There is a growing global movement for the selling (divestment) of shares in fossil fuel (coal, oil and gas) production companies. 

David Knight's article evaluates the four main reasons that have been suggested for divestment: 

  1. Divestment is moral;
  2. Holding fossil fuel shares is risky;
  3. Selling them helps to strip fossil fuel companies of their enormous and undemocratic power;
  4. Divestment would be good for the climate and the environment if it leads to fossil fuels being kept in the ground.  

He concludes that there is a strong moral case for divestment, and that fossil fuel shares are indeed volatile, overvalued and therefore risky investments.  He further concludes that, while there is a chance that widespread divestment might help to reduce the power of fossil fuel companies, there is no economic mechanism by which it could help with the urgent task of  keeping much of the world’s  fossil fuel reserves in the ground. 

Divestment is not a magic bullet, it’s a part of what needs to be done to tackle climate change.  The author argues that divestment must be accompanied by campaigning for even more radical changes including:  Reforming the economic system; A progressively tightening cap on fossil fuel production as component of a Cap & Dividend (or similar) scheme administered by an independent Global Climate Trust; the ending of fossil fuel subsidies; and a massive investment in renewable energy, energy storage, energy conservation and energy efficiency to replace fossil fuels.