Why philanthropy must do more on climate change
History is replete with examples of societies that vanished when the local climate changed. But the threat we face from climate change today is much greater than that, because it’s not local, it’s global. Human activity is changing the climate of the entire world, and the impact will be felt everywhere and by everyone—particularly those who have the least, who will be hit first and hardest.
We are already experiencing significant effects with costly consequences: sea level rise and damaging storm surges in south Florida; a doubling of forest fires in the western United States; deadly droughts and famine, like the ones being experienced in Somalia now; and much more. The question humanity faces is whether we deal with this now and limit the damage we have already locked in (because carbon pollution persists in the atmosphere for centuries), or whether we continue on a pathway that bequeaths our children and grandchildren lives that are greatly—and needlessly—diminished.
For while the threat is both huge and global, addressing it is within our reach and excruciatingly close at hand. It doesn’t require upending economies or systems of government. It doesn’t require impossible behavioral change or anything remotely that drastic. Given structures and technologies available right now, it is still possible for nations to transition to clean energy in a cost-effective manner and over a reasonable period of time—improving billions of lives.
Philanthropy has an important role to play in helping make this happen. But it requires a much bigger effort. Less than 2 percent of philanthropic dollars are currently spent in the fight against climate change, much too little given the threat we face. Nor is it enough just to increase spending. Funders also need to collaborate more and better. We must pool our resources, intellectual as well as financial, to find the right organizations to support and the right way to support them if we are to avert the worst harms of a warming planet.
The Hewlett Foundation has some experience coordinating philanthropy to solve climate change, enough to know that we need to do better—that we need more funders bringing more resources to the table and working together more effectively. That’s especially true if we are to overcome newly emergent challenges, like a global wave of nationalism and associated retreat from multilateralism, and the withdrawal of U.S. leadership on climate change.
Climate philanthropy only got going in the early 2000s. The movement made slow progress during its first decade and was dealt two heavy blows in 2009, with the defeat of the Waxman-Markey bill in the U.S. Congress and the failure to reach a multinational agreement in Copenhagen at the 15th Conference of the Parties (COP). But things began to turn around after that, as evidence continued piling up, scientific consensus grew, and global political and business leaders recognized and embraced the need to act. Climate funders changed too. Having learned important lessons, we began sharing information and coordinating more effectively, and we attracted a number of new partners.
Given how things looked in 2010, the progress made by 2016 was simply stunning. True, the policies adopted and commitments made still need to be implemented, and they remain shy of what we need to keep the global average temperature rise below 2 degrees Celsius. But for the first time, the expected temperature rise in the 21st century has not only flattened, but begun to bend downwards, and a process for ratcheting up ambitions is in place.
Consider just a few of the advances made in the last year alone:
- At the 21st COP, in Paris, 194 nations reached an historic agreement to reduce emissions; follow through on “Nationally Determined Contributions” (NDCs), pledged by individual nations to meet their goals under the Paris agreement, will reduce warming in this century by 1.0-1.5 degrees Celsius.
- In Kigali, 197 nations agreed to amend the Montreal Protocol to phase out hydrofluorocarbons (HFCs), greenhouse gas chemicals used in refrigeration and air conditioning, which should save an additional quarter to half degree of warming by century’s end. Plus efficiency gains from the process of implementation will make it easier for developing nations to achieve their national goals under the Paris agreement, helping avoid as much as a half degree of additional warming.
- In October, and after years of negotiation, 191 nations adopted a global market-based measure to address emissions from aviation—the first global agreement to address emissions by an entire industry.
- New solar and wind are now as or less expensive than new fossil fuels in more than thirty countries, including the big emitters. Renewables accounted for more than half of new power generation globally in 2016, and new investment reached a record high $330 billion.
- Growth in global GDP was finally decoupled from fossil fuels, as global CO2 emissions held flat in 2014 and 2015, even as global GDP grew by three percent.
These are remarkable achievements, reflecting a huge amount of progress and momentum toward achieving the two degree target.
Then Donald Trump was elected, claiming that climate change is a hoax cooked up by China. He has pledged to repeal federal regulations on carbon pollution, threatened to withdraw or abandon the U.S.’s international climate commitments, and appointed an EPA administrator who denies climate science. We cannot yet know for just how far the U.S. will retreat from its global responsibilities, but certainly it will surrender its place as global leader on climate—making this a moment for anyone who cares about our children’s and grandchildren’s futures to step forward.
Philanthropists, in particular, must do this. Philanthropy’s current commitment to climate change, a small fraction of overall giving, is manifestly inadequate for the task at hand. Global warming is a potentially existential threat. But even if things never reach that level, the impacts of climate change will, at the very least, dramatically affect other problem-solving efforts, and I mean all of them—whether public health or migration or poverty or inequality or anything else. Unless checked, and soon, climate change will aggravate and intensify all these problems, and its effects will undercut if not fully swamp any solutions. Climate change is everyone’s problem.
Funders — embrace the opportunities
So what can philanthropy do to promote solutions and maintain progress in the effort to mitigate climate change? Effective opportunities to help are plentiful and varied.
First, philanthropists around the world can support the many nations that want to fulfill their Paris commitments. The Paris accord happened because of the unique nature of the agreement, which was negotiated from the bottom up. Nations were brought into the process with arguments about how participating was in their domestic interest, rather than by making appeals to some sense of international obligation. The NDCs plainly reflect this, with each nation committing to make changes that make sense for it.
So long as nations perceive that fulfilling their NDCs is in their interest—whether because they see clean energy as an engine for economic growth or because they know how cheap, clean electricity can lift their poor out of poverty—retreat by any one country, even the U.S., should not greatly affect the others. But meeting ambitious targets will be difficult for many nations, and philanthropy can play a role helping them do so. This is where technical advice and support remain useful, indeed critically important—especially in developing nations. In addition, philanthropy can support independent sources of monitoring to ensure the transparency around progress that is necessary to make the agreement work.
Herein also lies a potential solution to the leadership gap created by the U.S. retreat. While it is unlikely that any single nation, even China, can or will step in to assume the U.S.’s role, the fact that other nations feel genuine co-ownership of the Paris agreement provides an opportunity to foster a new kind of shared leadership, with the E.U., China, India, South Africa, and other ambitious nations (such as Canada, Brazil, Columbia, and Chile) pushing and supporting each other to sustain global ambitions and create market opportunities.
Getting nations to play this way will take thoughtful advocacy, both within each country and around multilateral meetings like the G7, G20, and Davos. Philanthropy can support groups that will encourage the global community to stay on track.
Critical aid in this effort may come from supporting networks of subnational governments that are committed to taking action without regard for their country’s national policy. These include the C40, the Global Compact of Mayors, and the 167 signers of the “Under 2 degrees MOU” coalition that formed in Paris. We can, likewise, begin to rally support from other national and local institutions—trade unions, consumer organizations, grassroots community organizers, and the like—to hold their governments accountable to do their part. These networks of new actors provide an opportunity to sustain or even accelerate action on climate change, and we must do our utmost to enlarge and strengthen them.
Philanthropy can also help rally support from business associations, which increasingly recognize the risks they face and are active in wanting to see action on global warming, and whose continued engagement in mitigating climate change will be crucial going forward. A potentially fruitful and related arena for philanthropic activity is in helping businesses properly price and disclose climate-related risk, building on the recent recommendation of the Financial Stability Board that every business include climate risk in its portfolio. That risk is broad, with near-term consequences in virtually every economic sector and industry. Both as a matter of legally required disclosure of material risk and sensible governance, it is time for businesses to begin routinely reflecting and reporting on climate risks, as well as developing strategies to manage them.
Philanthropy can assist this effort in a variety of ways. We can support organizations that help companies assess and report financial risks from climate, as well as helping them develop strategies to minimize the potential consequences. We have a part to play helping to spread the message and make this sort of disclosure more routine. Our most important role may be supporting experts to help financial institutions develop a shared methodology for valuing climate risk, so financial markets can allocate capital more efficiently.
But the single greatest challenge to mitigating climate change may be modernizing the world’s rapidly expanding energy infrastructure. Technologies exist to supply people with clean energy – for industry, electricity, and transportation – but only if national energy infrastructures are remodeled to do so. The money is there: Between the Multilateral Development Banks, the National and Regional Development Banks, and other Development Finance Institutions (DFIs), there are more than enough resources to get this going. And private funds hold still more opportunity, with estimates of upwards of $120 trillion looking for new investment opportunities right now. But the obstacles are many. These include a shortage of developed projects and of finance vehicles, uncertainty around how to price risk, a lack of reliable financial intermediaries, uncertainty about the regulatory environment in developing nations, and so on. Plus, when it comes to development banks and other DFIs, we must throw inertia, bureaucratic stodginess, and inability to collaborate into the mix.
These are all problems that philanthropy can help address. We can support organizations to provide technical expertise in developing feasible projects, as well as in crafting both finance vehicles and regulatory frameworks that build investor confidence. We can help launch intermediary organizations to connect deals with investors, and we can make funds available to help projects reach a stage of development where they become eligible for international aid. We can help structure investment pyramids to reduce risk and catalyze private investment. And we can work with development banks and DFIs, as well as with finance ministers, to make it easier to obtain funds for clean energy investing.
And what about the United States? It is still the world’s largest economy, not to mention its second largest emitter. So even if other countries stay on a low carbon path, we can’t simply write the United States off. We must begin by doing what we can to preserve the gains of the last several years, supporting advocacy organizations that defend laws and regulations addressing climate change.
A more affirmative agenda can be pursued at the state level. Many states, including some with Republican state leadership, will continue to promote a positive climate agenda, notwithstanding headwinds at the national level. Ohio, for example, just reinstated its renewable standards, and Michigan enacted a law significantly enlarging its. Meanwhile, states like California, New York, and Hawaii, longtime leaders in the transition to clean energy, plan to continue pursuing a robust climate agenda. Opportunities abound to promote economic growth in the states while advancing clean energy, and philanthropists and donors must step up support for these constructive state-based endeavors.
Lastly, we cannot let up on efforts to undo the fatuous politicization of climate change and to foster a healthier debate. Almost all Democrats and a near majority of Republican voters now recognize that climate change is happening and that it has human causes. There is still plenty for conservatives and liberals to argue about: whether to focus on adapting to changes already happening or worry about preventing more in the future, what vehicles to use in seeking to reduce emissions, how to choose between regulation and market solutions, and so on. Philanthropy must build support for addressing climate and accelerating action in the decade ahead. We can and should be open to a broad range of approaches from all political sides—so long as they are genuine solutions.
That’s an ambitious agenda. It builds on and adds to work philanthropy is already doing on climate. Yet few, if any, of our existing efforts can be abandoned. So while today’s climate funders are investing significant resources in climate mitigation and clean energy strategies, we need more. We need to double or even triple the available resources to succeed. We need to engage new funders whose focus is on priorities other than climate but whose efforts climate change will nevertheless impede or undo. Funders must recognize that global warming threatens everything they care about, and that’s true no matter what they care about. Climate change is the biggest, most important problem of our time, and as such, it’s a problem we all need to help solve.
Parts of this essay were adapted from a speech Larry Kramer gave at the Smith School of Enterprise and the Environment at the University of Oxford.
