Divestment divorce from reality

Last week, Ideas@theCentre argued that Newcastle Council has entered an alternative reality by withdrawing deposits from banks that fund coal and (potentially) companies involved with alcohol.

Given the Newcastle region’s dependence on coal industry and wineries, it is hard to imagine a more bizarre divestment decision. But this week, we have another organisation entering the Twilight Zone: Sydney University is reportedly cutting its investments in mining companies while increasing investment in alcohol, soft drinks and tobacco. Sydney University is effectively saying it is OK for me to unwillingly receive second hand smoke, but it is wrong to replace unhealthy wood fires with electricity from coal. Air pollution from indoor fires cause 4.3 million deaths around the world per year and the divestment movement opposes replacing these fires by coal-fired electricity. Yet again, a first world organisation (with reportedly $1.4 billion under investment) is dictating to developing countries that they shouldn’t use coal, when coal could save more lives than would ever be lost due to global warming. The University is being paternalistic towards the third world, while at the same time academics at the University criticise Western imperialism.

In addition, as Peter Kurti has previously pointed out in relation to the Anglican Church’s coal divestment strategy, coal’s cheap energy has been instrumental in raising the living standards of hundreds of millions in developing countries around the globe.

The University’s divorce from reality is compounded by the increased investment in tobacco, and it is hard to see how they could possibly justify that as better than investment in coal.

Michael Potter is a Research Fellow at the Centre for Independent Studies