Hi James, thanks for this and I feel like this research is super-helpful. As you know, we at Giving Green have also explored the question of protest (as a form of what we call "outsider legislative advocacy"), and are also generally bullish on these techniques. But also, (as you mention), I think only a small minority of protest movements are really successful. We've had a lot of trouble identifying organizations we want to recommend in the context of climate policy in the US.
We're looking forward to applying your findings as our search continues!
Sorry, looks like our write-up of CCL didn't make it into that document. Sorry for the wrong info. I'm going to stick with my opinion there there is no viable path towards carbon pricing in the near term in the US, and also that carbon pricing in practice has not been a very effective lever for reducing GHGs. I'd be happy to change my mind on either of these points in the future. I like this article as a nice argument to be skeptical on carbon prices: https://bostonreview.net/articles/leah-c-stokes-matto-mildenberger-tk/
Hi Max, thanks for your comment. We quickly looked into CCL in 2020, and wrote up a "shallow dive" here. While we support the carbon tax push of CCL in theory, our assessment is that there is currently no clear pathway to passage of such a provision as it's not supported by either party. We therefore decided not to pursue further research into CCL at that point, but are open to revisiting them in the future.
I don't agree that a carbon pricing is the only way to reach our climate goals- my view is that reductions can alternatively be reached through regulations, and this is a more realistic path forward given political headwinds in the US. At least this seems to be the case for the foreseeable future.
Hi Matthew, thanks so much for the thoughtful reply. I'm sure the team at Founder's Pledge will have some comments on this, as they have gone a lot deeper into the model for 45Q, but I'll drop a few thoughts here.
I think that a lot of your comments have validity, and underline why 45Q is controversial among environmental groups. In theory it could keep old coal plants alive, and could give old oil fields a new lease on live through EOR.
Truthfully though, I don't think it's realistic that 45Q keeps a significant amount of coal plants alive. Like you mentioned, CCS for coal plants has never worked and I don't think many people realistically see it working anytime soon. The unit economics of coal are only getting worse, and CCS/45Q are not going to save them.
The reason why CCS is an exciting technology is not for power plants (which, as you correctly note, can be much more efficiently replaced with carbon-free energy sources), but for use in the future for hard-to-abate sectors like heavy industry (concrete, chemicals, etc). Investments like 45Q are a means to an end- a way to incentive R+D in the hope that this becomes a viable technology down the road when we really need it.
I see you have some skepticism on the learning curve estimates, which is quite reasonable. It's very hard to predict the speed of innovation, and I think smart people disagree on whether CCS will ever become viable at scale, and if so how long it will take. Therefore we should all have really wide bounds on the cost-effectiveness estimates of something like 45Q, and yes there's probably some part of the distribution that is negative.
But CCS is such an important potential technology in the broad scheme of things, and I believe strongly that it is deserving of huge amounts of investment. 45Q is a politically feasible way to leverage government funds to do this. From my perspective, it is absolutely worth it to get this investment, even if it means in the short terms that a few oil fields hang on a little longer than they could have. The long-term payouts in expectation are just too large to ignore.
I'm not directly involved with this effort, but I do know that CN has a new person in charge of trying to make these impact ratings work, and they are trying to think very creatively about how to improve and add value. They need something they can do at scale and it's a tough job. I know this because their team has been reaching out to various people in the space (myself included) to help with brainstorming. So just to say, they are definitely not burying this effort. I think it's still unclear if CN will be able to turn this effort into something compelling, but I think it's worth waiting to see what their new team comes up with before passing final judgement.
Hello Maxwell, we at Giving Green have recently begun tackling this issue, from a couple of angles. We have two reports, one on ESG Funds and Climate Impact and one on Impact Investing for Climate. The ESG report covers more passive strategies like index funds (mostly public equity portfolios), while the impact investing report is more about active, riskier strategies to help pro-climate businesses get capital.
Overall, there weren't totally clear conclusions. On ESG, We're relatively skeptical of the classic "divest from bad stuff" approach of most ESG funds. As you noted, some funds use shareholder proposals and proxy voting to push an agenda, and we indeed think this is more promising. We list some options in the report.
Impact investing is harder, especially if you are a retail investor without a lot of capital behind you. Basically there are few entry points, but the market is changing rapidly and hopefully there will be more options soon. I agree with jackva that PRIME is a great option, but it's most easily accessible through a DAF, meaning you are playing with philanthropic capital. If you want to make an equity investment that has a chance at a return, minimum is 250k. I believe they have some bond/note type options with a 50k minimum. We list some other options in the report, but there's no slam dunk.
We plan to keep working on this workstream, and plan to publish more reports and recommendations in 2022.
Thanks Johannes for the reply. I agree with you on (a) and (c), but I'm a bit confused on (b). I understand (and for the most part) agree with your view that "technology-specific support and innovation policy" is a very promising route for philanthropic engagement to fight climate change, but I'm struggling to see how this recent shift in climate badness predictions adds additional support for this route of intervention vis-a-vis other mechanisms (rich-country policy advocacy concentrated on reducing domestic emissions, projects that directly reduce emissions in the short term, etc.)
Thanks for this report, very interesting. I think that the question on everyone's mind after reading this is: what does this mean for the EA viewpoint on the importance of climate change as a cause area (which is already somewhat controversial)? Sounds like the two of you disagree and John is working on a report on this, but I'd say that I am quite interested to see this report and both of your views on the subject.
Hello Manny, thanks for the encouragement and good ideas! Some quick responses to your points:
Finally, I'd say that I don't really think that the carbon markets are a promising form of funding for activism. Corporation (who are the primary buyers of carbon credits) seek certainty of emissions reductions so that they can make their "carbon-neutral" commitments (no matter how sketchy this may be in practice.) I don't think many corporations are going to have hunger for less certain and politically controversial activist "offsets". I think this space will have to be funded by philanthropy.
Thanks for your feedback! It was really helpful and gave us a few things to think about. A few responses: