Thanks to Sanjay and you, I found this very interesting to follow!
Just a quick note on your point 2:
On the counterfactual impact of funds. I agree that this is in principle a gap in the CEA. However, this criticism also applies to almost all CEAs I have ever seen. Accounting for all counterfactuals in CEA models is very hard.
It’s quite possible that I’m missing something here, because I’m not familiar with the context, and haven’t tried to dig into the details. - But FWIW, my initial reaction was that this response doesn’t quite speak to what I understood to be the specific concern in the OP, i.e.:
To be clear, this section is *not* considering the opportunity cost of your (the donor’s) money going to CfRN. Rather, CfRN enables other funds to be raised and donated to REDD+ – this section is considering the opportunity cost on those funds.
I agree with you (Halstead) that the opportunity cost of the donor’s money is almost never accounted for in a CEA. (This also wouldn’t be required conceptually—choosing the donation target with maximal cost-effectiveness across all CEAs would be sufficient to minimize opportunity cost, conditional on the CEAs being individually correct and jointly comprehensive.)
I also agree that “accounting for all counterfactuals in CEA models is very hard”.
However, from my (possibly uninformed) perspective, the force of the OP’s argument is due to an appeal to a somewhat specific, contingent property of the intervention under consideration—namely that this CEA is assessing the cost-effectiveness of a donation the primary purpose of which is to cause a change in the allocation of other (here, largely government) funds.
I think this situation is not at all analogous to “money to [FHI] could have gone to global development”. I in fact think it’s similar to why e.g. 80,000 Hours considers plan changes as their main metric. Or, to give a hypothetical example, consider a health intervention aiming to make people buy more vegetables; when assessing the impact of this intervention, I would want to know whether people who end up buying more vegetables have reduced their expenses for grains or chocolate or clothing, whether they’ve taken out a loan to buy more vegetables etc. - And this concern is quite distinct from the concern that “donations to fund this intervention could also have been donated elsewhere”.
Hello, my response was about the counterfactual value of funds to REDD+ - i.e. what govts and the private sector would spend money on. It is analogous to a donation to FHI: Sanjay is proposing that we should discount money to REDD+ projects because part of the money would otherwise have gone to global development. In the same way, one could argue that money donated to FHI would otherwise have gone to global development and discount by that. This is in principle correct, but it tends not to be done.
Max_Daniel is on the nose about what we were trying to convey.
Let’s imagine another hypothetical example from global development:
imagine that the Fairly Good Charity is 50% as good as AMF
and imagine that Warm Fuzzy Fundraising encourages current AMF donors to donate to Fairly Good Charity instead of AMF
Would we consider Fairly Good Charity to have negative impact because the funds could have gone to AMF? Arguably we could do, but in practice we don’t.
What about a donation to support the operations of Warm Fuzzy Fundraising? I think this is a negative impact. (there’s a parallel with Max_Daniel’s vegetable example)
And coming back to climate change, if we thought that funds going to REDD+ were displacing higher-impact uses of the money, then CfRN too would have net negative impact.
I agree with that. My response is (1) to contextualise this by saying that this feature is true of almost all CEAs, (2) to say that I don’t think the counterfactual use of funds is very good in comparison to effective spending on deforestation prevention.
Thanks to Sanjay and you, I found this very interesting to follow!
Just a quick note on your point 2:
It’s quite possible that I’m missing something here, because I’m not familiar with the context, and haven’t tried to dig into the details. - But FWIW, my initial reaction was that this response doesn’t quite speak to what I understood to be the specific concern in the OP, i.e.:
I agree with you (Halstead) that the opportunity cost of the donor’s money is almost never accounted for in a CEA. (This also wouldn’t be required conceptually—choosing the donation target with maximal cost-effectiveness across all CEAs would be sufficient to minimize opportunity cost, conditional on the CEAs being individually correct and jointly comprehensive.)
I also agree that “accounting for all counterfactuals in CEA models is very hard”.
However, from my (possibly uninformed) perspective, the force of the OP’s argument is due to an appeal to a somewhat specific, contingent property of the intervention under consideration—namely that this CEA is assessing the cost-effectiveness of a donation the primary purpose of which is to cause a change in the allocation of other (here, largely government) funds.
I think this situation is not at all analogous to “money to [FHI] could have gone to global development”. I in fact think it’s similar to why e.g. 80,000 Hours considers plan changes as their main metric. Or, to give a hypothetical example, consider a health intervention aiming to make people buy more vegetables; when assessing the impact of this intervention, I would want to know whether people who end up buying more vegetables have reduced their expenses for grains or chocolate or clothing, whether they’ve taken out a loan to buy more vegetables etc. - And this concern is quite distinct from the concern that “donations to fund this intervention could also have been donated elsewhere”.
Hello, my response was about the counterfactual value of funds to REDD+ - i.e. what govts and the private sector would spend money on. It is analogous to a donation to FHI: Sanjay is proposing that we should discount money to REDD+ projects because part of the money would otherwise have gone to global development. In the same way, one could argue that money donated to FHI would otherwise have gone to global development and discount by that. This is in principle correct, but it tends not to be done.
Max_Daniel is on the nose about what we were trying to convey.
Let’s imagine another hypothetical example from global development:
imagine that the Fairly Good Charity is 50% as good as AMF
and imagine that Warm Fuzzy Fundraising encourages current AMF donors to donate to Fairly Good Charity instead of AMF
Would we consider Fairly Good Charity to have negative impact because the funds could have gone to AMF? Arguably we could do, but in practice we don’t.
What about a donation to support the operations of Warm Fuzzy Fundraising? I think this is a negative impact. (there’s a parallel with Max_Daniel’s vegetable example)
And coming back to climate change, if we thought that funds going to REDD+ were displacing higher-impact uses of the money, then CfRN too would have net negative impact.
I agree with that. My response is (1) to contextualise this by saying that this feature is true of almost all CEAs, (2) to say that I don’t think the counterfactual use of funds is very good in comparison to effective spending on deforestation prevention.