Crowdfunding for Effective Climate Policy
I’m the co-founder of Lets-Fund.org. Let’s Fund is an effective altruism crowdfunding site, that helps people discover and fund high-impact research and policy projects.
We just launched a campaign to raise $2 million for the Clean Energy Innovation Program at the Information Technology and Innovation Foundation (ITIF), a top-ranked US think tank, to work on climate change policy.
The program is led by Professor David Hart and Dr. Colin Cunliff whose policy research focuses on the effectiveness of higher and smarter clean energy R&D spending and communicating this to policy-makers.
We have done hundreds of hours of research based on the principles of effective altruism and believe that this is the most effective way to donate to combat climate change. Why?
You can read our in-depth analysis at Lets-Fund.org/Clean-Energy, but briefly:
Advanced economies like the US and EU are prioritizing reducing their own emissions. But by 2040, 75% of all emissions will come from emerging economies such as China and India. Only if advanced economies’ climate policies reduce emissions in all countries will we prevent dangerous climate change. The best policies to do this are those that stimulate innovation and clean energy technology cheaper in all countries. We compared 10 climate policies that stimulate innovation (e.g. carbon taxes, deployment subsidies, cutting fossil fuel subsidies) and found that increasing government budgets for public clean energy research and development (R&D) is the most effective—even more effective than carbon taxes.
Public clean energy R&D is neglected: only $22 billion is spent per year globally compared to $140 billion spent on clean energy deployment subsidies and trillions spent on energy. Many advanced economies (e.g. U.S., EU) could unilaterally increase this substantially without international coordination—which makes this much more politically tractable than carbon taxes.
Better yet, advanced economies can coordinate spending parts of their GDP on clean energy R&D. Many countries have already done so by signing an international ‘Mission Innovation’ agreement, but are not on track to fulfill their pledges.
Donating to this campaign might lead countries to get back on track and increase clean energy R&D budgets.
This would make low-carbon energy cheaper, carbon taxes more politically acceptable, and might prevent dangerous climate change.
I’m happy to answer any questions about climate policy, the cost-effectiveness of ITIF’s clean energy program, or Let’s Fund in the comments below (you can also comment on the Google Doc that this campaign is based on for specific comments).
We have a mutual agreement of understanding with ITIF (see here) that any donations to ITIF through Let’s Fund will be restricted to their Clean Energy Innovation Program.
You can donate to this campaign via Facebook (zero fees, 100% of your donation goes directly to ITIF). I’d be grateful if you could then share your donation status update and encourage others to donate. Also, if you or someone you know have access to a platform, such as a big mailing list or someone with many followers on social media, please help us promote this campaign.
If you’d like to make a bigger donation or can get us in touch with people who you believe might want to donate a bigger amount, please email us at:
- Let’s Fund: Impact of our $1M crowdfunded grant to the Center for Clean Energy Innovation by (4 Apr 2024 12:11 UTC; 44 points)
- Review of Climate Cost-Effectiveness Analyses by (20 Oct 2019 20:39 UTC; 34 points)
- Latest EA Updates for May 2019 by (31 May 2019 16:36 UTC; 21 points)
- Let’s Fund: Impact of our $1M crowdfunded grant to the Center for Clean Energy Innovation by (LessWrong; 4 Apr 2024 16:28 UTC; 5 points)
This is really good! I’m glad to see such a transparent, well-designed writeup on the state of climate change and technology in 2019, and I especially liked the importance // neglectedness // tractability table. I was also surprised to see how little philanthropists currently spend in this area (especially given the large number of very wealthy people who are concerned about climate change).
A couple of parts that confused me:
This example doesn’t seem to have anything to do with “the potential for policy change”. Getting a grant and writing a book are both accomplishments, but what evidence is there to show that ITIF is unusually good at driving change? Is their being voted as the best think tank in their domain based on relevant researchers’ views on their success?
Also, on your Fermi estimate: The table presents numbers in the form “if $X in donations increases R&D spending by $Y, the benefit is $(Y—X).” I wish it also presented some estimate for the expected climate impact of increased R&D spending. That figure may be somewhere on the site, but I didn’t find it in a quick read-through, and it feels like we never get around to calculating an actual impact estimate that can be compared to the many other donation opportunities we have. Is spending $2 million to generate $50 million in R&D likely to produce more good for human life than buying 400,000 mosquito nets? Maybe yes, maybe not, but I’m not sure how to figure out the range of possible answers.
Thank you so much for your excellent comments—there seems to be a theme in there that captures something interesting about the way people in EA think.
>>This example doesn’t seem to have anything to do with “the potential for policy change”.
I see what you’re saying: my example is definitely not decisive evidence for a strong causal links between ITIF’s policy research and policy change. But I feel that saying that this example doesn’t have anything to do with the potential for policy change is a bit strong. Under Obama, if you wanted to get right people talking about an issue then publishing a book at MIT press and having it reviewed in the NYT seems like a good start. I have added a statement about that the book was launched at an event at the National Press Club with Financial Times Washington commentator Edward Luce.
But yes this was just one point, for instance, elsewhere in the report we write “The launch event for this report demonstrated that ITIF had good convening power, with high-profile panelists such as a former deputy head of the US Environmental Protection Agency.[44] “
And yes ITIF is a very well regarded think tank based on the top rankings on the global think tank rankings. Think tanks are generally meant to change policy and so a good ranking is likely to indicate this. This is more of a holistic argument (cluster thinking if you will).
Relatedly and re: your comment on the Fermi estimate:
In the report I write (I’ve made some minor changes now to make this more clear).
“What effect will the spending increases have on clean energy costs? Above we cited a meta-analysis of studies surveying experts suggesting that energy costs will decrease by several percentage points, if energy R&D is increased from a low to a medium or high investment scenario. The table below shows how many additional million dollars in clean energy R&D the low, medium and high investment scenarios correspond to. The amount of increase for some of the medium scenarios are roughly the same order of magnitude as benefits under realistic and optimistic assumptions in our cost-effectiveness analysis ($53 million and $750 million; see Table 2) and so this project could plausibly decrease low carbon energy costs significantly.
As mentioned above, because World Energy expenditure is in the trillions, [48],[49] even a small reduction in cost by several percentage point might lead to large savings. This cost-effectiveness analysis is roughly in line with a recent study which found that combining clean energy innovation with emission reduction policies reduces the costs of climate mitigation with a net present value of $3-6 trillion.[50]”
>>Is spending $2 million to generate $50 million in R&D likely to produce more good for human life than buying 400,000 mosquito nets? Maybe yes, maybe not, but I’m not sure how to figure out the range of possible answers.
One could multiply things out further if one feels inclined to, but the model uncertainty increases so much that it doesn’t allow for meaningful comparison with other causes.
This is more of a high risk, high reward donation opportunity than the low risk, low reward global development interventions whose benefits are more readily quantifiable and comparable. I think it’s definitely much better in expectation—I’d rather have a reasonable chance of lowering carbon electricity prices by a few percent than save 40 lives with 400,000 bednets.
I think we need to be careful of precision bias in EA and favouring ever more elaborate, explicit cost-effectiveness modelling of low risk easily quantifiable interventions while neglecting the more high risk “better approximately right than precisely wrong” kind of interventions.
I agree though that it’s hard to say whether this is better than funding say policy reform that would improve trade with emerging economies or biosecurity.
Yes, we should clearly aim to avoid precision bias. I don’t actually make donation decisions using comparisons of this kind—I just wanted to point out what I saw as a lack of clear “final benefit” description along the lines of “assuming a middling outcome, we’d expect to prevent roughly X tons of carbon/Y degrees of warning”.
But I wouldn’t be surprised if some figure like that was embedded in the report and I just couldn’t easily find it.
--
Also, it took me a while to find the section where the report explained potential reasons behind the (apparently) drastic undersupply of R&D funding: Here’s the explanation, which helped me get a better handle on why this cause has such high potential impact numbers behind it.
Have you spoken to Open Phil about this opportunity? Are you aware of any research they’ve done into R&D funding, or R&D policy grants they’ve made? It seems like this would fit under their “transformative basic science” or “global catastrophic risk” portfolios, and they’ve previously made at least one speculative grant with a small chance of sharply reducing emissions.
>>what I saw as a lack of clear “final benefit” description along the lines of “assuming a middling outcome, we’d expect to prevent”.
I think a thorough “final benefit” / “$ per ton of CO2 equivalent”/ “$ per degree of warming averted” calculation is not in principal outside of the realm of empirical investigation, but there are many difficulties here (e.g. the elasticity of clean energy demand, the comparative carbon intensities of other low carbon energy etc.). I might come back to that in case there is very strong demand for these numbers. But I also don’t think we need these calculations for the same reason that many high risks, high return grants lauded in the EA community do not need to include a “$ per life saved” calculation. I do have a bunch of what Bostrom calls crucial considerations in this report and I think EA research should head perhaps more in that direction.
But for what it’s worth we do mention the economic benefits of reducing global low carbon energy costs by several percentage points. They might be very large, because World Energy expenditure is in the trillions, [48],[49] and even a small reduction in cost by several percentage point might lead to large savings. Also there is a recent study which found that combining clean energy innovation with emission reduction policies reduces the costs of climate mitigation with a net present value of $3-6 trillion.[50]
Also, one economic model suggests that “if a carbon tax imposes a dollar of cost on the economy, induced innovation will end up reducing that cost to around 70 cents”.[73] Given that political acceptability is mainly a function of cost, making clean energy cheaper might make carbon taxes more likely. Just based only on this effect, it might make this a really good reason for donating to this, but again it’s hard to quantify the exact benefits.
>>Have you spoken to Open Phil about this opportunity?
I do not know OpenPhil’s official position on this, but there is a cell in “Open Philanthropy Project’s Public Priorities- Global Catastrophic Risks” spreadsheet which mentions that clean tech R&D might be a potential philanthropic opportunity. But the same spreadsheet also mentions says that Anthropogenic climate change (other than geoengineering) is not prioritized. I’ll definitely approach them though.
Just picking up on the importance, neglectedness, tractability table, Hauke, can I ask you to explain what you meant by those three terms (or, at least the last two) and how you see them as fitting together to give you an estimate of cost-effectiveness? I notice you did a fermi estimate too, so can you say what the relationship is between I, N, T and the fermi estimate? This isn’t a critical question—I’ve been thinking about cause prio a lot and I’ve realised it’s not clear to me how people use these concepts in their decision-making. Hence, if you could say a bit more that would helpful.
As suggestions:
is tractability: cost-effectiveness, resources requires to solve the problem, subjectively-perceived easiness, or something else?
Is neglectedness: resources going towards the problem? if so, how directly targeted at the problem did you have mind? Is it about counterfactual replacability? Something else?
Is the idea I, N, and T somehow give you an intuitive cost-effectiveness estimate and then you build the fermi estimate as an explicit follow up?
Sorry if this seems pedantic and I’m not engaging with the spirit of your post. The research looks very thorough and I’m glad you did it. As a non-expert on the subject matter I probably don’t have much of substance of add to that.
My understanding of these terms is roughly as follows:
Scale: general size of the problem. Determines the upper bound of what can be achieved. Determining the scale of a problem is quite arbitrary, because how do you draw the boundaries of ‘the problem’ and when is it completely solved?
Tractability: determines the average or global cost-effectiveness if you don’t know where you are on the curve (i.e. if you don’t know how much of the problem has been solved so far). Higher tractability means that the curve is steeper on average.
Neglectedness: determines the location on the curve and gets you the marginal or local cost-effectiveness. Because we expect the value curve to have diminishing returns, a good heuristic is ‘more neglected --> higher marginal value.’
I think where EA’s go repeatedly wrong with the application of the model is that tractability and neglectedness get confused: tractability should refer to solving the complete problem. If it refers to marginal tractability, then it double counts the neglectedness consideration. The report seems to do this:
Here, neglectedness is taken as a reason for tractability, while it should be a reason for marginal cost-effectiveness.
The SNT-model is also much more helpful for funding than for career choice, because neglectedness has linear implications for the value of extra funding, but more complex implications for an extra person doing work. Some skills are not very useful in the early stage of a cause area or problem, but become valuable only later. In general, I think personal fit is very important, and the SNT-model does not account for it.
I actually hope to write a longer post explaining all this in more detail, including some nice visual explanation I have of the SNT-model.
No sorry that’s incorrect. These are two separate points.
Clean energy R&D is neglected because only $22 billion globannually are invested—Norway could in theory triple this if they wanted to and it would have a very large effect on global emissions.
Carbon taxes are also neglected. But if Norway were to implement a carbon tax the effect on global emissions would be tiny.
Increasing public clean energy R&D does not necessarily require strong multilateralism or harmonized national policies. This makes it very tractable politically and uniquely positioned in the space of all climate policies as a decentralized approach.
Even if clean energy R&D spending would be relatively higher (say 100 billion), it might still be more tractable for a small country to increase it than to implementing carbon taxes.
Ah, I assumed the latter was a consequence of the former because they were in the same paragraph, my bad.
However, like Michael, I’m still a bit confused about the role neglectedness is playing in this analysis (and all other analyses). But don’t take that as criticism of your analysis. It often seems that neglectedness and tractability (and scale) are used as independent reasons to support a particular cause area or intervention, rather than that they are used as a coherent framework. It seems to me your argument would have been similarly strong if clean energy R&D was not neglected—if you could just show that additional spending would have big benefits.
I do not have a super strict definition of the ITN framework, but we are inspired by 80k’s ITN methodology. The arguments and findings from the ITN analysis, sometimes serve as inputs to the fermi estimate.
Tractability for instance we mention several times throughout the report:
“Public clean energy R&D is neglected: only $22 billion is spent per year globally. Many advanced economies such as the US could unilaterally increase this substantially i.e. even without international coordination—which makes this policy uniquely politically tractable. ”
“Increasing public clean energy R&D does not necessarily require strong multilateralism or harmonized national policies. This makes it very tractable politically and uniquely positioned in the space of all climate policies as a decentralized approach (see Figure 4).”
Or:
“Political tractability of carbon pricing approaches
Carbon pricing is becoming increasingly unpopular and politically difficult to implement.[173] One commentator writes that “the carbon tax’s fading appeal, even among groups that like it in principle, shows the difficulties of crafting a politically palatable solution to one of the world’s most urgent problems”.[174] It might be an even larger political challenge to increase the carbon tax to reflect the social cost of carbon (i.e. the true price of the externalities).[175] The political feasibility of a carbon tax is further decreased by the seemingly endless debates on how high it be should be (although it would make sense to set the carbon price to the marginal abatement cost, which is easier to estimate than the marginal social cost of carbon,[176] or use the lower bound of the social cost of carbon,[177] and/or simply err on the side of overestimating externalities, while reducing other non-Pigovian taxes).
On the positive side, carbon pricing might face less industry pushback and regulatory capture than many might assume: Major fossil fuel companies are advocating for carbon pricing.[178] This might be a case of ‘Bootleggers and Baptists,’[179] a phenomenon in which profit-driven corporations cause externalities (bootleggers) to align politically with socially motivated governments (baptists) trying to reduce externalities, as pushing for tighter regulation of their own industry (e.g. alcohol, carbon) gives them an advantage by making it harder for new competition to enter the market. On the other hand, the fossil fuel companies have invested over $1 billion on misleading climate-related branding and lobbying.[180]
In the appendix, we list two different ways of measuring national efforts to price carbon. The first is the country’s environmentally-related tax revenue as a percentage of GDP (e.g. gas taxes etc.). The second measure takes into account both carbon taxes and emission trading systems to calculate the effective carbon rate.”
“Cheaper clean energy technology might save the world a lot of money and might reduce both emissions and poverty. Many people also suggest that this would make a carbon tax more politically palatable.”
“Theoretically, a perfect global carbon pricing regime implemented early might have been the only policy needed to prevent climate change.[143] Leading economists agree that carbon taxes are a great policy intervention.[144] Increasingly, advanced economies do price or tax carbon emissions. A global carbon price would lead to lower emissions and incentivize the private market to build cleaner energy technology. Although there are proposals and increasing public support for a global carbon tax,[145] the biggest challenge still is that they do not seem politically palatable enough.[146] Some countries, such as Russia, derive a substantial part of their GDP from fossil fuels[147] and it might thus be in their interest not to adopt a carbon price.”
On neglectedness:
“Public clean energy R&D is neglected: only $22 billion is spent per year globally compared to $140 billion spent on clean energy deployment subsidies and trillions spent on energy.”
“But is public spending on clean energy R&D really neglected? Is it effective to spend more? We think so. Consider that, globally, only $22 billion in public funds are spent on clean energy R&D annually—this is only 0.02% of World GDP.[18] For comparison, world energy expenditure was 6% of the World’s GDP. This means we spend about 300 times as much on energy than on making energy better.
Why is there so little investment in clean energy innovation?
Generally, basic R&D is under-supplied at both the private and public level. There are several theoretical reasons for this:
On a global level, basic clean energy R&D is under-supplied by both governments and the private sector. Why? Because it suffers from the free-rider problem, as all basic R&D and public goods do. Countries and firms can just let others do the basic research and then reap the benefits because knowledge is hard to protect internationally. Private R&D cannot be protected perfectly because patents expire or industry know-how diffuses to other firms and not all rents from investments can be captured. This results in a socially suboptimal investment. In other words, additional public investment through basic R&D funding and subsidies increase social surplus, because private capital can only capture a fraction of the social surplus pie.
Generally, venture capital and the market neglect capital-intensive, high-risk, high-return, long time-horizon investments.
Clean energy R&D, in particular, is under-supplied because externalities of carbon are not priced adequately, leading to insufficient commercial applications for clean energy R&D.”
“First, generally, clean energy innovation is neglected by philanthropists. US philanthropists gave only $115,000 in grants to promote government clean energy R&D spending and only $20,000 to promote the role of government in fostering innovation annually on average from 2011-2015.[52] This suggests that there are likely still increasing returns to scale.”
“Climate change is relatively non-neglected
Climate change is a high-profile topic that many people work on. It is funded by both governments and big private foundations. Thus, even though clean energy innovation in particular has been relatively underfunded within the climate policy space, it is conceivable that in the future ITIF might receive grants for their clean energy innovation program from other funders, which lowers the counterfactual impact of donating to this project. In other words, comparatively, climate change is not very neglected. For instance, the risks and expected losses of pandemics are of a similar magnitude than those of climate change, yet the area is more neglected by other funders.[75]”
You might also be interested in the cell notes in this spreadsheet that give the very quick reason for all climate policies scores on the ITN framework.
Does that answer your question?
Great work Hauke! Love to see this sort of project supported with this sort of analysis! Some questions:
(1) Better understanding the relative rankings I would be interested to know: For “Research on climate change”, you say in your spreadsheet that neglectedness is only 2 because “Much research funding already in this area and returns are probably diminishing” Do we know how much? (or any other reason for thinking that returns are diminishing here but not in the clean energy arena?) For Regulation, why is importance smaller than it is for research on clean energy? (or research on climate change, for that matter?) For Regulation, why is tractability scored lower than governments funding research when regulation costs (roughly) no money? For Regulation, when I read section 8 of your document, I wasn’t sure how to interpret some of your comments. You pointed out ways that current approaches to regulation are sub-optimal. Does that mean you think there’s an opportunity to campaign for regulations to be done differently? It seemed to me like a write-up that was very positive about regulation.
(2) Can clean energy R&D actually benefit from more funding?
You said in your piece:
“According to recent analyses, public energy R&D can productively absorb large amounts of additional funding and should increase 5-fold to be socially optimal.”
The source for that says that the fivefold increase is based on “simple calculations”. I’ve copied and pasted that below (see PS), but it seems that this is based on raw economics. In other words, it assumes (if I understand correctly) equal tractability in each of the research areas. If so, it begs the question, to my mind.
I think resolving this for me could be done quite simply. It would be sufficient to have someone who is an expert researcher say something like: “Yes, if there were billions more dollars thrown into this field that would be great because we have loads of leads to follow and I could list out a load of them off the top of my head if you wanted me to” and not “To be honest, if we had loads more resource thrown at this, we would be scraping the barrel for useful things to research”
Alternatively, in your section on research on climate change, you say
“Funding more research on such topics might be even be more cost-effective than clean energy R&D funding. However, the overall funding gap is likely much lower (perhaps in the hundreds of millions) than for clean energy R&D (which is in the tens of billions) and so diminishing returns will set in earlier”—Perhaps expanding on the rationale for this claim might (perhaps) be sufficient to satisfy my question mark on this.
(3) A couple of other questions
I also had a look at this 2016 paper from Nature energy which you linked to: https://www.nature.com/articles/nenergy201620
That paper raised a couple of concerns which I don’t think were covered in your piece (sorry if they were there and I didn’t spot it)
- the discussion section suggests that the constraints for funding are likely to come from there being an adequate pool of scientist and engineering personnel available.
- it also raises the possibility of government funding crowding out private sector funding
PS Source of the 5-fold increase estimate:
http://jacquelynpless.com/wp-content/uploads/2016/08/Pless-et-al.-Inducing-and-Accelerating-Clean-Energy-Innovation-with-%E2%80%98Mission-Innovation%E2%80%99-and-Evidence-Based-Policy-Design.pdf
“Our own calculations based on 2016 net generation and average electricity price data from the U.S. Energy Information Administration indicate that these findings imply that U.S. government clean energy R&D spending should be about $5.2 billion, comprising $3.8 billion on wind/other R&D subsidies and $1.4 billion on solar R&D subsidies. By comparison, others have estimated that actual U.S. 5 government spending on renewable energy R&D in 2016 was only $1.0 billion (FSUNEP, 2017). If these numbers are correct, government support should increase by roughly five times current levels. This increase perhaps should occur gradually in order to avoid high adjustment costs, however recent evidence suggests that adjustment costs may not be a pressing concern considering current levels of public energy R&D support (Popp, 2016).”
This is an excellent question. I think there are some research projects on climate change which are plausibly more cost-effective than clean energy R&D.
Examples of high-impact climate research include: Research on the transient climate response, global scale flood forecasting systems, Research on the ethics and feasibility of global geoengineering, Research on the feasibility of using ocean alkalinity as a scalable and cheap way to absorb large amounts of carbon (for as little as $10 per tonne of CO₂ averted), Research on reducing emissions from unconventional sources, and Research on super-pollutants.
Funding more research on such topics might be even be more cost-effective than clean energy R&D funding. However, the overall funding gap is likely much lower (perhaps in the hundreds of millions) than for clean energy R&D (which is in the tens of billions) and so diminishing returns will set in earlier. Consider that, in the US alone, climate change research funding is 1.7% of total research grants and about $1.5 billion annually. Thus, while investing in climate change research is quite cost-effective, there is an upper bound on the benefits. Put simply, the engineering challenges of creating cheaper clean energy technology are vast and need many more billions, whereas the value of information from climate change research might be very high, but there diminishing returns set in earlier, and we already have a lot of funding in place. I hope this makes sense?
Great question.
Regulations such as these car or coal power plant bans are theoretically equivalent to a punitive carbon tax and might have positive spillovers for the world, yet they have drawbacks similar to the carbon pricing described in the report (e.g. carbon leakage). Put simply, if you ban carbon intensive energy in the UK (e.g. coal) industry might move abroad. This might also not stimulate energy innovation in the best areas (e.g. the UK might just rely more on old nuclear technology that won’t be used in emerging economies). In contrast, if you invest in basic clean energy R&D this might create the low carbon technology cheaper around the world.
Great question. For me tractability in this comparison is not about cost but political tractability that is a function of monetary costs. The great thing about clean energy R&D increases is that few people will object to it whereas with regulation often creates a lot of industry push-back. Put simply, my sense is that a politician would have a harder time shutting down 5 coal power plants than increasing the clean energy R&D budget by 50%.
In contrast to outright bans, future expected regulation and phase-ins have the benefit of guarding against abruptly high switching costs. Commitments to ban environmentally harmful technology in the future might be politically easier to push for than regulating the present and might seem like quick policy wins. Put simply, it is often easier for a politician to announce “By 2030 no diesel cars will be allowed any more in this country.”. But the effectiveness of future regulation is traded off with how credible commitments are against industry pressure on policy-makers when the time comes around to actually phase out environmentally harmful technology. I think in the past politicians have sometimes announced that this or that environmentally harmful technology should not exist anymore but then when the time came around there was renewed industry push-back and times were extended.
A 2018 meta-analysis summarized the results of several studies[25] that all asked several experts by how much clean energy prices if clean energy R&D were to increase by several billions. The meta-analysis concludes:
“[...] experts largely believe that increased public RD&D investments will result in reductions in future technology costs by 2030, although possibly with diminishing marginal returns. [....] for all technologies, experts see the possibility of breakthroughs that would make the technology cost competitive, envisioning sustained annual rates of cost reduction on the order of 10 percent per year. Moreover, such breakthroughs appear more likely under higher RD&D.”[26]
The results from these experts surveys: moving from low to medium or high R&D investment scenarios might decrease clean energy costs by several percent.
This view is shared by a number of academics, international organizations, and members of the private sector, including:
Daron Acemoglu, the most cited economic scholar in the recent decade, who argues that optimal climate change policy requires both carbon pricing and subsidies for clean energy research. Clean energy research should be heavily front-loaded to carbon taxation, which can be phased in gradually to minimize switching costs for industry.[19] This argument is not about how high carbon taxes should be in absolute terms or when exactly they should come. It merely suggests that we need to prioritize clean energy R&D, because it would not make much sense to create better clean energy technology later this century. In short, there is good reason to prioritize clean energy R&D.
The International Energy Agency notes that public R&D on energy technologies grew at an average rate of only 2% per year in the last 5 years.[20] For that reason, they argue that more spending on public and private clean energy R&D would be productive and is needed.[21]
The Breakthrough Energy Coalition,[22] a private sector coalition of billionaires led by Bill Gates, has started a venture to invest in breakthrough energy projects. According to recent analyses, public energy R&D can productively absorb large amounts of additional funding[23] and should increase 5-fold to be socially optimal. The US R&D budgets should even increase 10-fold.[24]
You can find all citations and the full report here: https://lets-fund.org/clean-energy
I guess this is a question about Talent constraints. My sense is that there are more talented scientists and engineers who currently work in the private sector that could be mobilized. Generally my sense is that ‘Idle talent’ can be mobilized quickly for science if research funding is available. For many years most researchers have trained more researchers (e.g., graduate students, postdoctoral researchers) than are needed to replace themselves, and so there is a pipeline of highly qualified young researchers who could be rapidly mobilized to take on extra work if there was more money in the system. Increasing salaries and working conditions might be another effect to get people from the private sector to do basic research —
As a rule, the less applied the science the less private sector funding there is, so I feel this should not be a concern here, because I’m arguing for basic clean energy R&D such as that done by government. There’s also a factor pushing in the other direction: the more basic R&D, the more private sector funding is crowded in later down the R&D pipeline.
Thanks very much for your replies.
Re research on climate change. Let’s assume that we’re at a stage where we’ll shortly be seeing diminishing marginal returns on this sort of research (as you claim) and that a small amount of extra research might be more valuable than a small amount of extra research of clean energy. Might that not (maybe) be a better thing to campaign for? E.g. if $1bn of climate change research outperforms $10bn of clean energy research (obviously these are made-up numbers) then campaigning for $1bn of extra government spend might be easier than campaigning for $1obn of extra spend.
Re regulation. I worry that your arguments are defeating a strawman of “campaigning for better regulation”. Regulation which pushes industry to move to another country is just poor execution—it’s an outcome which neither government nor industry nor climate activists want. If done well, regulation should stimulate *the private sector* to perform research (e.g. clean energy research) in order to attain the regulatory targets. E.g. the regulation might look like: “industry must attain certain standards of climate footprint/cleanliness by (say) 2035″, where the timelines/standards have been negotiated with industry and are at the ambitious end of what is attainable.
Yes, campaigning for more climate change research funding has the potential to have a higher benefit-cost ratio, but the benefit minus the cost might not be as high. I have some ideas on how to go about increasing that funding as well but I don’t think it’s very suitable for crowdfunding campaign. If anyone knows an ultra high net worth donor who would be interested in it please get in touch (hauke@lets-fund.org).
I don’t think there is a strawman here. I think you’re right that regulation can be done poorly and done very well. For instance, as I write in my report in contrast to outright bans, future expected regulation and phase-ins have the benefit of guarding against abruptly high switching costs. I also didn’t come down very hard on regulation and talk about it’s technology spillovers.
However, the basic economic fact remains that if you have two countries, one with regulation, one with less tight regulation, then, all else being equal, there is the potential for carbon leakage and that’s why many people worry about economic competitiveness.
Also, regulation has similar drawbacks to carbon taxes in that it doesn’t induce innovation which is the crucial consideration of this report.
I’m confused. If Government says, “You must do X” and X is currently very expensive, then companies will absolutely find innovative ways to do X.
They will first find a way to do X cheaper, and that can be innovation or producing elsewhere.
I write about the subtleties in a section on regulation in the appendix:
“Many countries use regulation to set environmental standards (e.g. for cars) or ban certain technologies completely (e.g. coal power).
Take non-electric car bans: France, the UK,[242] and even China and India[243] have all announced plans to ban sales of non-electric cars by 2040. More than ten countries have targets for electric vehicles in place.[244],[245]. Unfortunately, these initiatives are often not technology-neutral and exclude synthetic fuels, hydro-fuels, and biofuels, which can decarbonize transport. However, there are also legitimate arguments against technology-neutral policies.[246] For instance, they might incentivize only slightly greener technology that is more cost-effective in the short term (think: biofuels), but lock out emerging energy technologies that would be better in the long term (think: electric cars). Frontloading technology-specific policies may actually be more optimal.[247]
The benefits of regulation and setting emission standards can diffuse throughout the world. Due to pressure from advanced importing economies that have adopted stringent emission standards, emerging economies have more rapidly adopted these standards.[248] And this is not only so that they meet the requirements for export, as evidenced by the fact that some countries, such as China, now have emission standards even though local car manufacturers cannot compete in international markets.[249] Rather, emerging economies have adopted these emission standards because the technology is now cheap enough that, in the case of China, for instance, adoption makes sense to reduce heavy air pollution.[250] Thus, environmental regulation can be a successful strategy for international technology transfer, and more ambitious future non-electric car bans should be implemented. Moreover, many countries already have generous tax breaks for electric vehicles,[251] which could be expanded in tandem with bans.
It makes sense to regulate emissions standards for cars, for which the demand is probably relatively inelastic. To an extent, this might also be the case for residential electricity usage, which, unlike industrial electricity usage, does not suffer from carbon leakage. The global passenger car fleet causes around 9% of total global energy-related emissions;[252] innovating to make electric cars cheaper might therefore be a great global public good.
Another way for governments to stimulate clean energy innovation through regulation is banning certain technologies. Consider bans on coal power. More than 20 states have joined “Powering Past Coal Alliance”[253] to phase out coal power and signed a moratorium on any new traditional coal power stations without operational carbon capture and storage (incidentally, the International Energy Agency estimates that carbon capture and storage has been dramatically underinvested in, receiving only $1.2 billion in investment in 2016 (total low-carbon energy investments amounted to $850 billion). Admittedly, the signatories did not use much coal power in the first place.
Finally, the EU’s “Biofuel FlightPath Initiative” aims to replace 4% of current EU jet fuel consumption with biojet fuel derived from renewable sources by 2020.[254] Aviation causes about 5% (2%–14%, 90% likelihood range) of climate change.[255]
Regulations such as these bans are theoretically equivalent to a punitive carbon tax and might have positive spillovers for the world, yet they have drawbacks similar to the carbon pricing described above (e.g. carbon leakage). In contrast to outright bans, future expected regulation and phase-ins have the benefit of guarding against abruptly high switching costs. Commitments to ban environmentally harmful technology in the future might be politically easier to push for than regulating the present and might seem like quick policy wins. But the effectiveness of future regulation is traded off with how credible commitments are against industry pressure on policy-makers when the time comes around to actually phase out environmentally harmful technology.
Finally, in theory, elegant carbon pricing based on estimated externalities (here the social cost of carbon) is more welfare maximizing than crude bans or arbitrary environmental standard setting.”
all citations at: Lets-Fund.org/Clean-Energy
If regulators don’t think about the unintended consequences, then yes, I agree we risk unintended consequences. But surely the solution is to do regulation well?
With proper consultation with industry, regulation could induce innovation as Khorton suggested. With proper thought, it could set the right incentives and not encourage outcomes that are only marginally help. Indeed part of the point of lobbying should be to help governments see where they might go wrong and help them to get it right.
Re your comment:
“However, the basic economic fact remains that if you have two countries, one with regulation, one with less tight regulation, then, all else being equal, there is the potential for carbon leakage and that’s why many people worry about economic competitiveness. ”
A large company cannot move to a different jurisdiction at the drop of a hat. If the regulation is done well, with proper consultation, firms would rather work towards a regulation with a proper lead time than move countries.
I’m very much pro regulation and we rank it very highly in my comparison of climate policies :)
>> If regulators don’t think about the unintended consequences, then yes, I agree we risk unintended consequences. But surely the solution is to do regulation well?
>>With proper consultation with industry, regulation could induce innovation as Khorton suggested. With proper thought, it could set the right incentives and not encourage outcomes that are only marginally help. Indeed part of the point of lobbying should be to help governments see where they might go wrong and help them to get it right.
Yes, absolutely, this is an excellent point. However, I feel sometimes governments do not do regulation very well. Regulation is sometimes not set into in the future (and then sometimes when the time comes around there is industry push-back and the regulation is diluted), phasing in regulation to minimize switching costs is not done, making regulation ‘revenue neutral’ by reducing other non-Pigovian taxes does not often happen, making regulation technology neutral (see comment above).
>>A large company cannot move to a different jurisdiction at the drop of a hat. If the regulation is done well, with proper consultation, firms would rather work towards a regulation with a proper lead time than move countries.
Yes, you’re absolutely right—companies can’t move very easily and this point is frequently overstated. However, supply chains often can sometimes be switched more effortlessly and carbon leakage has been demonstrated empirically (I cite some studies on this). More crucially though, if you look at the carbon intensity of different economies:
https://en.wikipedia.org/wiki/List_of_countries_by_carbon_intensity
you see that advanced economies have already moved energy intensive industries abroad. Thus, regulation in our advanced economies will not create the right incentives that are optimal from a global perspective.
Your point about advanced economies having already moved energy intensive industries abroad was really interesting. I hadn’t thought about that. I wonder whether regulation that covers imports in advanced economies could be way to tackle that?
Yes, this is an intuition I had as well.
Carbon tariffs (or border carbon adjustments) might prevent some, but not all,[156] carbon leakage and reduce emissions. But they are quite difficult to calculate (calculating the carbon intensity of every imported good) and might lower trade flows and welfare, especially in emerging economies.[157]
Generally, I thought there was surprisingly little research on carbon tariffs, even though, as your intuition shows, they should go hand in hand with carbon taxes.
Crucially, even if we were to have perfect carbon taxes and tariffs, UK emissions only make up 3% and shrinking of the global total.
I’m strongly inclined to support this, but the abstract doesn’t say what the money would be spent on, or explain how this can lead to more spending on previously neglected R&D. Care to comment before I read the entire document?
Also, the very first graph says “CO2 emissions by region in the NPS”, but what’s the NPS?
Also, what is your relationship to the stated authors Hart & Cunliff [edit: I see they are not the authors, rather they are evaluated by the document], and how does Bill Gates fit in?
Mission Innovation is an international agreement under which many countries have coordinated to spend part of GDP on clean energy R&D. Unfortunately, signatory countries are currently not on track to fulfill their pledges. One of the focus areas of ITIF’s clean energy innovation program is the Mission Innovation agreement, the importance of which Hart has highlighted since the agreements inception in 2016.
Mission Innovation tries to solve the ‘free-rider problem’, i.e. countries not spending as much as others (relative to their GDP) on clean energy R&D. Because the agreement attempts to coordinate many countries to spend a non-trivial part of GDP on clean energy R&D, Mission Innovation provides great leverage.
This is a typical policy instrument and there are many precedents for spending part of GDP or GNI on global public goods to increase global cooperation on an issue. For instance:
NATO member states hold each other accountable to ramp up defense spending to 2% of GDP
OECD member states have committed to spending 0.7% of GNI on aid
EU member states spend around 0.7% of GNI to finance the EU budget
EU member states have agreed to spend 3% of GDP by 2020 (3.5% of GDP by 2025) on research and development
Though countries often fall short of their commitments, international agreements to spend part of GDP adds up to massive amounts. The international agreements to spend on global public goods might have also contributed to these issues being higher up on the policy agenda.
Recently Cunliff wrote a policy brief titled “Omission Innovation: The Missing Element in Most Countries’ Response to Climate Change”. There, Cunliff argues that “only significantly greater levels of public investment in clean energy research, development, and demonstration (RD&D) will produce the level of innovation necessary to dramatically reduce emissions from unabated fossil fuel consumption.” Cunliff highlights that countries are not on track to fulfill their Mission Innovation pledges and “If the member countries stay on their current feeble growth trajectory, [Mission Innovation] will reach only 50% of its target.” Another example of ITIF’s work on this is a recent op-ed by Hart in which he calls for the US to lead on international coordination of long-duration grid storage R&D.
We think the main mechanism of their impact will be high-quality, unbiased policy research on smarter spending on clean energy R&D. Communicating this research to policy-makers might then result in policy changes. We imagine this to happen through typical think tank outputs such as books, reports, policy briefs, blogs, conferences, workshops, commentaries, formal briefings and informal discussions with policy-makers, government officials, and key stakeholders.
ITIF could spend money productively by hiring staff such as policy researchers or assistants. In fact, ITIF has recently hired for another Senior Policy Analyst in Clean Energy Innovation to scale up, but seems to only have secured funding for one year so far. Hiring competent staff for several years can cost hundreds of thousands of dollars. The typical budget/staff ratio at the top 20 US think tanks is roughly $153,000—ITIF’s ratio is very similar at ~$152,000.
Conservative case: $500,000 over three years ($167,000/year), equivalent to the mean salary of 1 additional staff. Medium case: $1,500,000 over three years ($500,000/year), equivalent to the mean salary of 3 additional staff. Optimistic case: $2,000,000 over three years ($667,000/year), equivalent to the mean salary of 4 additional staff.
Note that the funds will be intentionally restricted only to the ITIF clean energy innovation program. However, within clean energy innovation Hart and Cunliff can use the money flexibly in whatever way they see fit. For instance, they might decide that it is better to spend funds on travel to give more talks or organize events and workshops on clean energy innovation.
Sorry this is International Energy Agency slang—I’ve added this to our website. NPS = New Policies Scenario. The NPS aims to provide a sense of where today’s policy ambitions seem likely to take the energy sector. It incorporates not just the policies and measures that governments around the world have already put in place, but also the likely effects of announced policies, including the Nationally Determined Contributions made for the Paris Agreement.
For this grant evaluation, we cold contacted ITIF, who we had no prior contact and so declare no competing interests.
The most important consideration is that their work focuses on the most effective policy: higher and smarter spending on clean energy R&D.
In other words, our search for a funding opportunity in climate change was very theoretically motivated: we first considered what the most effective policy area is, and only then looked for organizations with a focus on clean energy R&D policy. ITIF fit the bill perfectly.
I’ve added this to the website as well.
We use his explainer video because it’s very succinct and in our quotes section as an endorsement for our view:
““If we create the right environment for innovation, we can accelerate the pace of progress, develop and deploy new solutions, and eventually provide everyone with reliable, affordable energy that is carbon free. We can avoid the worst climate-change scenarios while also lifting people out of poverty, growing food more efficiently, and saving lives by reducing pollution.
To create this future we need to take several steps:
One step is to lay the foundation for innovation by drastically increasing government funding for research on clean energy solutions. Right now, the world spends only a few billion dollars a year on researching early-stage ideas for zero-carbon energy. It should be investing two or three times that much.
Why should governments fund basic research? For the same reason that companies tend not to: because it is a public good. The benefits to society are far greater than the amount that the inventor can capture.”
Bill Gates Philanthropist, Gates Foundation”
The Breakthrough Energy Coalition, a private sector coalition of billionaires led by Bill Gates, has started a venture to invest in breakthrough energy projects.
As far as I know they focus exclusively to get billionaires to invest directly in private energy companies.
The Gates foundation also does not make grants within climate policy, but focuses on US education and global development.
Thus Gates does not directly fund climate change policy research and this might be reason to think that this area is still neglected.
Generally, clean energy innovation is neglected by philanthropists. US philanthropists gave only $115,000 in grants to promote government clean energy R&D spending and only $20,000 to promote the role of government in fostering innovation annually on average from 2011-2015. This suggests that there are likely still increasing returns to scale.
Note: The word ‘unbiased’ sets off very loud alarm bells for me. I trust you, so I know you’re using it with good intentions, but if a stranger talked about investing in ‘unbiased research’ I’d think they’re either naïve or selling something. All research is biased.
Can you expand on this claim? Do you mean that all research has non-zero bias (but some could be very close to 0 bias), that all research has significant bias towards the hypothesis or framework it’s working in, or something else?
I mean that all research has significant bias based on the researcher’s beliefs and theoretical framework, especially in the social sciences. Some methodologies are more robust than others, and some researchers do a better job of being aware of and clear about their own point of view, but everyone makes choices about how to answer a research question which tend to change the answer you get.
I assume Hauke means something like “not funded by oil and gas,” but I read “completely objective and rational,” which I just don’t think is possible.
You’re absolutely correct that biases and beliefs often creep into many kinds of researchers.
I just meant to convey that ITIF is much more unbiased and non-partisan than one might expect and certainly more than many think tanks with a clear political leaning.
“Public clean energy R&D is neglected: only $22 billion is spent per year globally compared to $140 billion spent on clean energy deployment subsidies and trillions spent on energy.”
Just a note to say that spending money on R&D, developing a useful technology, and then not spending money to deploy it is a very silly idea :) We should probably not spend as much on R&D as we do on deployment, unless we’re driving deployment another way, eg through regulation.
Have you talked to anyone from government about their views on this?
The amount spent on deployment subsidies is drastically out of proportion to how much is spent on public R&D.[188] In Germany, one study critical of subsidies suggests up to $580 billion overall will be spent till 2020 on clean energy generally, while the German government projects to only spend ~$620 billion until 2050.[189] The majority of these billions will be spent on subsidies.
German solar subsidies dwarf public R&D funding by a factor of 120 (!),[190] when economic modelling has suggested that the optimal ratio should be roughly one-to-one.[191] [192]
Globally, clean energy deployment subsidies are around $140 billion annually.[193] compared to R&D.
I have talked to several people in government about this, but our views on the importance of clean energy innovation also seem uncontroversial within large parts of the academia, but have not made it outside of academia yet.
This view is shared by a number of academics, international organisations, and members of the private sector, including:
Daron Acemoglu, the most cited economic scholar in the recent decade, argues that optimal climate change policy requires both carbon pricing and subsidies for clean energy research.[202] He further argues that clean energy research should be heavily front-loaded to carbon taxation, which can be phased in gradually to minimize switching costs for industry. This argument has no bearing on the how high carbon taxes should be in absolute terms, nor how high clean energy R&D should be in the future, only that the latter should be prioritized. Put simply, it makes no sense to have most of our R&D spending later this century, but a high carbon tax can still be introduced at a later stage.
The International Energy Agency, which notes that because public R&D on energy technologies grew only at an average rate of only 2% per year in the last 5 years[203], there is need for more and that more spending on public and private clean energy R&D spending would be productive.[204]
The Breakthrough Energy Coalition,[205] a private sector coalition of billionaires led by Bill Gates, has started a venture to invest in breakthrough energy projects.
We came across a few recently published and unpublished papers that reached similar conclusions to ours and so we believe in the coming years our views might be more mainstream.[83],[84],[85]
All citations can be found at:
https://lets-fund.org/clean-energy/
I agree that clean energy innovation is important, I’m just uncertain about focusing significantly on basic research as opposed to taking new innovations to market and driving down the price. Might be better discussed in person.
Hey Hauke,
I think this statement is a great starting point:
However, there seems to be an assumption that when Western countries reduce their own emissions, those interventions can’t reduce emissions in developing countries as well.
That is the assumption I would challenge, if sustainable/climate interventions to reduce emissions are designed in an open-source fashion.
Consider The Thames Project. It began as a simple, community-led effort to clean up plastic from The Thames River.
A nice neighborhood initiative, but not very impactful on a global scale.
However, the project initiators compiled their knowledge and methodology in an open-source toolkit … and that enabled 10 more communities in 2 more countries to perform similar river cleanups.
So the original intervention did not only reduce pollution in the location of origin. It enabled further pollution reduction in international communities, presumably because of the intervention’s open-source design.
Now let’s think about this in the context of emissions reductions.
In the Netherlands, a group called Common Bike is building a decentralized micro-mobility platform, where anybody can put an electronic lock on their personal bike and activate it on a community bike-sharing network.
With so much of the population biking in the Netherlands already, this will have a negligible impact on their national emissions.
However, if this open-source biking platform was adopted in American suburbs, it could enable countless people to transition towards car-free lifestyles (especially if they are within biking distance of a local transit line), and significantly reduce transportation-sector GHG emissions.
And based on its open-source design, that same emissions-reducing intervention could freely spread to developing countries as well—and potentially shape their future transportation infrastructure to be car-free.
Thus, if an advanced economy invested in an open-source intervention like Common Bike, it seems that it could satisfy the requirement that “advanced economies’ climate policies must reduce emissions in all countries.”
As another example, consider the Beehive Biomimetic Cooler—zero-emission cooling technology made from Earthenware pots.
Project Drawdown has identified refrigerant management (the chemicals in our fridges and air conditioners) as our #1 priority for reducing carbon emissions.
With that in mind, it would be pragmatic for advanced economies to prioritize the development + deployment of minimal-emission cooling technologies like the Beehive.
And if they did so in an open-source fashion, the resulting emissions reductions from that investment would not be limited to their own countries.
By open-sourcing that innovation, the technology could likewise be replicated on the ground in developing countries, and drastically reduce their future emissions as well (potentially even enabling them to “leapfrog” over highly-pollutant refrigerants).
To wrap this up, my intention is not to compare the merits of deploying open-source sustainable innovations versus public clean energy R&D.
It’s simply to reason that if advanced economies pursue emissions reductions, those emissions reductions are not necessarily confined to the country of origin. And changing that starting assumption could change other aspects of the research.
With that said, there is one critical point that I didn’t see mentioned in the original piece.
Say that, starting today, we completely prioritized clean energy R&D for the next 1-2 years. And as a consequence, there will be no interventions to reduce carbon emissions during that timeframe.
What would be the long-term ramifications of total inaction on emissions reductions through 2020? For example—perhaps due to the acceleration of warming effects—is the window of opportunity from 2019-2020 more impactful for long-term emissions reductions than the window from 2021-2022 or from 2023-2024?
And if so, what are the chances that the clean energy capability we’d develop from 2019-2020 would drive greater long-term emissions reductions than if we focused on emissions reductions from 2019-2020?
Would love to hear people’s thoughts on that.
Finally, for some context, this comment and dialogue with Hauke was inspired by my work on an open-source climate change initiative called Time to Solve.
If anybody has feedback/questions/interest in that project, I am looking for collaborators, and it would be great to discuss it with the EA community.
Thanks for putting this together, and sorry for the delay in posting a response.
It’s great to see some more attention to effective climate interventions in the last year, starting with the founders pledge report:https://forum.effectivealtruism.org/posts/3poYR8mXfcr9YM34Z/new-research-on-effective-climate-charities
There is a lot of open debate in the EA community on how much to focus on climate change as a cause area:https://forum.effectivealtruism.org/posts/BwDAN9pGbmCYZGbgf/does-climate-change-deserve-more-attention-within-eaI’m going to skip over the questions of how much of a catastrophic risk it is, and what the appropriate split between mitigation and adaptation should be, and instead focus on the point you make of “What can we most effectively do to fight climate change?”.
In getting from the broad goal of emissions reductions to specifically support ITIF’s policy work, there are several key assumptions:
Energy related emissions from fossil fuels are the top priority
The priority should be on clean energy development in the most populous countries (India, China)
Reductions in energy related emissions are technology limited, rather than economic or policy limited; Adequate technologies do not already exist to in the most populous countries
Clean energy R&D can produce low or emissions-free technologies; there are substantial clean energy R&D opportunities with high impact on emissions reductions
Clean energy R&D is currently funding constrained, and there are high marginal returns for the next dollar to speed deployment of these technologies
The philanthropic sector, private/market sector, and governments have neglected clean energy R&D, or could substantially increase their giving in this area
Technologies developed in developed countries like the U.S. will lower costs and ease deployment in the most populous countries with negligible barriers to tech transfer
Lobbying to increase government R&D spending is likely to be successful, and specifically by ITIF
ITIF’s target R&D areas are broadly correct, and will surpass the challenges above
Responses to those assumptions:
Energy related emissions from fossil fuels are the top priority. Mild agreement. Agricultural, land use change, methane, and F-gas emissions account for ~25% of emissions, and there is substantial uncertainty how much is being emitted. There could be high impact interventions focusing on these emission sources. However, mitigation will certainly require eliminating emissions from fossil fuels.
The priority should be on clean energy development in the most populous countries (India, China). Agree.
Reductions in energy related emissions are technology limited, rather than economic or policy limited; Adequate technologies do not already exist to in the most populous countries. Mild disagreement here. I think this is true for the hard to mitigate emissions (https://science.sciencemag.org/content/360/6396/eaas9793) from Cement, Iron, Steel, Aviation, Shipping, and the last ~10% of electric generation when 90% is served by renewables. These account for ~15% of total energy related emissions. Otherwise, the technologies exist are largely driven by policy. 75% of electricity use is in buildings, and we already have the technology to make them low or zero-carbon. It’s a matter of adopting rigorous building energy code. Electric vehicles are in the deployment stage, relying on infrastructure build out to support their manufacture and charging availability. Better batteries would help, and this is getting a lot of R&D interest from all sectors. Lastly, urban planning is largely the biggest lever in reducing developing country emissions, as they can design out the need for high transportation energy use. However, the ITIF fund is explicitly targeting the ~15% hard to eliminate emissions, so they are only focusing on the technology-limited emissions.
Additionally, I think the choice to use the German example of clean energy subsidies is unrepresentative. In the U.S., which is responsible for 35% of clean energy R&D, the ratio is much closer https://www.eia.gov/todayinenergy/detail.php?id=35952 to 1:1 (post-ARRA). And while the subsidies in Germany didn’t go to R&D, they encouraged learning in manufacturing and production, which greatly drove down the price. While this isn’t included as R&D, it has a similar effect of making renewable energy cheaper.
Clean energy R&D can produce low or emissions-free technologies; there are substantial clean energy R&D opportunities with high impact on emissions reductions. Agree. Largely with batteries and liquid fuels.
Clean energy R&D is currently funding constrained, and there are high marginal returns for the next dollar to speed deployment of these technologies. Mild agreement. This is true for zero-carbon liquid fuels. New battery technologies are not funding constrained, and at a point where additional funding will not lead to faster development.
The philanthropic sector, private/market sector, and governments have neglected clean energy R&D, or could substantially increase their giving in this area. Mild agreement, though I disagree with the characterization that the philanthropic sector has neglected developing countries. In the philanthropic sector, the Packard and Hewlett foundations are the main funders in this space, and have made major contributions to the Energy and Climate foundations, who in turn have focused their grants on developing country emissions, largely around things the building code, vehicle electrification, and development policy. If the criticism is that the philanthropic sector is under investment in R&D, it is largely because they think policy priorities in developing countries are a more impactful mitigation strategy.
Technologies developed in developed countries like the U.S. will lower costs and ease deployment in the most populous countries with negligible barriers to tech transfer. Agree. This has been demonstrated with solar and wind, though I would have appreciated more in the write-up on tech transfer.
Lobbying to increase government R&D spending is likely to be successful, and specifically by ITIF. Neither agree nor disagree. I have no way to judge how successful ITIF will be with their lobbying. While they are well regarding, I’m not sure how much political power they have.
ITIF’s target R&D areas are broadly correct, and will surpass the challenges above. Mix of agreement and disagreement. There are 6 areas:
1) Advanced Nuclear Energy, particularly on SMRs (small modular reactors). The application here is for the last 10-20% of electricity generation that is hard to cover with renewables. However, ~80% of the costs of rankine-based technologies for power production are from the capital and maintenance costs associated with the rankine cycle (cooling towers, concrete, etc.). SMRs, even small ones on the 50 MW scale, even if their nuclear component is vastly cheaper than LWRs, are unlikely to be able to compete with renewables and storage on cost. There are other means of meeting this grid need with demand response or transmission, meaning SMRs will likely only find use in certain applications like shipping. Therefore, I don’t think greater funding in this area is climate-relevant.
2) Long Duration Grid Storage, seasonal storage. This is also for the last 10-20% of grid use. I agree this could use more funding, though it is speculative and technology specific.
3) Carbon-Neutral Fuels. This is the strongest R&D need. There are some recent big investments in the space https://www.energy.gov/articles/doe-national-labs-partner-exxonmobil-100-million-joint-research, but it could get more attention.
4) Carbon Capture, Utilization, and Storage (CCUS). CCUS is not competitive in the electric sector. The application will be for the industrial sector in cement and steel manufacturing, and for low-carbon liquid fuels. I think the investment needed here is less on the capture technology, and more on the robustness of sequestration and storage to prevent leaks https://www.nature.com/articles/s41467-018-04423-1.
5) Carbon Dioxide Removal Technology. I agree with this as a government research priority as there isn’t a market incentive.
6) Basic Energy Research. Basic energy research requires government investment, and gets a lot of the R&D share. It’s unclear to me what lobbying for this would entail. The current administration is more inclined to basic energy research at the expense of all other areas of energy and climate, so lobbying for this in the next few years may actually be counterproductive.
Overall, I think ITIF is broadly correct in the need for government-funded R&D in carbon-neutral liquid fuels, CCUS in industry, CO2 removal, and somewhat long-duration storage. I disagree with their Advanced Nuclear and Basic Energy research goals for practical and current political reality reasons. I don’t think ITF’s lobbying on their 6 focus areas rise to the level of “most effective climate interventions”, as ~60-70% of emissions are policy-limited, not technology-limited. And I think the U.S. climate philanthropic sector has largely correctly identified policy interventions in India and China as the highest priority. From an EA angle, I think the most neglected climate-interventions are in adaptation in poor countries that are most vulnerable to climate change, and in understanding and adaptation to extreme warming scenarios.
Thanks so much, Matthew for your detailed response. I will just briefly respond to a few points of disagreements.
The US is the biggest funder of clean energy R&D, so yes the ratio is definitely better. However, globally clean energy deployment subsidies are >$120 billion whereas clean energy R&D is just $22bn.
I also disagree with your distinction between “technology” vs. “economic or policy limitation”. Policy tractability is a function technology. As clean energy gets cheaper it will get adapted more readily.
ITIF’s target R&D areas are broadly correct, and will surpass the challenges above. Mix of agreement and disagreement.
Note that recommendation of ITIF does not hinge on their technology missions. While you might have disagreements on the particular technology missions they propose, they too are experts on this topic, and there are many more experts that agree with them. We mostly believe that most of the value from this comes from encouraging all countries to increase their energy R&D through Mission Innovation. Generally, increasing in spending will lead to increases in the clean energy that the technocratic consensus deems most effective.
In the report we write (citations available there):
“Our analysis focused exclusively on the climate policy solutions that are most effective. This seemed to be our competitive advantage. We saved time by not analyzing in-depth the impacts of climate change (we had done a shallow literature review on this in a previous analysis ,). Instead, we relied on the scientific consensus on this topic. Also, unlike other analyses, we did not compare the effectiveness of different energy sources. For instance, is nuclear really good and its drawbacks are overstated? Are renewables like solar underestimated? Can coal perhaps be made clean through carbon capture? We intentionally steered clear of these controversies and have not engaged with these questions on a deep level. There seems to be no expert consensus on whether any one technology is much superior and unreasonably neglected than others. Instead, we feel there is some mild consensus amongst energy experts that the world’s future energy supply must come from a diverse mix of energy sources and it is best to opt for ‘technology neutrality’, i.e. being agnostic with regards to which low-carbon technology is best. We assumed that clean energy R&D budget increases will either lead to all technologies becoming better across the board or one technology will emerge more readily as the ‘winner’.
Relatedly, our views on the importance of clean energy innovation also seem uncontroversial within large parts of academia, but have not made it outside of academia yet. We came across a few recently published and unpublished papers that reached similar conclusions to ours and so we believe in the coming years our views might be more mainstream.,”
On adaptation: I disagree that adaptation is more effective than what I outline in my report, as it is not a global public good. On the understanding to extreme warming scnearios I actually agree a bit, above I write:
Funding more research on such topics might be even be more cost-effective than clean energy R&D funding. However, the overall funding gap is likely much lower (perhaps in the hundreds of millions) than for clean energy R&D (which is in the tens of billions) and so diminishing returns will set in earlier. Consider that, in the US alone, climate change research funding is 1.7% of total research grants and about $1.5 billion annually. Thus, while investing in climate change research is quite cost-effective, there is an upper bound on the benefits. Put simply, the engineering challenges of creating cheaper clean energy technology are vast and need many more billions, whereas the value of information from climate change research might be very high, but there diminishing returns set in earlier, and we already have a lot of funding in place. “
I distinguish between R&D and economic/policy factors, because it matters where technology is at in the R&D pipeline. Solar and wind are mature technologies. There is some additional work that can be done in solar (e.g. perovskites) and wind (bigger blades, offshore), but the vast majority of the costs at this point are not associated with the technology itself, but rather the implementation, permitting, financing, etc. At this stage in technology development, costs get driven down by expanding the market, not so much additional early stage R&D. There can be more investment in >6 hr energy storage and zero-carbon liquid fuels, as many of the solutions are in early stage research.
Therefore, I’m more inclined to say that clean energy deployment in developing countries is economic and policy limited, not technology limited, given relatively low deployment rates and maturity of the most applicable technologies. I still agree with more R&D, but I don’t think that is limiting factor in a lot of countries right now. Major climate philanthropy seems to agree—focusing on policy around development, energy efficiency, and deployment of exist tech, rather than early stage R&D funding. Perhaps they don’t because the government already funds R&D at level greater than the philanthropic sector could ever meet. But if as you say, the R&D is more funding limited and has the better marginal return, then most of the philanthropic giving should be going to that.
I understand the desire to not dive into the specifics which technologies to focus on and in general just get more clean energy R&D funding. More clean energy R&D funding lifts all technologies. An analogy would be to global health. It would be good to get more general funding into global health, and most academics and EAs support that. But I think the EA angle could benefit from being more specific on which kinds of interventions/technologies, as like global health, the effectiveness of additional funds could vary greatly depending on where they are spent (e.g. energy storage vs. clean coal). This is a increase funding or use existing funding more effectively question. Your argument is that Clean Energy R&D funding is so low that it is much more important to increase the funding. I agree with you on this. I have a mix of thoughts on whether ITIF’s specific lobbying priorities within Clean R&D are correct, but don’t want to get into that too much.
I do want to address the points on adaptation and extreme warming.
Adaptation gets funded through the UNFCCC framework is the fund has given out $1 billion, with support of $4 billion from other sources. This is total, not per year.
https://www.un.org/ldcportal/least-developed-countries-fund-ldcf/
https://fiftrustee.worldbank.org/en/about/unit/dfi/fiftrustee/fund-detail/adapt
I think R&D in adaptation is underfunded, and adaptation in one area is likely to be replicable in other places (making it a global public good, similar to clean energy R&D). This is about limiting the worst effects, and is neglected in the same way tropical diseases are neglected on the global scale.
An analogy on this is a expansion of pond metaphor. The water level is representing greenhouse gas levels in the atmosphere, and the pond is filled with adults (developed countries) and small adults or kids (developing countries). Some are already struggling. Mitigation will slow or stop the rise of water, but we should also spend some effort helping the smallest humans out before they can’t touch the bottom (e.g. life preservers, rocks to stand on). We can presumably get better at figuring out ways to do mitigation (Clean Energy R&D) and adaptation (helping people in the pond to not drown). Right now, I think helping the smaller people is more neglected than lessening the rise of water level.
Lastly to the comments on extreme warming scenarios. While there is a lot of research improving climate models and projections (largely computation limited), there is still a lot to be done on translating those extreme scenarios to impacts, and also geoengineering responses to lessen those impacts. This needs funding on the ~$1 billion scale and is vastly underfunded (funding got cancelled in the US given the current administration). I’m more inclined to think that this or adaptation are likely to yield better returns from an EA perspective.