Harvard University, the world’s richest school, won't sell its investments in fossil-fuel companies amid pressure from students, President Drew Faust said in a letter released today.
"I do not believe, nor do my colleagues on the Corporation, that university divestment from the fossil fuel industry is warranted or wise," Faust said in the letter, referring to Harvard Corporation, the school’s governing board. "The endowment is a resource, not an instrument to impel social or political change."
Students at more than 300 schools in the U.S. have formed groups in the past year seeking to pressure colleges to divest from Exxon Mobil Corp., BP Plc and about 200 other companies with the largest reserves of oil, gas and coal. While some smaller institutions such as Unity College in Unity, Maine, and Hampshire College in Amherst, Massachusetts, endorsed the campaign, most have declined.
Read full letter:
Dear Members of the Harvard Community,
Climate change represents one of the world’s most consequential challenges. I very much respect the concern and commitment shown by the many members of our community who are working to confront this problem. I, as well as members of our Corporation Committee on Shareholder Responsibility, have benefited from a number of conversations in recent months with students who advocate divestment from fossil fuel companies. While I share their belief in the importance of addressing climate change, I do not believe, nor do my colleagues on the Corporation, that university divestment from the fossil fuel industry is warranted or wise.
Harvard is an academic institution. It exists to serve an academic mission — to carry out the best possible programs of education and research. We hold our endowment funds in trust to advance that mission, which is the University’s distinctive way of serving society. The funds in the endowment have been given to us by generous benefactors over many years to advance academic aims, not to serve other purposes, however worthy. As such, we maintain a strong presumption against divesting investment assets for reasons unrelated to the endowment’s financial strength and its ability to advance our academic goals.
We should, moreover, be very wary of steps intended to instrumentalize our endowment in ways that would appear to position the University as a political actor rather than an academic institution. Conceiving of the endowment not as an economic resource, but as a tool to inject the University into the political process or as a lever to exert economic pressure for social purposes, can entail serious risks to the independence of the academic enterprise. The endowment is a resource, not an instrument to impel social or political change.
We should also be clear-sighted about the risks that divestment could pose to the endowment’s capacity to propel our important research and teaching mission. Significantly constraining investment options risks significantly constraining investment returns. The endowment provides more than one-third of the funds we expend on University activities each year. Its strength and growth are crucial to our institutional ambitions — to the support we can offer students and faculty, to the intellectual opportunities we can provide, to the research we can advance. Despite some assertions to the contrary, logic and experience indicate that barring investments in a major, integral sector of the global economy would — especially for a large endowment reliant on sophisticated investment techniques, pooled funds, and broad diversification — come at a substantial economic cost.
Because I am deeply concerned about climate change, I also feel compelled to ask whether a focus on divestment does not in fact distract us from more effective measures, better aligned with our institutional capacities. Universities own a very small fraction of the market capitalization of fossil fuel companies. If we and others were to sell our shares, those shares would no doubt find other willing buyers. Divestment is likely to have negligible financial impact on the affected companies. And such a strategy would diminish the influence or voice we might have with this industry. Divestment pits concerned citizens and institutions against companies that have enormous capacity and responsibility to promote progress toward a more sustainable future.
I also find a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that, as individuals and as a community, we are extensively relying on those companies’ products and services for so much of what we do every day. Given our pervasive dependence on these companies for the energy to heat and light our buildings, to fuel our transportation, and to run our computers and appliances, it is hard for me to reconcile that reliance with a refusal to countenance any relationship with these companies through our investments.
I believe there are a number of more effective ways for Harvard both to address climate change and to enhance our commitment to sustainable investment.
Our teaching and research on environmental and climate issues is significant and growing, and it is a priority in The Harvard Campaign.
We offer some 250 courses in the broad domain encompassing environmental studies and energy. We support some 225 faculty who work in the area, as well as a graduate consortium that involves more than 100 students and seven Schools.
We have a thriving University Center for the Environment. Outstanding faculty in chemistry, biology, earth and planetary sciences, engineering, and beyond are making profoundly important contributions to envisioning the future of energy and shaping the relevant science and technology. The Kennedy School’s Belfer Center has won international acclaim for its influential work on climate change economics and policy. Harvard scholars in design are on the frontier of thinking about sustainable cities; scholars in law, business, economics, and public policy are leaders in addressing regulatory, commercial, and economic aspects of energy and the environment; scholars in public health do vital research on environmental health and its relation to energy use. Indeed, the foundation of our current national clean air regulations was a study undertaken more than two decades ago by faculty at the Harvard School of Public Health.
We also have a strong institutional commitment to sustainability in how we live and work. Our Office for Sustainability is doing outstanding work. We are making substantial progress in reducing our greenhouse gas emissions. We have become much more conscious of sustainable design principles in all of our physical planning and construction. We have created awards to recognize “heroes” who are helping to make Harvard green. And Harvard has earned an array of honors to recognize various sustainability efforts. I am very proud of all that our students and faculty and staff are doing on this front, and those efforts will continue and grow.
As a long-term investor, we need to strengthen and further develop our approach to sustainable investment. This is no small undertaking, and it will present challenges along the way. Especially given our long-term investment horizon, we are naturally concerned about environmental, social, and governance factors that may affect the performance of our investments now and in the future. Such risks are complex, often global in nature, and addressing them effectively often entails collaborative approaches. Generally, as shareholders, I believe we should favor engagement over withdrawal. In the case of fossil fuel companies, we should think about how we might use our voice not to ostracize such companies but to encourage them to be a positive force both in meeting society’s long-term energy needs while addressing pressing environmental imperatives. And, like other investors, we should consider how to obtain further, better information on how companies not only in the energy industry but across all sectors take account of sustainability risks and opportunities as part of their business strategies and practices.
To help us pursue this path, Harvard Management Company has recently brought on its first-ever vice president for sustainable investing. She will help us think in more nuanced, forward-looking ways about sustainable investment, including the consideration of environmental, social, and governance factors. And, in concert with colleagues, she will play a central role in considering how Harvard can achieve superior investment returns as it fulfills a university’s distinctive responsibilities to society.
Harvard has a strong interest in marshaling its academic resources to help meet society’s most important and vexing challenges, and there is no question that climate change must be prominent among them. We will continue to do so, through the energy and ideas of our faculty, students, and staff, in ways that are true to the purposes of our endowment and that best take advantage of the University’s distinctive capacities as an academic institution.
Western Canada's first crude-by-rail unit train terminal is set to start transporting 50,000 barrels per day of oil sands crude to the U.S. market next month, the CEO of operating company Canexus said.
The terminal in Bruderheim, Alberta, which will be expanded to 100,000 bpd by the second half of next year as a second supply pipeline is connected, initially will load only "dilbit" oil, or heavy bitumen crude from Canada's oil sands region mixed with 30 percent light condensate, Gary Kubera, chief executive of privately owned Canexus, said in an interview.
The facility is the first of a half dozen or so Canadian projects that have emerged over the past year to help carry more of the booming production from the Alberta oil sands by rail as producers seek alternatives to congested export pipelines. Shipping by rail is more costly, but also more flexible.
An Enbridge official says the company expects a decision from the federal government on its proposed Northern Gateway pipeline by mid-2014, meaning the pipeline could be moving oil by 2018.
But senior vice-president Vern Yu says the Calgary-based company expects that decision to be challenged by pipeline opponents.
"We expect that there would be some appeals to that decision and that would take us into early 2015 and at that point we would be able to start construction, which would allow for somewhere around a 2018 in-service date," Yu said.
Yu says the company is working at building support in B.C. for the pipeline and has released a new series of media ads that promise a better pipeline.
"Obviously that is a lightning rod project where we are actively working on building more support in B.C. for the project."
A federal appeals court on Wednesday revived BP's claims that a judge's interpretation of a settlement over its 2010 oil spill in the Gulf of Mexico could force the company to pay billions of dollars for bogus or inflated claims by businesses.
A ruling by a divided three-judge panel of the 5th U.S. Circuit Court of Appeals threw out U.S. District Judge Carl Barbier's rulings on the dispute between BP and attorneys who brokered the multibillion-dollar settlement in 2012. The panel sent the case back to Barbier with an order that he craft a "narrowly-tailored injunction that allows the time necessary for deliberate reconsideration of these significant issues."
BP argued that Barbier and court-appointed claims administrator Patrick Juneau misinterpreted terms of the settlement. Plaintiffs' lawyers countered that BP undervalued the settlement and underestimated how many claimants would qualify for payments.
In the panel's majority opinion, Judge Edith Brown Clement said BP has consistently argued that the settlement's complex formula for compensating businesses was intended to cover "real economic losses, not artificial losses that appear only from the timing of cash flows."
With the federal government shut down for the first time in 17 years, many of the nation's weather forecasters remain at work, but longer-term climate research is taking a hit. According to Commerce Department documents, 6,601 of the 12,001 employees of the National Oceanic and Atmospheric Administration (NOAA) - or 55 percent of the agency's workforce - have been sent home without pay. That leaves 5,400 "excepted" from the shutdown, mainly because they are needed for the protection of life and property.
In particular, the National Weather Service will continue operating its network of 122 local forecast offices to provide weather forecasts, watches, and warnings, and NOAA will also continue to operate its weather and climate computer models, as well as satellite data feeds to ensure that forecasters have uninterrupted access to weather information.
But while the weather service forecast offices are open, employees are not allowed to engage in their typical full range of activities, according to a NWS meteorologist.
"We are restricted to 'mission critical' duties. We aren't allowed to engage the public in outreach activities (such as spotter talks or school talks), and we're supposed to only include forecast-critical information on Facebook and Twitter accounts," the meteroogist told Climate Central, speaking on the condition of anonymity because they were not authorized to talk to the media about the shutdown.
People who canoe on, or wade or swim in, the Kalamazoo River near Marshall in southwestern Michigan are not expected to suffer any long-term harm from chemicals left in the water when an oil pipeline burst in 2010, according to a state report.
Oil-related and non-oil related chemicals were measured in the surface water following the Enbridge Inc. pipeline rupture that sent 800,000 gallons of oil into the river and a tributary creek.
Only a very few of these chemicals were detected above health-protective screening levels in surface water samples, said the public health assessment released Monday by the Michigan Department of Community Health for portions of the river in Calhoun and Kalamazoo counties.
"People are not expected to be exposed to levels that would cause long-term health concerns," the report said. "However, if people have contact with these chemicals or the oil sheen and globules in the river, they may develop temporary health effects, such as skin irritation."
B.C. Premier Christy Clark says her province is moving closer to an agreement with Alberta that would lay a path for oil sands bitumen to reach B.C. ports.
A series of high-level meetings are under way to discuss how the two provinces can open up the path to B.C.'s coasts, and then Asian markets. An agreement is not imminent, but officials for both the provinces are working on a framework to address B.C.'s five conditions.
"I get more confident about that as the weeks pass," Ms. Clark said in an interview. "We are engaged at the highest level of the bureaucracy, the deputies are meeting about the five conditions and talking about how we can meet them together."
The Premier's comments mark a significant change in tone from just a year ago, when Ms. Clark and Alberta Premier Alison Redford emerged from a Calgary meeting and told reporters their discussions were "frosty."
Energy Secretary Ernest Moniz said the new United Nations climate report, which finds with 95 percent certainty that humans are the main driver of global warming, bolsters the case for President Obama's climate plan.
"The report is a watershed report," Moniz said of the UN science panel's summary report released Friday, noting it "highlights the importance of moving now on this issue."
"Clearly the statement about the extreme confidence of the scientists in terms of not only warming, but of the human role in warming, I think is very clear, and it also underpins the importance of the president’s climate action plan," he said in a C-SPAN interview airing this weekend.
In what could become a marquee environmental case of the Supreme Court's next term, the justices on Monday are expected to consider reviewing a lower court ruling that upheld U.S. EPA's regulations to reduce heat-trapping gases.
Nine petitions are asking the court to reverse aspects of an appellate court's June 2012 ruling that backed EPA's first rules following the Supreme Court's landmark Massachusetts v. EPA decision, which instructed the agency to regulate greenhouse gases as harmful pollutants under the Clean Air Act.
Some prominent environmental lawyers believe the court will grant certiorari to -- or agree to review -- some part of the petitions. The decision could come as early as Tuesday, less than two weeks after the Obama administration proposed regulations to cut greenhouse gas emissions at new power plants.
In its latest landmark assessment of the future of the planet under global warming, the Intergovernmental Panel on Climate Change of the United Nations concluded that it is "extremely likely that human influence has been the dominant cause of the observed warming since the mid-20th century."
The panel, which released its first batch of findings on Friday, said the evidence for its conclusion has grown stronger due to "better observations, an improved understanding of the climate system response and improved climate models."
"Warming in the climate system is unequivocal and since 1950 many changes have been observed throughout the climate system that are unprecedented over decades to millennia. Each of the last three decades has been successively warmer at the Earth's surface than any preceding decade since 1850," according to the panel's 20-page Summary for Policymakers of the IPCC Working Group I assessment report. The document was approved early this morning in Stockholm, Sweden by government officials from more than 120 countries who spent days wrangling with scientists over the final text.
For the first time, the IPCC specifies that the world needs to stick to a "carbon budget" and specifies the levels of future carbon emissions that are allowable in order to have a reasonable chance of staying within 2 degrees Celsius of warming in this century, the safe climate target. In short, to have a two-in-three probability of not crossing the danger mark, the world is allowed to burn, at most, 1,000 gigatons of carbon in total since the Industrial Revolution, and countries have already used up more than half that budget.
"Continued emissions of greenhouse gases will cause further warming and changes in all components of the climate system," said Thomas Stocker, co-chair of Working Group I. "Limiting climate change will require substantial and sustained reductions of greenhouse gas emissions."
The Working Group I assessment, the IPCC's fifth since 1990, is about 2,500 pages long and draws on millions of observations and over 2 million gigabytes of numerical data from climate models, according to the IPCC. The review cites some 9,200 scientific publications, most of which were published since the last IPCC assessment in 2007.
Working Group I Contribution to the IPCC Fifth Assessment Report
Climate Change 2013: The Physical Science Basis
Summary for Policymakers