The Economic Case For Divesting From Fossil Fuels

Garvin Jabusch, Chief Investment Officer with Green Alpha Advisors, LLC

ABSTRACT: If you own fossil fuels you own global warming. You own the most likely cause of global economic and possibly even civilization-level failure, and moreover, you own a power source that is having an increasingly tough time competing economically. And yet, the fossil fuels industry, big oil, big coal, natural gas, and its allied sectors, including some large financial institutions, will not quietly or willingly retire into the history of ideas whose time has passed. That fossil fuels represent the single greatest systemic risk to our collective economic wellbeing, however obvious to increasing numbers of fiduciariesi, is not a consideration for the industry itself or to many investors. A divestiture campaign to get money out of fossil fuels stocks has emerged, indicating an emerging popular awareness that we must and will transform our energy society into one that can coexist with and even thrive on a finite earth.That a massive global transition away from fossil fuels and towards renewable energies, led by solar, also means that there are and will continue to be competitive investment returns earned from carefully selected investment exposure to renewables.