The Climate Change Fund: Our future plans

What we will do going forward

With your help, we want to go big.

We are agile by design, constantly updating our strategy and seeking to find the highest-impact giving opportunities. Below, we outline three examples of the avenues we are currently researching and the kind of considerations that drive our research and grantmaking. Our thinking is constantly evolving, and we remain open-minded in our search for the very best funding opportunities.

The US: It’s infrastructure week, this time for real

It was a running joke in the Trump era that every week was “infrastructure week” – that the US government would finally come together and spend on infrastructure investments.

President Biden is actually making it happen and the infrastructure package currently deliberated in Congress (the American Jobs Act) would prove the largest infrastructure investment in decades. It would also constitute a major climate investment – a much larger clean energy spend than would have been possible under more “typical” political conditions.

Beyond the crisis moment, there also seems to be a shift in economic doctrine, with a much more positive view of the role of the state and its ability to invest usefully in low-carbon infrastructure, innovation and other societal priorities. This interview with Biden’s Director of the National Economic Council, Brian Deese, makes for fascinating reading/listening, and shows just how much climate action has moved to the center stage of policy-making.

Climate is also, first and foremost, framed as an issue that can be addressed through smart investments that will pay dividends not only for reducing emissions, but also for economic competitiveness and the economy more broadly. As Vice President Kamala Harris put it “When did we last invest? We need to do more than just catch up. We must invest with a sense of urgency.”

This proposed investment into clean technology is more than 10x (!) larger than the previous largest cleantech investment in the US, Obama’s Recovery Act of 2009 (a deep dive is here).

As we discussed in our prior analyses on the implications of Biden’s victory for climate philanthropy, this provides a huge opportunity window for US-focused climate advocacy. Public investments could play a pivotal role in accelerating cleantech breakthroughs critical to global decarbonization and even small improvements to how this pie is allocated could deliver enormous benefits.

As such, our US-based grantees, the Clean Air Task Force (CATF) and Carbon180, are hard at work trying to move the needle to increase support for critically neglected technologies. We will continue to watch this space and further support them or other organizations if time-sensitive opportunities for impact arise.

Thinking globally: Finding sweet spots

While paying close attention to these opportunities, our outlook remains global and we are researching a variety of geographies to ensure we can capitalize on new opportunities and hedge against negative political developments in any one jurisdiction. Of course, we will also look to Europe and its Green Deal (two of our recommended charities, CATF and TerraPraxis, are already active there, and we have also supported other charities in Europe).

We will also look to emerging economies, as roughly 95 percent of new energy demand to 2035 will be in these, outside the OECD. Thus, while not responsible for the vast majority of climate change, the energy trajectories of emerging economies will – to a large degree – influence the extent of global warming.

Just to give a sense of scale – the uncertainty about India’s emissions in 2030 alone is about 4x larger than the difference between the old and the new, more ambitious EU target for 2030 (moving from 40 percent to 55 percent reduction goal for Europe)¹

Yet, this 95 percent of energy build-out is fairly neglected by global climate philanthropy, with only about a third (35 percent) of the funding flowing to these jurisdictions, split evenly between India and China (together, USD 130 million per year) and the rest of the non-OECD world (emerging Asia, Africa, Latin America)²

Thus we can potentially significantly leverage our impact if we promote trajectories of economic development driven by clean energy while also limiting “carbon lock-in”, the commitment to emissions-intensive developmental paths through long-lived fossil infrastructure investments. However, there is a big catch here as in these jurisdictions, escaping energy poverty and mitigating climate change are often in conflict – which is why we want to tread carefully and identify “sweet spot” opportunities that are good for both the climate and lifting people out of energy poverty. (This is why our top intervention strategy to date focuses on accelerating energy innovation, a key solution to avoid these trade-offs, but we believe there are other sweet spots as well).

Thinking over time: Investing catalytically

Just like we are exploring different geographies and interventions to find the highest-impact opportunities, we are also thinking carefully about timing.

Because time is running out and the door for climate impact is wide open in many jurisdictions, we have supported and are exploring more opportunities that seek to leverage opportunities available right now.

However, urgency isn’t everything.

As benefits compound when invested wisely, we believe that sometimes it makes sense to invest in organizations – rather than specific campaigns / activities of those organizations -- to let them grow even if the main impact of this support lies a couple of years down the line. This is why we made the catalytic grant to TerraPraxis and why we are exploring other commitments inspired by this logic of investing in a stronger future.

In essence, when the benefits of investments in an organization compound faster than the climate opportunities that organization can affect decrease (due to carbon-lock in and other exogenous factors), we should choose to invest. Finding the right balance is a hard challenge and something we are currently building capacity to evaluate.

As we grow from a small to a medium-sized funder we will continue to rely on a lean team and an approach to philanthropy that is curious and research-driven, strategic, bold, and laser-focused on impact.

Notes

1. Based on Dubash et al. (2018) for India’s emissions and the EU’s emissions statistics and policy targets. ↩

2. This is not a fully precise estimate as the data is only disaggregated by world region and there are some OECD economies in Asia and Oceania (namely, Japan, South Korea, New Zealand, and Australia) and Latin America (Mexico, Chile, Colombia) which we cannot isolate from the regions they belong to. As such, the estimate is conservative -- biased against the stipulated finding of relative neglect -- as it subsumes some OECD countries under the 35% number, i.e. the 35% is an overestimate of the share going to non-OECD economies. ↩