UBC’s financial analysis of divestment

2021-03-25

in Canada, Economics, PhD thesis, Politics, The environment

During the U of T campaign, a validating source like this memo from the University of British Columbia’s Vice-President Finance and Operations would have been amazing for responding to the argument that divestment is financially irresponsible:

Results of Mantle’s analysis (full report attached as Appendix A) indicate that the link between climate change and the financial viability of investment assets is clear. Carbon intensive companies will be exposed to climate related financial risk as the world commits to reduce carbon emissions through regulatory, legal, market or technology shifts away from fossil fuels. Rapidly evolving trends – such as greater corporate disclosure of climate risk, commitment to a “Paris Aligned” future, the acceptance of a “carbon budget” – are greatly increasing the risk in holding shares of companies whose value is derived from the continued growth and expansion of global fossil fuel use.

Seeing the arguments about the carbon bubble from Bill McKibben’s movement-instigating article and our own divestment brief affirmed by university executives and their consultants demonstrates the degree to which the argument against continued investment in fossil fuels is sound, as well as how it has diffused beyond activists into the thinking of decision makers.

Tonight’s thesis reading will be more than unusually encouraging, between this and today’s Supreme Court of Canada ruling on the carbon tax.

{ 1 comment… read it below or add one }

. March 27, 2021 at 12:45 pm

It’s also notable two things these prairie premiers didn’t say. 1) Neither got into the sort of inflammatory western alienation rhetoric that has long animated this debate (aside from Kenney’s odd remark, baited by a Toronto Sun columnist, about Supreme Court justices as Quebec-loving “Ottawa elites”). 2) Neither cast their eyes or comments to the prospect of victory by Conservative Leader Erin O’Toole, who has pledged to scrap Trudeau’s carbon tax in favour of some mystery alternative climate strategy. This not only suggests some lack of confidence in that electoral outcome, and a level of disengagement between conservative leaders and their federal counterpart but it also signals their quiet understanding that a comprehensive climate plan that doesn’t apply pressure to consumer behaviour and only hits major industrial emitters, which are disproportionately large parts of the carbon megatonnage in Alberta and Saskatchewan, could be a truer version of that “job-killing” measure they rattle their sabres at. It’s also part of the reason that some oil patch players don’t much mind a carbon tax on consumers, because that lessens the burden on energy companies for doing all the heavy lifting on emissions reductions.

https://www.macleans.ca/politics/ottawa/the-reality-of-carbon-prices-sinks-in/

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