Divest from Fossil Fuels

The trustees’ position on divestment (“Reed Won’t Divest,” September 2014) is not quite bullshit in the way Harry Frankfurt defined that term, but it’s awfully close. Note the claim that the board cannot divest from fossil fuels because, to quote Reed’s account, its “primary investment objective is to safeguard the value of the endowment so that it can support the mission of the college.” This is neoliberal claptrap designed to make us feel good about doing something unconscionable in pursuit of a higher ROI. (The same plea served to justify continued investment in apartheid-era South Africa in the 1980s.) It also is simply false: when implemented in so narrow and self-serving a way, the trustees’ objective still arguably violates the mission of the college, since Reed’s investments currently contribute to environmental depredation and, in so doing, militate against the welfare not only of potential donors (i.e., future graduating classes) but also of the planet as a whole. 

I see little evidence of Reed’s much-vaunted difference at a time when it actually matters. Rather, I see a kind of vague hope for complacency—a hope that is perhaps is most evident in statements by President Kroger concerning the commencement speech by Igor Vamos ’90 (“Grads Unleashed, Yes-Man Pulls Prank”). The speech did technically constitute a prank, but President Kroger’s remarks minimize the importance of Vamos’ actions and the cause in which he took them. To speak, as President Kroger did, of “a great guerrilla artist” is to construct a convenient pigeonhole, one that provides a convenient narrative by means of which readers may consider the matter closed: Igor misbehaves, rich people deny his claims, and then we all get back to business.

People should, as President Kroger notes, engage in “robust and far-ranging debate.” But the time for such debate regarding fossil-fuel investment has largely passed, particularly given how robust the science is concerning climate change. There’s nothing like genuine action, and in this case calling for debate is nothing like genuine action. Rather, it’s the sort of thing that has killed all kinds of environmentally and ethically sound ideas.

Better, I think, to keep people from getting back to business. It’s time to withhold donations to the Annual Fund, and to be clear why we do so. Reed’s endowment is large enough for the institution to behave in an ethically sound manner and still remain in rude health. As Vamos said in his speech, “Do what you must.” 

—Bret Rothstein ’89
Bloomington, Indiana


In the September issue of Reed magazine,  Roger Perlmutter ’73, chairman of the board of trustees, announced that Reed would not divest its $500 million endowment from fossil fuels as requested by the student group Fossil Free Reed. It appears that the main reasons for this decision are 1) that morality should not intrude on financial decisions, and 2) that divestment could have a negative impact on the earnings of the endowment. I disagree that moral considerations should be excluded from financial decisions, but my argument here is that the trustees appear to have overlooked two major risks involved in refusing to divest from fossil fuels.

First, the value of fossil fuel stocks is based in large part on their holdings of known fossil fuel reserves. Current expenditures by oil companies are heavily weighted to acquiring even more reserves. Yet the best scientific consensus is that 70% to 80% of currently proven reserves must remain untapped if the planet is to avoid catastrophic runaway warming. The risk is that, at some point, the obvious impacts of global warming will trigger action to limit fossil fuel use. Deduct the value of the unusable reserves (stranded assets) and the stocks will be seen to be grossly overvalued. The cynical response would be that we should wait and enjoy the profits now before dumping the stocks, but since many stockowners will have that same strategy, a run might happen faster than the stocks could be profitably dumped.

Second, this risk is unique to Reed and other institutions of higher education. Alumni of the generation that occupied Eliot Hall to demand a divestment from South Africa are reaching an age when they are making legacy decisions. A decision to leave a portion of their estate to Reed would be equivalent to leaving a legacy of support to the fossil fuels industry. Given the recent decision not to divest, it is a certainty that some will decide to make other choices for their legacy donations, choosing instead to stand with Fossil Free Reed and the future generations that must live with the results of our decisions. The amount of this risk is impossible to determine, but it could be very large.

The board of trustees should reevaluate their decision not to divest in view of these risks. I believe the wise decision would be to proceed with an orderly divestment. 

—Roger Gadway ’67
White Salmon, Washington


Until Reed implements a plan to divest from fossil fuels, I will not be making any more gifts to the college. The need to limit climate change and its disastrous effects is a “widely held . . . moral position.” In fact, it is “almost universally held” by those who are not in outright denial of the evidence. Is Reed College still a progressive institution? My gifts to date have been small, but I promise that when Reed has begun divesting with a reasonable time table, I will increase them by at least five times.

—John Gusdorf ’67

Taos, New Mexico

Editor's Note: I sense little disagreement among Reedies about whether burning coal, oil, and gas is making the planet hotter. There is, however, genuine disagreement about whether divestment is an effective way to fight global warming. It seems to me that our esteemed correspondents do not squarely face one of the trustees’ central concerns—whether divestment might erode academic freedom at Reed. The bitter lesson of the Stanley Moore affair is that academic freedom is threatened when Reed takes an institutional stance on a political issue. Is fossil-fuel divestment such an issue? Will divesting from fossil fuels lead to pressure for divestment based on other issues? Does the decision not to divest constitute a political stance? Does any of this pose a genuine threat to academic freedom? Arguments on these points will be more persuasive to the trustees, I suspect, than calls to boycott the Annual Fund.