Shadows of divestment: The complications of diverting fossil fuel finance

Abstract

This forum article offers a critical assessment of the strategy of divestment from fossil fuels as climate action, considering the unintended or spillover consequences of reinvestment in other industries. With a focus on two sectors—agriculture and renewable energy —it examines how reinvestment to achieve competitive financial returns might exacerbate non-emissions-based environmental and social damage. The analysis draws on established and emerging research in global environmental politics on the political economy of commodity trade to sound a cautionary note about divestment, arguing that the strategy can maintain the status quo as readily as it can disrupt systems of power. A focus on divestment addresses a crucial immediate problem, but without a critical look at reinvestment and the current political economic order, activists could be reinforcing the same systems of environmental and social damage they are aiming to dismantle.