| One huge caveat is that divestment from oil / fossil fuels is in no sense a moral, ethical or socially responsible act, yet lots of organizations (like famous universities or the Norway sovereign wealth fund) try to play the divestment card to curry goodwill and social signaling. The reason divestment is not “morally good” is that the current price of the assets reflects the net present value of all future cash flows for those assets. So if you choose to sell and materialize those assets as cash today, you’re just expressing a preference for cash instead of oil assets, but are not fundamentally signaling anything about the future cash flows. Particularly if you are realizing a profit in cash from having held those oil assets for a long time. If you wanted a divestment-like action that could possibly be considered a morally good stance on climate change, then you should give away your assets to groups of people likely to receive direct negative externalities from continued operation of the oil industry. Liquidate your position in oil and give away that cash to coastal property owners, developing countries, laborers or communities exposed to environmental damage. After all, it has been your choice to hold those assets and act as a shareholder demanding increased value (which you received) that has been a huge reason for environmental damage in the first place. Any possible way of realizing a capital gain from that environmental damage you incentivized with your shareholdership is at best nothing but everyday financial activity and at worst greed. I can’t stress this point enough, that merely divesting and realizing capital gains from selling out of your oil asset position is emphatically not a moral or ethical stance on that industry, not an attempt to migrate to renewable energy, nothing. Divestment is literally nothing but realizing a profit from capital gains in one particular way. The public moralizing about it, I think, is just a way to let rich people have their cake and eat it too, because the yes-man thing they want to hear is that there is a possible way to extract big profits from oil investment while at the same time promoting migration away from fossil fuels. But you can’t. |
The largest issues if we were to stop oil production immediately wouldn't even be monetary, they would be ethical, as it would massively reduce food production and distribution.
Basically, Norway is working closer to the hardware when they stop oil production.