Editors’ Note: This is a response to David G. Victor’s recent essay “Carbon on Campus.”

David Victor evaluates two issues facing universities today: fossil fuel divestment and fossil fuel industry funding of academic research. His assessments of movements for the former and against the latter are grim: divestment is “a symbolic sideshow” because it will not help to “starve big carbon of capital,” while critics of industry patronage fail to appreciate the costs of giving up funding. I will respond to these views in turn.

First, Victor fundamentally misunderstands the purpose of divestment. It is but one tool of climate change activism, and its goal is not primarily to starve big carbon of capital, at least not directly. The immediate purpose of divestment is to force hard, accountable moral analyses to take place and to put an end to equivocation and dissembling on climate change by demanding action involving real money. Doing so helps to shift institutional and social norms and to democratize the climate debate.

Victor misses the point of divestment and grossly underestimates the power of symbolism.

Indeed, the movement has made progress in these directions. Over the past few years, the idea that there are ethical grounds for refusing to finance fossil fuel projects—coal projects, in particular—has moved much further toward the mainstream, with some very large investment funds adopting divestment policies (including pension funds and insurance companies). Further, fossil-fuel-free investment products have been developed, and public arguments have considered how to change the behavior of fossil fuel companies through shareholder engagement or other means. Large banks have named the stark quantitative contradiction between climate goals and the massive reserves of fossil fuel companies a real problem. Fossil fuel companies are coming under greater social scrutiny, as illustrated by the focus on ExxonMobil for its alleged misrepresentation of climate change to the public. Some universities, such the University of Toronto, are beginning to articulate criteria for fossil fuel companies to follow in the context of divestment. And because the issue of divestment has arisen in thousands of institutions, more people of all backgrounds are engaging with the reality of climate change. Moreover, discussions about divestment have begun to reveal the extent and influence of fossil fuel industry patronage within academia; indeed, bringing the issue of industry money to the fore may ultimately be seen as one of the most important achievements of the divestment movement.

Victor not only misses the point of divestment but also grossly underestimates the power of symbolism. When institutions divest, they are communicating to the world that they don’t see a bright financial future for the fossil fuel industry or that they find the actions of the industry to be ethically problematic. These beliefs are communicated to other institutions and their constituents, who then evaluate these issues themselves. This is how attention, analysis, and belief is scaled across society—through a signaling mechanism that compels others to evaluate decisions, then adopt or reject them. The end result is a shift in social norms. The usefulness of divestment as a signaling mechanism is one reason it has grown so quickly—and attracted so much attention—in the past few years.

Victor also casts doubt on the larger goal of dismantling the coal industry—even though it is not the immediate aim of divestment—but his claims here are specious as well. He alleges that those trying to deprive coal projects of new financing “haven’t thought as much about the potential damage if their scheme actually worked.” As evidence, he points out that “cheap coal is the backbone of cheap electricity—a boon for the poor even as it harms the planet overall” and urges us to keep the harm of coal-based electricity “in perspective,” since global emissions would rise by only 1 percent if a billion people in developing economies were to use coal-based electricity. The implication is that we should think twice about definancing the coal industry.

This simple utilitarian calculus is appealing, but it is woefully incomplete. Quantifying the harm done by coal-based electricity is not a simple back-of-the-envelope calculation, because one must consider the effects of new infrastructure over the course of its lifetime, including long-range economic and political effects. The availability of energy generates opportunities for economic activity that in turn generate increased energy demand. If the initial legal and business infrastructure is designed to support coal (considering, for example, import/export terminals, coal mines, and coal transportation infrastructure), then meeting growing energy demand with more coal (and more coal infrastructure) may be incentivized. Additionally, economic power is political power. Expanding the coal industry’s reach into new economies and geographies doesn’t just generate more emissions; it also generates institutional and structural inertia, political clout, and obstruction. These important socioeconomic and sociopolitical feedback loops are ignored in Victor’s 1 percent calculation. Consider China, which obtains three-quarters of its electricity for its 1.4 billion people from coal and which emits over a quarter of global emissions, not a few percent. Finally, coal reserves are massive: burning through proved coal reserves would dump 600–700 billion metric tons of carbon into the atmosphere, but the Paris agreement’s carbon budget is only 200–300 billion metric tons for all fossil fuel reserves combined. This makes coal infrastructure especially dangerous; when economies become dependent on coal, they cannot depend on supply scarcity to signal the need to change.

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What about Victor’s claims about industry funding?

No one knows exactly how pervasive these financial relationships are, but many of academia’s most influential centers for energy and climate research appear to have financial ties to fossil fuel interests, including Harvard’s Consortium for Energy Policy Research (which has received funding from Shell and Apache Corporation), Harvard’s Environmental Economics Program (BP, Chevron, and Shell), and MIT’s Energy Initiative (BP, ExxonMobil, Saudi Aramco, Shell, Chevron, Schlumberger, Statoil, and Total, to name a few). Harvard's Belfer Center for Science and International Affairs, where I am a research fellow, receives funding from BP. Columbia’s Center on Global Energy Policy recently had its funding from ExxonMobil exposed; the fact that such funding arrangements have to be exposed at all invites the question, why so much secrecy for academic research? And vocal opponents of divestment—including Harvard economist Rob Stavins, Stanford economist Frank Wolak, and Daniel Fischel, president of the consulting firm Compass Lexecon and professor emeritus at the University of Chicago—tend to have financial or professional ties to the fossil fuel industry.

One reason industry funding is problematic is that it interferes with the ability of universities to set their own policies. Some professors openly express their fear of industry backlash should divestment occur. MIT’s Brad Hager, director of the Institute’s Earth Resources Laboratory, argued against divestment in part because he thought it might jeopardize the funding MIT gets from the fossil fuel industry. Hugh McCann, head of the engineering school at the University of Edinburgh, opposed divestment because he thought it would hurt the standing of the school in the eyes of the fossil fuel industry. And MIT ultimately rejected divestment from any fossil fuel sector for fear that it would reduce the willingness of the entire industry to collaborate. Victor rightly states that relationships with industry should be “at arm’s length”—but many of the relationships we know about so far clearly aren’t. Funding, the conferring of professional advantages, and other forms of patronage produce a range of side effects, both intended and unintended.

It is not enough to reassure us that money does not influence academic research. We know that it does.

Victor points out one of these: the halo effect. For example, ExxonMobil recently tried to deflect charges of misleading the public on climate change by pointing to its research funding at MIT and Stanford (as if funding and deception can’t occur simultaneously). When companies give universities and researchers funding, they are able to draw from the university brand and the claims to objectivity, neutrality, and public service commonly associated with the academic enterprise. As a result, funding is a great public relations resource for companies. The halo effect was utilized for decades by the tobacco industry to promote its public image—to the detriment of public health. Of course, even if funding is hidden from public view, the halo effect still works in the minds of influential researchers who know the source of their funds.

But the halo effect isn’t the only bang that companies get for their buck. Other effects of patronage include direct commissioning of opinions, institutional dependency (as in MIT’s fear of divestment), influence on research directions, influence on who directs influential research programs, subconscious bias among researchers, conscious framing of research questions and conclusions for patrons, opportunities for companies to establish relationships with influential experts for expert testimony and consulting, and direct conflicts of interest among experts (such as professors who consult for the oil and gas industry being asked to give a public opinion on institutional divestment from oil and gas).

This is not to say that universities should forswear industry funding outright. The appropriateness of funding depends significantly on the research area. Consider industry-funded carbon capture and storage (CCS) research, which Victor mentions. CCS is special because it is a politically potent technology: it offers a loophole to the logic that fighting climate change requires a dismantling of the fossil fuel industry. Thus, even if CCS is never actually realized as an economically useful technology, promoting the possibility is useful to fossil fuel companies because it promotes indecision about anti–fossil fuel policies. If CCS is economically viable, one might ask why the industry has not developed it already, given the industry’s decades-old knowledge of climate change, its immense resources for research and development, and the importance of CCS to the industry’s future. These concerns aside, industry funding for CCS research may indeed be appropriate, because the industry has a clear interest in making CCS more economical. It is likewise sensible for semiconductor companies to fund photovoltaics research and for insurance companies to fund climate change impacts research. Clearly, though, fossil fuel industry patronage of climate policy or renewable energy research—work that threatens the core business model of fossil fuel companies—invites conflicts of interest that should be examined.

Industries that provide academic research funding often have a more advanced understanding of its importance than researchers do. The tobacco and pharmaceutical industries, for example, have rich and documented histories of trying to use patronage to influence researchers, the public, and their markets. A great deal of money is at stake in those markets; the same is true in the climate and energy fields. It is not enough to brush aside concerns about industry patronage by giving reassurances that money does not influence the academic enterprise. We know that it does.

What about the costs of refusing industry funding? As Victor points out, “energy companies have useful data and access to terrain that researchers need to investigate.” This is true; industry-university collaborations can be useful to both parties. But that does not mean that universities are free to ignore their duties to the public. When private industries, especially those at the root of grave problems, dominate or unduly influence academic research, the public is not well served; the social costs outweigh the benefits. This is because it is not simply the number of academic papers published that is important, but also what gets examined, what gets ignored, which policies are promoted, whose behavior is influenced, whose image is bolstered, and so on. The medical field makes it standard practice to consider and examine conflicts of interest from industry patronage; there is no reason not to do the same in the energy and climate fields. And what of Victor’s claim that scrutinizing industry patronage (or divesting from fossil fuel companies) will cause senior managers to refuse advice or collaboration from academia? Rational managers seek and accept engagement because it is useful to them. That is true irrespective of university policies regarding conflicts of interest.

Managing fossil fuel industry funding in academic climate and energy research will take time. The first step is to disclose such funding systematically. For a collective problem as important as climate change, the public deserves to know who is funding the research that we are all depending on.