issue with their investment adviser and encouraging their own university, hospital and medical society to divest from fossil fuels and reinvest in renewable energy sources.

As physicians dedicated to promoting health, we can no longer sit at the bedside while our patient deteriorates. We have more than enough information to start treatment now. Divestment, one of many tools available, is an important first step.

Ilona Hale is a family physician in Kimberly, BC; David Hale is a professional forester with a masters in environmental management; Courtney Howard is an emergency physician in Yellowknife, NT and a board member of the Canadian Association of Physicians for the Environment; Warren Bell is a family physician in Salmon Arm, BC and a board member of the Canadian Association of Physicians for the Environment.

4 thoughts on “Time to Divest From the Fossil Fuel Industry

  1. Mark Polle

    Thank you for printing this important article. Physicians are often so overwhelmed by the minutiae of clinical practice that we forget to check the big picture. To be truly effective health promoters, though, we need to be not just clinicians but advocates for healthy public policy. Climate change—through drought, famine, flooding, and resource wars—threatens the health of billions of people, the poor and disadvantaged most of all. If we are serious about wanting healthy societies we need to speak up for progressive policies to avert this impending disaster. We should divest from fossil fuel companies to avoid profiting from investments that ultimately harm our patients, but we must go further. We need also to challenge our politicians to stop subsidizing fossil fuel companies that are destroying our global life support systems and instead make them pay the true cost of their carbon pollution.

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  2. Friends of Science (@FriendsOScience)

    This blog is misinformed. The Sept 2013 AR5 report of the IPCC Working Group I (the physical sciences) reported that there had been a 15+ year hiatus in global warming; Dr. Ross McKitrick recently presented “The Pause in Global Warming: Climate Policy Implications” in which he showed, using IPCC data, that there has been a cooling trend since 2002.http://www.friendsofscience.org/index.php?id=750

    Dr. Madhav Khandekar, formerly of Environment Canada, did a detailed assessment globally in “Extreme Weather-Global Warming Link” that showed there is no uptick in extreme events and warming has stopped naturally. http://www.thegwpf.org/content/uploads/2013/11/Khandekar-Extreme-Weather.pdf

    Dr. Judith Curry, atmospheric scientist of Georgia Tech, testified to the US Senate Jan 16, 2014 that carbon dioxide is not the ‘knob’ on climate variability and that the case for human-caused global warming has been weakened. http://www.epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=07472bb4-3eeb-42da-a49d-964165860275

    You can read on pages 114 and 115 of the Technical Summary of the IPCC report that the actual physical scientists have very ‘low confidence’ of any trends to warming or extreme weather.http://www.climatechange2013.org/images/report/WG1AR5_TS_FINAL.pdf

    Divestment from fossil fuels is touted by green activists like Thomas Steyer – but it is reported by the New York Times and Powerline that while he encourages people to divest, private funds like his Farallon Capital are snapping up coal reserves around the world. http://www.powerlineblog.com/archives/2014/07/the-epic-hypocrisy-of-tom-steyer-ny-times-edition.php

    If anything it is unreliable renewables that drive up the costs of power (as people in Ontario know – in the UK and EU power skyrocketed from a par w. the US in 2005 to 37% higher in 2013) and push people into ‘heat-or-eat’ poverty. In the UK some 37,000 people died because of heat or eat poverty – Professor John Hill’s report outlines the terrible costs. http://sticerd.lse.ac.uk/dps/case/cr/CASEreport69.pdf

    As doctors, you would think your main concern would be for patient health. Who wants to be in the midst of open heart surgery when the power grid bumps due to wind cutting in or out… or when hospital operation costs sky rocket x 3 or more due to using commodities driven natural gas instead of old king coal? Solar scientists foresee an imminent cooling – possibly like that of the Little Ice Age – a terrible time for humanity. Canada is a winter country; our greatest benefit to human health has been affordable power and advanced medical care – which is heavily reliant on affordable power. See Dr. Benny Peiser’s presentation on how heat-or-eat poverty affected the UK and EU. http://www.friendsofscience.org/index.php?id=653

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  3. Ian Gartshore

    I have just read the excellent and informative article on your blog –it’s time to divest from the fossil fuel industry.

    Given that fossil fuels kill thousands of Canadians a year for the same reason cigarettes do I am extremely glad to see some physicians pointing out that investing in an industry that kills their patients is not becoming of physicians. Indeed, it is illogical, it flies against the promise do to no harm, but it very well may also be unethical, especially given that there are clean energy sources ready to replace the dirty fuels.

    I would like to thank the authors for alerting their fellow physicians and us all.

    Reply
  4. Raquel Feroe

    I very much appreciate this article. As the first comment notes Drs do need to keep the big picture in mind. Addressing Climate Change and divestment also brings about important co benefits such as improvements in Air Quality.
    (I also enjoy a great oxymorone like “Friends of Science”)

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