I gave my first one-on-one practice presentation today. When I asked my friend what climate solutions she is working that she thought have a big impact, she said Divestment - getting pension funds, big investment funds, universities, governments etc to divest from fossil fuel investments. We used carbon pricing as a proxy since it is also used to discourage fossil fuel investment and keep fossil fuels in the ground. Is this a good proxy or is there a better way to think about divestment? If it is the best proxy, what are its limitations? Thank you! Laura
Thank you for your suggestion on proxy and thoughts behind it! Laura
This is a good question. When this comes up, I usually just add a modest tax to the different fossil fuels. A modest Carbon price also works as a proxy. Divestment at a low level is mostly a moral action, but as we are seeing, it is continuing to build (up to $11 Trillion in assets are committed to divestment these days). To have a direct impact on fossil fuel companies divestment has to be at such a level that the companies are limited in their access to financing. I'd say the ripple effects of the divestment campaigns are where we are seeing greater and greater impacts. For example, increasingly companies are being asked about their risk exposure to climate change and the markets for some fossil fuels are not as strong as they were a few years ago. En-ROADS wasn't built to follow these financial flows, but it is an interesting arena of action!
This is an excellent question and I also have been wondering how to "model" that scenario. That has also come up in my conversations, as well.
It would be good if the divestment option had its own slider; however, understand that may be hard to model.
I may be answering my own question. Would it be better to go into the fossil fuel sliders and stop building new infrastructure?