Biden's victory: Is this a special opportunity for outsized climate impact?

Note: This research was conducted for the Founders Pledge Climate Change Fund, which seeks to maximize the positive impact of climate giving. Visit the Fund's page to learn more and donate; your contribution will be used in accordance with the final results of this research.

President-Elect Joe Biden has just achieved a historic win -- defeating an incumbent President in what turned out to be a convincing victory. But, while Biden and the Democrats went into the race as favorites for control of the presidency, the Senate and the House, it looks as though they have under-performed compared to pre-election forecasts and, certainly, compared to hopes of a decisive Blue Wave. At the time of writing, it looks like the Senate will remain in Republican control unless Democrats win two run-off elections in Georgia in early January, whereas, albeit with losses, Democrats maintain control of the House.

While there will be many post-mortems of the election and analyses of the implications for US climate policy, in this post, I will dig into what this means for high-impact climate philanthropy. I will cover how this affects your ability to make a difference through climate philanthropy, whether and how the election affects Founders Pledge’s Climate Fund strategy, and what this means for our top recommendations in this space.

In particular, I will answer two questions:

1. Do the election outcomes change where to give?
2. Do the election outcomes change when to give?

These are not academic questions, but their answers may make a big difference to the climate impact of donations. So, we will put our money where our mouth is, and act on the findings of the research related to this post when conclusions are firmer. In this spirit, any feedback is appreciated, and this post will be updated as our thinking develops.

Implications for climate philanthropy

The results of the election will no doubt impact US climate policy, an area we seek to affect with many of our climate funding opportunity recommendations. The combination of a Democratic House and (likely) Republican Senate¹ highlights the importance of finding bipartisan solutions to issues like climate change. The Democrats will probably need to compromise as their preferred climate policies are unlikely to pass through the Senate.²

So, how will Biden’s victory change how we look at climate philanthropy?³

A key component of our philanthropic strategy in the climate space is what we call "audacious advocacy": We fund organizations that are thought-leaders and advocates influencing both the wider climate conversation and how government and private budgets, orders of magnitude larger than philanthropic budgets, on climate are being spent. To understand how the election affects this strategy, it makes sense to break down the concrete paths via which advocacy can create value:

1. Increasing the pie: First, advocacy can trigger an increase in the proportion of societal resources allocated to fighting climate change. Greta Thunberg’s work is likely the best example of this approach.
2. Improving resource allocation: Second, advocacy can improve how limited resources within the climate space, such as attention, government budgets and political will, are allocated. Default resource allocation is often very far from optimal, as attention and investment into solutions is often not driven by their potential, but by ideological inclinations, political economy, and other factors unrelated to climate impact. This makes improving resource allocation, towards blindspots and bottlenecks, very valuable.
3. Improved policy: Third, advocacy can lead to better policies on specific solutions, such as how to structure support for renewables or the licensing process for advanced nuclear. In comparison to 2, these improvements are not necessarily related to distribution of resources, but improving the effectiveness of allocated resources.

Our recommended funding opportunities mainly focus on mechanisms 2 and 3, while both the Biden campaign and grassroot climate movements such as Fridays for Future, Extinction Rebellion and the Sunrise Movement can be seen as examples for mechanism 1.

Where should I give?

The “where” of this question can be interpreted in a number of ways, but here we focus on geography, advocacy type and partisan alignment, three key dimensions of philanthropic strategy, and how the election results affect our conclusions.

In light of Biden’s win, the US is now a more appealing country for philanthropists looking to improve policy via funding advocacy. Under Trump, we already believed that giving to improve US climate and technology policy was a top leverage option for donors because of the strength of the US energy innovation system, and Biden’s win opens up even more doors for impact.

One could argue that this means we should feel less compelled to focus funding on the US, as default policy without additional advocacy might be better (with less room for improvement). However, we believe that this consideration is outweighed by the increase in opportunities and the larger “pie” that US-focused advocacy can affect, overall making it more attractive to fund.

In terms of advocacy type, our climate work has been focused on advocacy that targets key decision-makers to improve resource allocation and policy, rather than grassroots activism, direct political campaigns or mass engagement. Especially in light of the election result, we believe this kind of advocacy to be more impactful and more neglected than grassroots activism; right now, we need to be working to turn proposals and visions into politically feasible and effective policies. The work of grassroots campaigners like the Sunrise Movement, which targets Democrats to encourage a more progressive climate agenda, likely won’t be so impactful as the US needs bipartisan policy favorable to both parties.

While not philanthropic and outside the remit of Founders Pledge, political contributions might seem like an attractive option for some donors. If the current situation remains, the Georgia races will determine control of the Senate, impacting climate and other important policy areas, but the campaigns are unlikely to be in need of additional funding. Expected funding is in the hundreds of millions, lowering potential for marginal impact, especially when considering counterbalancing dynamics.⁴

Should we take a partisan or bipartisan approach? If there had been a Blue Wave, one could have argued for a more partisan approach, though even then all policy would likely have had to have some bipartisan support. The actual results, however -- a Biden presidency with a fairly Republican Senate and a more Republican though still Democratic House -- put a prize on organizations, such as the Clean Air Task Force, Carbon180 and others that have demonstrated significant policy successes in a fairly Republican political environment and have collaborators across the aisle. On balance, this election and the resulting political environment over the next four years at least seem to reinforce the value of supporting more bipartisan organizations over those strongly tied to Democrats.

Is now a particularly good time to give?

So, we know that we want to focus on audacious advocacy that has the potential to sway key decision-makers and that we should take a bipartisan approach in the US, but does the election result impact the timing of our philanthropy? Can we have outsized impact by giving now?

A combination of a Democratic President and the particulars of the current moment means this answer is likely “yes”. The current situation gives us increased leverage; essentially, advocacy can work on a bigger lever and has more potential to create change.

Joe Biden’s win increases this leverage in a number of ways: Biden campaigned strongly on climate, Democrats tend to be more engaged in solving the climate challenge, and the first years of a presidency are often the most significant when it comes to actions taken and goals achieved. The result? Biden’s early presidency could multiply opportunities for climate philanthropy by a factor of 2 to 3 compared to a later stage in his presidency when he has relatively less power and major climate legislation has been pursued (successfully or not). If the Democrats manage to take control of the Senate in January, this could increase to 2 to 6 times, as Senate control would allow for stronger budgetary policy.

Meanwhile, we are living in a time of economic crisis resulting from the COVID-19 pandemic. Progress on clean energy and decarbonization in general are threatened, however, there is also a great deal of potential. On the one hand, funding for innovation is at risk right now, as noted by the International Energy Agency’s July report that outlined how the economic recession threatens critical innovation funding streams for the more than two thirds of climate technologies that are still in need of significant development. In addition, many emerging economies have seen a resurgence of coal in the light of the COVID recession, and -- more generally -- stimulus bills to revive the economy risk carbon lock-in, a delayed transition to low-carbon solutions, because of incentives to save carbon-intensive assets.

On the other hand, stimulus bills have significant positive potential as they affect how money is invested over the long-term and can, when focused on green investment, drive significant positive change and technological learning facilitating a low-carbon transition. What’s more, even in a scenario where the Senate stays Republican, both parties’ recognition of the need for stimulus could create a powerful window for climate policy through a green stimulus.

Let’s say the current economic situation multiplies opportunities for climate policy by between 1.5 and 4, compared to a situation where government spending for clean energy (and everything else) is much more constrained and where innovation is less at risk from a collapse of private capital. If we then multiply that by our leverage projections for Biden’s presidency in isolation from these special circumstances, leverage could increase by between 3 and 24 times compared to at a later time, with some inherent uncertainty, some uncertainty to be resolved with further research and some uncertainty related to unresolved Senate control. That means that we can likely have more impact by supporting climate advocacy now than we would have had in the last four years and, crucially, also then at a later time in Biden’s presidency.

These are very rough estimates and should not be taken literally, but rather to illustrate that – in advocacy-oriented philanthropy – some times are likely much more decisive than others and we are now entering a period of increased leverage for US-based climate philanthropy.

We also know from recent history that this can be true; some points in time have greater opportunity for outsized impact. Take Obama’s 2009 Green Stimulus as an example, which is widely recognized as one of the most consequential climate policies of the Obama era, with the current economic crisis inspiring a Green stimulus of a much larger size. Similarly, the failed American Clean Energy and Security Act (also known as Waxman-Markey), which would have been a landmark legislation regulating US emissions under a cap-and-trade system, was also pursued in the first 1.5 years of the Obama administration, while climate policies that came later were much more incremental.

Of course, climate philanthropy is a relatively crowded space and everyone else is observing this dynamic as well. So it could be the case that the increased leverage this moment presents is fully "priced in", with everyone giving proportionally more now so that – at the margin – donations now are not more impactful than those made at other times. This is an eventuality we are investigating but from initial conversations and research, this seems unlikely to be the case. It does appear that some work is less likely to be underfunded now, in particular advocacy around solutions that are very popular with many Democrats, such as support for renewable energy or, if the Senate remains Republican, using executive authority to control emissions via the EPA and the Clean Air Act.

However, the solutions we focus on – advocacy for policies accelerating neglected technologies to facilitate global decarbonization – are unlikely to automatically profit from a funding surge proportional to the increased opportunity that the Biden presidency and a potential green stimulus provide. Indeed, because many of the solutions we focus on – such as carbon capture, negative emissions (carbon removal), advanced nuclear and industrial decarbonization – are traditionally overlooked by or unpopular with (progressive) Democrats, it could even be the case that they become relatively more neglected compared to those approaches inspiring the public imagination, such as wind, solar and electric cars.

While more research on this is clearly needed, it seems unlikely to me at this point that the “pricing in” of the increased leverage is perfect. Rather, I believe that filling current funding gaps provides significantly more impact now than at most other times.

Our conclusions so far

To conclude, we believe that Joe Biden’s victory likely provides an opportunity for philanthropists to have outsized impact in the climate space during this time, particularly if we support audacious advocacy focused on neglected solutions pursued by organizations with a track record for bipartisan success. We believe philanthropists can exploit this special opportunity by giving earlier. However, we cannot be certain in our conclusions; this blog covers our early conclusions from ongoing research. If you have reason to think we’re wrong or would like to provide us with feedback, we’d love to hear from you. Please reach out to johannes@founderspledge.com.

If you’d like to donate to high-impact climate organizations at this time, we strongly recommend giving through our Climate Fund. The conclusions of our investigations into the impacts of Biden’s win will inform how we distribute contributions to this Fund going forward.

We’re thrilled that Founders Pledge member Erik Bergman has generously offered to match Climate Fund contributions up to a total of $1.2 million before December 31. If you are a Founders Pledge member passionate about investing in effective climate solutions and you’d like to take advantage of Erik’s match, please contact funds@founderspledge.com.

If you are not a Founders Pledge member and would like to donate, you can do so via EA funds for donations of less than $10,000, or by emailing funds@founderspledge.com for donations of $10,000 or over. If you donate via EA funds, please forward your donation receipt to funds@founderspledge.com in order to be eligible for Erik’s match.

Notes

1. Even if the Senate flips Democratic through two wins in Georgia, the majority would be razor-thin and it would be unlikely that strongly partisan policies, such as the Green New Deal, would pass the Senate; in any case the majority would not be filibuster-proof. ↩

2. Of course, the President can also revert to executive orders as a form of “policy” making, bypassing the legislature. While this can be a tool for climate policy, the fact that it can easily be reversed by future administrations makes it less robust, it is also no full equivalent to legislative policy. ↩

3. For a deep dive into our general conclusions surrounding climate philanthropy, see our Climate Fund Prospectus and new Climate Report executive summary. ↩

4. The idea that in highly politicized environments, observable funding gains on one side quickly lead to increased funding by opponents, possibly leading to a situation of increased spending without increased counterfactual impact. ↩