UC Announces Divestment from Fossil Fuels

UC Announces Divestment from Fossil Fuels

Years of divestment lobbying by students and faculty ends in a success.

The Earth naturally warms and cools every 100,000 years, but current data projects reveal that the warming happening right now is increasing more quickly than usual. The carbon cycle is one of the natural processes involved in maintaining the slow incremental temperature changes on the Earth. In this process, carbon in the atmosphere prevents too much heat from escaping and thus keeps Earth warm enough to sustain life. Carbon is stored in natural reserves of coal and oil, and is released when burned. The carbon cycle balances itself because of the trees and plants that absorb carbon for respiration. However, human activities such as deforestation and the burning of fossil fuels cause more carbon to be released without anything to remove it from the atmosphere. Nearly 87 percent of carbon emissions come from fossil fuel use, which is primarily used for electricity.

Carbon emissions increase the amount of carbon in the atmosphere, which causes the Earth to warm up. Notably, the warming of the Earth causes ice caps to melt, increasing sea levels and leading to natural disasters. One of the reasons why global warming is being examined is that it could result in potential damage to property, resources, and living species.

A number of government agencies, nonprofit organizations, and private businesses from around the world have taken action by examining how sustainable energy can be used in order to prevent the effects of global warming from prolonging and worsening. Sustainable energy uses natural resources in a way that will meet our energy demands and protect the planet. One of the institutions that participates in the sustainable energy movement is the University of California Board of Regents. The UC system has even been recognized by the United States Environmental Protection Agency for using and promoting green energy and being a role model for other universities and organizations. The UC Regents first got involved when former UC President Janet Napolitano announced the Carbon Neutrality Initiative in 2013, which committed all 10 UC campuses — including their labs and medical buildings — to work toward zero carbon emissions by 2025. Aside from CNI, the UC Regents also joined the global initiative, Mission Innovation, which aims to “double clean-energy research and development.” 

Despite the UC system’s intense involvement in combating additional carbon emissions, there was one detail that contradicted its engagement: investments in fossil fuel companies. The UC Regents manage nearly $120 billion in funds, including $70 billion in its pension fund for faculty retirement and for grants. This money pays for the half a million employees that the UC system employs or has formerly employed, and it needs to be managed carefully in order to allocate enough resources to the UC system’s many branches, including universities, research funds, student grants, construction, and outreach centers around the world. To make sure there is enough money to split, the UC Regents invest their money in private companies and resources. Half a billion dollars are invested in natural resource companies and of that, $12 billion are invested into stocks and bonds in oil and gas companies. 

Since 2012, students across UC campuses have been displeased with the investments and have lobbied for the divestment of fossil fuels. At UC San Diego, the Associated Students Council passed a resolution on support for fossil fuel divestment, saying that “the University of California has affirmed its commitment to ‘responsible stewardship of resources and to demonstrating leadership in sustainable business practices.’” Therefore, to follow up on that commitment, the UC Regents should divest from fossil fuels.

Representatives from the A.S. Council also gave presentations on fossil fuel divestment to members of the UCSD Academic Senate, which is a council for faculty, in the years following its resolution. The members of the Senate voted to support the students, but no Senate resolutions were written. However, one member present during the student presentations was inspired to write a resolution for the UCSD Graduate Student Association.

One of the original drafts of the GSA resolution was written by Teresa Zimmerman-Liu, a graduate student who was the vice president of academic affairs during the 2015-2016 academic year and is now an instructor for the Earl Warren College Writing Program. However,  work was not yet finished. The students still wanted a resolution to be passed in the Senate, and so a town hall was held in 2016 to encourage the Senate to write their own resolutions. 

Students were encouraging the Senate to pass a resolution due to the amount of voting power that the Senate has. All three councils get to vote on issues regarding the university. However, the Senate approves new courses and has more power than the student councils. Therefore, gaining the support of the Senate was a crucial step in the journey towards divestment.

“The energy from all this interest among faculty and students eventually pushed [the UC Regents] to divest from fossil fuels and invest in green energy,” Zimmerman-Liu said. “When we passed that resolution, much of their portfolio was related to fossil fuels, either fossil fuel companies, transport, or refining. GSAs and A.S. on other UC campuses were also doing the same thing.”

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Amidst the student activism, Chief Investment Officer of the UC Regents Jagdeep Singh Bachher put out a statement in the summer of 2017 regarding the UC Regents’ strategy and future plans for the UC system’s investments. In his statement, Bachher wrote that the UC system “acknowledges that the transition to low carbon energy is imperative.” However, according to the statement, the  UC Regents question if divesting from fossil fuels is a completely necessary step in the UC system’s agenda towards clean energy. The statement clarified that Baccher “does not anticipate that the Board of Regents will vote immediately for full divestment,” explaining that “scientific projections for how to hold the Earth’s temperature rise to 2 degrees, or even 1.5 degrees, require a reduction, not a complete elimination, of global fossil fuel use.” 

“It is our intention to shift our holdings to cleaner energy investments over time based on market trends and opportunities rather than to give ourselves an arbitrary deadline that might put our financial stakeholders at risk,” Bachher said in the statement. 

Since 2014, the UC system has not invested in new fossil fuel companies. It did, however, divest $200 million from coal investments in 2015. 

Finally, in 2019, the years of lobbying finally paid off for the students. In the summer of 2019, 77 percent of the  Senate voted for divestments and presented their votes to the UC Regents. The Senate Chair, Robert May, reasoned that “divesting will send a strong and clear statement” that the UC system is fully committed to its carbon-neutral goals. A few months later, in October, Baccher announced that the UC system will be divesting from fossil fuels. 

“The attention on these issues reached administration because of both student and faculty collaboration,” Warren Writing lecturer Niall Twohig said.

“When the administration sees that both faculty and students are concerned about a particular issue, it puts more pressure on admin to resolve or consider their resolutions.” 

The recent divestment plans have been announced in the September 2019 opinion editorial in the Los Angeles Times, in which Bachher and Richard Sherman, the chair of the UC Regents’ Investment Committee, claimed that the UC Regents decided to divest from fossil fuels because “hanging on to fossil fuel assets is a financial risk.” More was not described about the risks that the investments may cause but it was stated that the divestments were not meant to attract public attention or media coverage.

The divestment is a huge success for the environmental campaigns that have been lobbied by students and faculty for the past decade, and represents the power of student and faculty collaboration. Not only did the students find a solution to deal with issues concerning their future, but the divestment also showcased the democracy of the councils and that student voices are being heard. This is the biggest divestment that any university has ever made, and student involvement should not be overlooked as students’ ongoing activism has brought pressure to address this issue. 

Art by Alex Liang. 

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  • U

    UCSD StudentNov 9, 2019 at 5:08 pm

    explaining that “scientific projections for how to hold the Earth’s temperature rise to 2 degrees, or even 1.5 degrees, require a reduction, not a complete elimination, of global fossil fuel use.”

    This is definitely up for debate, as holding the Earth to below 1.5 C requires the Earth to be carbon neutral by 2050. While the regents may disagree, this points to a future where either massive carbon sequestration efforts are occurring, massive carbon offsets are occurring or zero fossil fuel use.

  • K

    Kina ThackrayNov 3, 2019 at 8:35 pm

    This is a huge accomplishment for student activism in the UC! Divestment from fossil fuels in the UC retirement fund is a first step, now each UC endowment fund should also commit to divesting from fossil fuels!