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Dartmouth Weighs The Pros And Cons Of Divesting From Fossil Fuel Stocks

Rebecca Sananes
Associate Professor Mark Borsuk presents findings on Dartmouth's different choices in divesting from fossil fuel stocks.

The decision for institutions to divest from fossil fuels is more complicated than just a list of pros and cons, according to a new report commissioned by Dartmouth College.

After a nearly 400-person rally on the Dartmouth campus in May calling for the school to end direct investments in coal, oil and gas companies, Dartmouth is weighing the decision whether to purge its endowment funds of fossil fuel stocks.

Mark Borsuk, an associate professor of engineering at Dartmouth College and a decisions analyst, wrotethe report, which weighs the different choices involved in divesting from fossil fuels.

Borsuk suggests thinking about the decision in terms of buying car. “One reasonable way to make a decision would be to identify what are your objectives in buying a car. What are the attributes you would use to evaluate whether or not you’re meeting those objectives?” he said in his office at the Thayer School of Engineering at Dartmouth.  

So, let's say you really want a car with good gas mileage; that would be your objective. How fuel-efficient a car is would be really important to your decision; that is the attribute. 

Or maybe your favorite color is red and you just have to have a red car no matter how much it costs. There is only one way to meet the objective of having a red car and that's to buy a red car.

“Then, when we go to buy a car, what we might do is look at a variety of cars and evaluate how well each of those meet each of those objectives as measured by the attributes,” he said.

What does this have to do with whether or not to divest a $4.6 billion endowment from fossil fuel companies?

Borsuk says the decision making process is similar.

“We make these kind of decisions all the time actually, informally, and there's nothing wrong with that per se," he says. "But if you want to make a decision that's transparent and documentable, something you can give a rationale for, then it's helpful to lay this out in a very systematic way. So that's what we tried to do here.”

The authors of the report were not asked for a recommendation on divestment, but to look at the options involved. But just as in buying a car, Borsuk laid out what Dartmouth's objectives with the divestment decision were as defined by the community and Dartmouth's own mission statement.

“We incorporate things like, I think there's an important component of the symbolic aspects to it, the ethical aspects to it, and even the educational opportunities to it. They're broader than just the financial objective,” he said.

"We incorporate things like I think there's an important component of the symbolic aspects to it, the ethical aspects to it, and even the educational opportunities to it. They're broader than just the financial objective." - Mark Borsuk, Dartmouth College associate professor of engineering

With that in mind, Borsuk came up with a list of options. 

“It's not as simple as whether to divest or not to divest,” he said. “What you divest from, how broadly you define that is important. And then what you do with that money you've divested is important: What do you reinvest it in?”

Borsuk and the students working on the report came up with four options:

  • Do nothing and keep investing in fossil fuels
  • Divest only from direct holdings of the 15 largest and most polluting U.S. coal companies
  • Divest from direct holdings in the largest 200 public coal, oil and gas reserve owners  - this is the option student activists on campus have been fighting for
  • Completely divest from all fossil fuel companies and reinvest funds into green energy

“Then the exercise becomes how well do each of these options fulfill the objectives,” he said.

Credit Rebecca Sananes / VPR
Projections of different possible outcomes of divestment choices presented at Dartmouth College.

So let's say because Dartmouth needs a healthy endowment to keep funding its research institutions, its biggest objective would be financial stability.

Todd Kendall, a researcher with Compass Lexecon, saysbased on his research, divesting from fossil fuels is about as practical as buying a vintage Mustang to drive your kids to soccer practice. 

“Of all the economic literature that's looked into this question, basically all come to the conclusion that these divestment efforts don't have any actual benefit that anyone can really articulate, it doesn't change what the companies do,” he said in a phone interview.

Kendall continued: “It's basically a bumper sticker decision. It might feel good to slap your opinion on the back of your car, but it doesn't change anyone's opinion or move the debate forward, and in this case it's a really costly bumper sticker."

But on the other hand, Dartmouth has acknowledged that climate change is a real threat.

So Jenny Merienu, the U.S. divestment campaign manager at,thinks that bumper sticker is valuable even if it's just a symbol.

“If we have a chance of surviving on a livable planet, we're going to have to shift from fossil fuels sooner rather than later," she said. "So it's a fight for life, and I think that's why we've seen students showing up in such large numbers and passion for the issue."

Now the decision is up to Dartmouth President Philip Hanlon and the board of trustees. They will review the report and decide if the school's objectives are best met by keeping its endowment in fossil fuel stocks or driving down a different road toward divestment.  

Rebecca Sananes was VPR's Upper Valley Reporter. Before joining the VPR Newsroom, she was the Graduate Fellow at WBUR and a researcher on a Frontline documentary.
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