- Harvard University has purchased thousands of acres of California vineyards worth an estimated $US305 million.
- The vineyards’ prime access to groundwater makes them increasingly valuable during a drought.
- The investment has fuelled concerns that Harvard is using its $US39 billion endowment to hoard water rights amid rising global temperatures.
- In May, environmentalist Kat Taylor resigned from Harvard’s board of overseers, citing ethical concerns about “water holdings that threaten the human right to water.”
Harvard University has purchased thousands of acres of vineyards in the last six years, but it may not be solely interested in producing wine.
The institution is scooping up land with prime access to groundwater, a resource that’s become increasingly scarce along California’s Central Coast.
From 2011 to 2017, California was hit by one of the worst droughts in its history. It was a situation so dire, California Governor Jerry Brown declared a state of emergency. Though the emergency was lifted in April 2017, the US Drought Monitor still classifies some California areas as suffering from extreme or severe drought, characterised by water shortages and crop loss.
At a time when water resources are limited, land where groundwater is abundant becomes inherently valuable. That pattern is likely to continue as rising global temperatures threaten to exacerbate drought conditions in California and other areas of the American Southwest.
The Wall Street Journal reports that investors first approached Harvard about investing in groundwater-rich land in 2012. From there, Harvard gained ownership of a company called Brodiaea, which started to buy up large tracts and plant vineyards.
The investment money came from the university’s $US39 billion endowment, which is the largest academic endowment in the world. The Wall Street Journal reports that Harvard’s vineyards are now worth $US305 million – more than three times what they were worth in 2013.
Harvard isn’t the only university using its endowment to invest in coveted natural resources.
In 2017, Bloomberg reported that both Northwestern University and Rice University had invested inBlack Stone Minerals LP, a Houston-based oil and gas company that publicly trades minerals. Oklahoma State University has also acquired the rights to more than 2,000 active wells across 14 states.
Because these rights are tied up with the oil, gas, and coal rights on the same land, they have proven incredibly lucrative. But the process of burning coal or drilling for oil can produce harmful emissions that lead to more extreme global temperatures.
When those temperatures lead to drought, Harvard’s vineyards could become even more precious.
Though Harvard has insisted that its investments are “purely agricultural in nature,” the university has shown an interest beyond growing and selling grapes.
The Wall Street journal reports that Matt Turrentine – the man who approached Harvard about investing in vineyards, and later filed the paperwork to create Brodiaea – hired hydrologists to claim that Harvard’s vineyards were separate from areas required to limit their groundwater drilling.
Brodiaea has already hired rigs to drill wells on Harvard’s property in the Cuyama Valley.
In May, environmentalist Kat Taylor, who is married to billionaire Tom Steyer, resigned from Harvard’s board of overseers due to ethical concerns about how the university was spending its endowment. Her resignation letter explicitly referenced “water holdings that threaten the human right to water.”
In a statement given to Harvard’s newspaper, The Crimson, a university spokesperson addressed Taylor’s concerns.
“We agree that climate change is one of world’s most urgent and serious issues,” the spokesperson said, “but we respectfully disagree on the means by which a university should confront it.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.