Here is an article some UVM divesters wrote for the Montpelier Bridge New Economy Special edition. The published article got cut down a little. Fortunately, you all can see the full article right here!
Cool Economics in a Heating World: Capitalizing on Youth Involvement in the New Economy
By: Daniel Cmejla, Alex Prolman
February 7th, 2013, student activists rally inside UVM’s Davis Center. A banner, eagerly watched by several hundred pairs of eyes, slowly unfolds over a banister. Its contents: a duct-tape bar graph demonstrating the correlation between portfolio tracking error and incremental risk for various levels of investment screens. Projecting into the megaphone, a student shouts: “WHO’S EXCITED ABOUT ECONOMICS!?!” The crowd roars back.
There’s a movement building.
At nearly 300 colleges throughout the country, students are beginning to ask probing questions about the ways their billions of dollars in endowments are being invested.
We are asking our administrators to remove major fossil fuel holdings from our portfolios, to drive the message home that these destructive energy sources do not have any part in a sustainable society. As the future leaders of the world, we’re making it clear that pollution without payment is unacceptable.
Of course, while the rhetoric is nice, trying to bring social justice values to the highly-diversified $400 billion endowment market is almost quixotic. If we divest, then move on, our endowments will hardly be any more just or sustainable—money that was in BP now flows to Monsanto, Goldman-Sachs, and Wal-Mart. So what’s the alternative?
Invest in the New Economy.
Efforts to involve today’s youth in this type of solution-oriented economic activism have a lot going for them. Rapidly deteriorating environmental and socioeconomic conditions around the world have conjured genuine moral outrage out of youth apathy.
Imminent threats of ecosystem collapse and resource scarcity, alongside the tangible examples of only a 1°C increase in global temperatures (like the increasing frequency of events like Hurricane Irene) are more than cause for alarm. A resultant sense of responsibility and impending struggle has been impressed upon those who will have to directly confront the limits to growth in their lives. Now, as a new generation begins to enter the workplace, we want to work for a New Economy.
Redirecting Vermont’s economy will require multi-generational cooperation that combines the energy of students with the wisdom of experts, but how do we get there?
350.org’s “Do the Math” campaign publicized the real constraints of known carbon reserves (leaving around 80% of current reserves in the ground is necessary to avoid catastrophic climate change), while the Occupy movement publicized incendiary inequality statistics (the top 1% of the country owns 40% of the nation’s wealth). The quantification of these free-market failures has exposed a generation to the idea of New Economic thought.
Now, students across the state are taking action. Groups like Ideas for Policy from the Vermont Law School are mobilizing student support for climate legislation in Montpelier. Students from Middlebury, UVM, Green Mountain College, and others are hosting teach-ins, speak-outs, public debates, and developing the networks needed for more coordinated action.
Together, we can use our endowments to champion truly responsible investment philosophies that increase resiliency to the risk associated with unburnable carbon, while at the same time encouraging investment solutions that yield positive change and positive returns.
This movement is being met with resistance, for fear of lower returns. However, in our eyes, it’s insufficient to consider investments only by their quarterly returns; the New Economy is fundamentally different. It emphasizes development over growth and the type of system change we’re advocating for that is so sorely needed.
Over the past 5 years, State funding for Vermont public colleges has dropped by nearly 20%, and tuition has risen 27%. Student loan debt surpassed credit card debt in 2010, and has been outpacing it ever since. If this isn’t a recipe for another bubble, we don’t know what is.
Meanwhile, when local philanthropists make donations to colleges, hoping to improve the quality of their children’s education, it goes to bankroll obscenely-paid executives or to build factories overseas, with only 5% (at best) going back into the institution each year. We propose an alternative:
Colleges and universities invest more of their endowments locally. State funding goes to the college, as well as donations from private philanthropists, and it stays in the state through local investments. It’s wrong to assume that in-state businesses cannot match the returns of mature corporations. And it's just as wrong to measure local investments solely by their immediate returns--an improved local economy means more income for Vermonters and a broader tax base with which to fund Vermont’s education.
Engaging in this discourse and redirecting the flow of investment in Vermont can pave the way for broader efforts to redesign finance and the way our economy works.
To get at these ends: The New Economics Institute (NEI) Campus Network campaign is making great strides towards strengthening a network of energized student campaigns across the country. Economic leaders like Bob Massie and John Fullerton, both of whom spoke at an NEI summit at Middlebury this past month, seek to take Vermont student involvement beyond divestment and into the realm of the New Economy. This campus network activation will continue with the VT New Economy Series at UVM.
From food coops to local venture capitalists, from renewable energy projects to the equitable financial structures that help fund them, from state climate legislation to local climate adaptation, we are pushing for the generative steps we need to take. At UVM, on April 27th, we are gathering the best and brightest of Vermont to take a collective stab at transformative change. We know the solutions to a better economy are out there. For our future’s sake, we ask all to join us and pursue them together. '
Check out www.vtneweconomy.org to register or for more info.
Check out www.vtneweconomy.org to register or for more info.