To avoid raising the planet’s temperature above 2 degrees Celsius in the coming century, the International Energy Agency has estimated that $10.5 trillion of renewable energy investment is required. Green investment is nowhere near that amount; meanwhile, hundreds of billions of dollars continue to flow into fossil fuels.
Ben Walsh, writing in the HuffingtonPost, points out that while financing for fossil fuels bounced back after the 2007-2008 financial crisis, investments in renewables have yet to return to their pre-2007 peak
He also points out that while divestment campaigns are gaining high-profile adherents like the Rockefellers, divestment has a minimal impact on fossil fuel dominance. The 650 individuals and 180 institutions that belong to Global Divest-Invest say that they have a collective $50 billion in assets. Unfortunately, writes Walsh, that $50 billion may represent total assets, but “not the assets they’ve pledged to sell.”
Walsh then estimates that the group’s energy assets are likely somewhere in the four to five billion dollar range, which will not amount to much in renewable investment. As Greg Wendt, Senior Wealth Advisor at Stakeholders Capital, pointed out to Planet Experts, Exxon Mobil, by itself, makes over $110 billion per year. Divestment isn’t going to make a dent in that.
The fact that the Rockefellers, a family that made its name in oil, have joined the campaign, is a “huge message,” says Wendt, “but it’s a message nonetheless. Economically, it’s not much.”
A more significant step would be reducing the subsidies that the fossil fuel industry enjoys. At present, estimates for fossil fuel subsidies range between $10 billion and $52 billion per year. Globally, nations are providing an annual $775 billion in subsidies to fossil fuels every year – at minimum.
On top of that, Exxon’s market value is $400 billion. How can renewables compete with that, even if all $5 billion of Global Divest-Invest wasn’t likely to be parceled out over several years?