If You’re Worried About the Climate, Move Your Money

A decade and change ago, as the world woke up to the catastrophe of climate change, campus activists were looking for ways to heal the environment at scale. They landed on an unusual one: the free market. Climate change is the world’s biggest unpriced externality, in that neither the producers nor the consumers of fossil fuels pay for the damage they cause to the environment. Gas is too cheap; ultimately, every living thing on the planet bears the cost. Perhaps activists could get the market to price that externality in by nudging investors to divest.

Students at dozens of universities, galvanized by the nonprofit 350.org, began protesting at academic-leadership and investment offices, asking for endowments to quit holding shares in fossil-fuel in 2012. “We realized that investing in fossil fuels was an unethical position.”