Hmm, Iām kind of skeptical. Suppose thereās a group working on eliminating plastic straws. Thereās some value in doing that, but suppose that just the existence of the group takes attention away from more effective environmental interventions to the point that it does more harm than good regardless of what (positive) price you can buy its impact for. Would a market ensure that group gets no funding and does no work? Would you need to allow negative prices? Maybe within a market of eliminating plastic waste, they would go out of business since there are much more cost-effective approaches, but maybe eliminating plastic waste in general is a distraction from climate change, so that whole market shouldnāt exist.
So you might get VCs who become expert in judging when early-stage projects are a good bet. Then people thinking of starting projects can somewhat outsource the question to the VCs by asking ācould we get funding for this?ā
It sounds like VCs would need to make these funding diversion externality judgements themselves, or it would be better if they could do them well.
Yeah, I totally agree that if youāre much more sophisticated than your (potential) donors you want to do this kind of analysis. I donāt think that applies in the case of what I was gesturing at with ā~community projectsā, which is where I was making the case for implicit impact markets.
Assuming that the buyers in the market are sophisticated:
in the straws case, they might say āweāll pay $6 for this outputā and the straw org might think ā$6 is nowhere close to covering our operating costs of $82,000ā and close down
I think too much work is being done by your assumption that the cost effectiveness canāt be increased. In an ideal world, the market could create competition which drives both orgs to look for efficiency improvements
Iām guessing 2 is in response to the example I removed from my comment, roughly starting a new equally cost-effective org working on the same thing as another org would be pointless and create waste. I agree that there could be efficiency improvements, but now weāre asking how much and if that justifies the co-foundersā opportunity costs and other costs. The impact of the charity now comes from a possibly only marginal increase in cost-effectiveness. Thatās a completely different and much harder analysis. Iām also more skeptical of the gains in cases where EA charities are already involved, since they are already aiming to maximize cost-effectiveness.
Hmm, Iām kind of skeptical. Suppose thereās a group working on eliminating plastic straws. Thereās some value in doing that, but suppose that just the existence of the group takes attention away from more effective environmental interventions to the point that it does more harm than good regardless of what (positive) price you can buy its impact for. Would a market ensure that group gets no funding and does no work? Would you need to allow negative prices? Maybe within a market of eliminating plastic waste, they would go out of business since there are much more cost-effective approaches, but maybe eliminating plastic waste in general is a distraction from climate change, so that whole market shouldnāt exist.
It sounds like VCs would need to make these funding diversion externality judgements themselves, or it would be better if they could do them well.
Yeah, I totally agree that if youāre much more sophisticated than your (potential) donors you want to do this kind of analysis. I donāt think that applies in the case of what I was gesturing at with ā~community projectsā, which is where I was making the case for implicit impact markets.
Assuming that the buyers in the market are sophisticated:
in the straws case, they might say āweāll pay $6 for this outputā and the straw org might think ā$6 is nowhere close to covering our operating costs of $82,000ā and close down
I think too much work is being done by your assumption that the cost effectiveness canāt be increased. In an ideal world, the market could create competition which drives both orgs to look for efficiency improvements
Iām guessing 2 is in response to the example I removed from my comment, roughly starting a new equally cost-effective org working on the same thing as another org would be pointless and create waste. I agree that there could be efficiency improvements, but now weāre asking how much and if that justifies the co-foundersā opportunity costs and other costs. The impact of the charity now comes from a possibly only marginal increase in cost-effectiveness. Thatās a completely different and much harder analysis. Iām also more skeptical of the gains in cases where EA charities are already involved, since they are already aiming to maximize cost-effectiveness.