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Climate Philanthropy in a New Policy Landscape

Date: November 8, 2022

Daniel Stein

Founder, Giving Green; Chief Economist, IDinsight

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The dust is finally starting to settle after a wild roller-coaster of a ride for U.S. climate policy. When all is said and done, three bills with major climate implications (IIJA, CHIPS, IRA) have passed the 117th congress. In a previous post on this blog, I argued that the most impactful philanthropic lever for donors looking to fight climate change was to push for systemic change in policy and technology. These bills (fueled in part by major philanthropic efforts) represent a major victory, and a critical step in the right direction toward the systems change that we need. But after such a major accomplishment, what’s next? There is still a lot of work to be done, and there are more opportunities for smart climate philanthropy than ever before.

At my organization Giving Green, we’ve been working to identify the most high-leverage philanthropic opportunities in this new landscape. Below are four strategies we think have particular promise.

1. Win the IRA: The Inflation Reduction Act of 2022 (IRA) is the most meaningful piece of climate legislation in the U.S., arguably the world. But even though the ink is dry on the law, there is a lot more work to be done to ensure that it meets its goals. After a law passes, federal agencies must turn legislative text into actual rules. To quote climate policy expert Leah Stokes, this is when the “fog of enactment” descends, and when special interest groups mobilize to water down climate policy.

As a resident of San Francisco I’m used to seeing the fog rolling in over the hills, and let me tell you, the IRA fog is coming in thick. The next couple of years will be a crucial period for climate nonprofits to ensure that IRA provisions get implemented quickly and meaningfully. As donors, it will be difficult to navigate this space, as every climate policy nonprofit is shifting strategies to IRA implementation. To a certain extent this is good, as there’s a lot of work to be done. But it can be difficult to identify which nonprofits are doing truly meaningful work. Donors should look toward nonprofits with deep expertise in legislative details, agency rulemaking, and state-level policy. The organizations that created certain legislative elements of the climate bills are likely the ones best placed to ensure their implementation goes smoothly.

2. Stand firm on firm power. The last decade has seen an incredible decline in the cost of wind and solar power. The IRA and other similar policies around the world are spurring mass deployment of renewable energy, and this is great. But it’s not enough — as everyone knows, the sun doesn’t always shine and the wind doesn’t always blow. Our power grids need “firm” power, i.e. sources which can provide energy at all times. The path to get to zero emissions for firm power is murky.

Many energy and climate experts are coalescing around the conclusion that the most realistic way to get there is through development and deployment of advanced nuclear power. Advanced nuclear promises safer, cheaper, and more flexible carbon-free energy than current nuclear designs. Especially in the U.S., there are shoots of optimism around advanced nuclear, with eye-popping private sector investment, the Department of Energy-funded demonstration projects, and the first ever U.S. certification of an advanced nuclear design. But barriers remain: byzantine licensing requirements, high costs, trade restrictions, and a skeptical public. Philanthropy has a major role to play in ensuring that advanced nuclear becomes a reality, and there are a small number of underfunded expert nonprofits working to remove the multiple barriers to scale-up.

Nuclear power isn’t the only way to get to net zero. Donors uncomfortable with funding nuclear power should take a cold hard look at other pathways (good analysis of U.S. pathways here), and think about how to ease the many constraints to achieving a clean grid without nuclear power. It will take huge amounts of land, advancements in energy storage, massive transmission buildout, and likely natural gas plants with carbon capture and storage.

3. Heavy Industry, heavy challenges: In sectors like electricity and ground transportation, we can see a clear path to a zero-carbon future. In others, like heavy industry, there is even more work to be done. Although there are technological pathways to making industries like steel, fertilizer, and concrete carbon-free, there is no reason to think carbon-free versions of these products will be cheaper to produce than carbon-intensive ones, at least not in the medium term. And there are few incentives in place for companies to invest in green production technology. Philanthropists can work to change this. A handful of nonprofits have started working on this issue, working with purchasers of raw materials to demand zero-carbon products, and showing companies pathways to zero-carbon production. As always, there is a large role for governments through investment, procurement, and regulation. (Great overview of the challenges and solutions pathways in this Volts podcast with Rebecca Dell of the ClimateWorks Foundation.)

4. Don’t forget agriculture: Although agriculture and land use are responsible for around 18% of global emissions, there is essentially no plan to reduce agricultural emissions globally. Agricultural emissions are barely covered in the IRA, and are exempted from the EU’s European Trading System. Within agriculture, the biggest culprit is livestock. Livestock belch methane and require a lot of land, both directly for grazing and indirectly for their food supply. As noted in Giving Green’s forestry report, we think that reducing meat consumption is the most promising pathway to reducing deforestation, as this is one of only a few strategies that addresses the underlying demand driving deforestation. And as detailed in our food sector emissions report, we think that the most realistic pathway to reducing meat consumption is through the development of alternative proteins. Donors can play an important role by supporting organizations pushing forward policy and research on alternative proteins, which will hopefully help bend the curve on meat consumption in the long run.

Climate philanthropy can be a complicated place — there’s a lot to do, and the needs are always changing. But this is a good thing, it’s a sign of progress. For funders interested in wading into the landscape — and we think everyone should — there are public resources from Giving Green and others available to help guide your giving and maximize impact.

Daniel Stein is the founder of Giving Green and the chief economist at IDinsight. You can find him on Twitter and LinkedIn.

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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