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CapGlobalCarbon, Keep It In The Ground and the divestment campaign

Note: this article assumes that you are already up-to-speed on what CapGlobalCarbon is. See here to get a quick overview, or here for a short video explainer of Cap and Share, the main component of CGC.

In recent days there has been a surge of activity from climate campaigners around the world who are involved in the Keep it in the Ground campaign. They’ve targeted some of the dirtiest power plants and, with some success, the most prominent fossil fuel investors in Germany, Wales, Turkey, New Zealand, the USA, the Philippines and South Africa, among other countries. 

KIITG has been successful in raising awareness of the need for a rapid transition to a net zero carbon world, stigmatising the fossil fuel companies and encouraging divestment from them. However divestment only changes company ownership, it does not provide a direct method for keeping fossil fuels in the ground (see below).  CapGlobalCarbon could complement the KIITG campaign and nonviolent direct action in general by providing an effective and direct mechanism to scale down fossil fuel use.

Both KIITG and CGC work from the premise that at least 80% of fossil fuel needs to stay in the ground.Indeed, if the Paris agreement is to be honoured, more than 80% will need to stay put. CGC simply provides a predictable framework for this phase-out. 

One reason that CGC is necessary is that as things stand, even if KIITG manages to close down a dirty power plant in one place, there’s nothing to stop an equally dirty one from being constructed elsewhere. (This problem is also discussed in article on the Citylab blog. However, the author’s suggested remedy – a carbon price – would not be sufficient to ensure that emissions will actually be eliminated. My colleague Erik-Jan Van Oosten comments that “the problem with a carbon price is that it indirectly, and thus unreliably, tries to control the amount of fossil carbon entering the economy. In short, the problem with a price is that it can be paid, regardless of its consequences.”)

Another reason relates to fairness. We need to ensure that the remaining 20% of fossil fuels are used in a way that benefits everyone, not just a small elite. This is taken into account by CGC, which concerns itself with how best to share out the revenue from the fuel’s production. It fits in very well with Keep it in the Ground’s recognition that many people in the Global South are already facing major losses from climate change, and with its concern for justice.

CapGlobalCarbon would also encourage increased investment in renewable energy and would help to generate funds for those investments. Without the safety net that CGC would provide, there’s a risk that the shutting down of fossil fuel plants would trigger an economic depression, causing widespread suffering, since the relationship between GDP and fossil fuel use continues to be very tight.

So CGC would act as a vital support to Keep it in the Ground, ensuring that its campaigns don’t fall victim to the undermining power of corporate lobbyists and that its action has long-term effects.

CapGlobalCarbon and the divestment movement

While we certainly agree with the values of the divestment movement, we believe it can only have a limited impact on fossil fuel use by itself. As my colleague David Knight puts it, “divestment must be seen as part of a package of changes needed to tackle the negative impacts of fossil fuel production and use, not as a substitute for concerted and rigorous action at international and national governmental levels to keep fossil fuels in the ground.” 

There are two main reasons for this. One is that around 70% of fossil fuel is actually owned by states . There are no shares to divest from in those cases. So even if the divestment movement managed to close that 30% of fossil fuel plants that are privately owned, a great deal of fossil fuel production would continue to take place.

Some might argue that the closing down of the 30% would give renewables enough of a boost to make further investment by states in fossil fuels redundant, but this can’t be counted on. It would only take one or two ‘rogue states’ who ignored the market signal and continued blithely producing and consuming fossil fuels to throw everything out of whack. 

The other limitation is that shares in fossil fuel companies are really just symbols of how investors think the company is doing. After an initial flotation of shares, there’s no direct connection between the shares and the company at all. In other words, even if all the private fossil fuel companies saw their share values crash, they could remain operational and even rake in profits. 

Divestment is helpful for sending a signal to markets that things need to change and building popular pressure for substantive action by governments on climate. But more is needed. CGC would strongly amplify the signal sent by the divestment movement, ensuring that governments and private investors get the message loudly and clearly that fossil fuel production will definitely end by 2050 at the latest.

[Minor edit at 12:38, May 20: added attribution for the quote from Erik.]

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