I think your post raises two points: (1) There are a lot of moral dimensions, and we need to grapple with that somehow if we want to project them onto a single price dimension, and (2) the name “impact certificate” may be confusing.
I’ll be happy with whatever name people find most intuitive, and we’ve been doing okay as a species despite confusing names such as “koala bear” (not a bear) or “wombat” (not a bat). So I’ll ignore 2.
But 1 is crucially important in my opinion. The failure mode is the following: A charity offers universal basic meat deliveries to all households in Country. They’re funded mostly from people who speculate on their impact certificates (one per batch of national deliveries), and have even sold some to retroactive funders already. The valuation is enormous. They can scale up the amount of meat they can deliver.
But that is just because the nonhuman animal suffering is not priced in. The animals don’t participate in the market, and if they could, they wouldn’t be able to profit off any short positions as much as the humans can profit off their longs (esp. after adjusting for the liquidation risk).
I see two big categories of responses to this: (1) force people to put collateral at stake when buying any (including long) positions in the market or (2) commit everyone to norms for the valuation of impact that make moral defection like that unattractive for issuers and speculators.
I think your post raises two points: (1) There are a lot of moral dimensions, and we need to grapple with that somehow if we want to project them onto a single price dimension, and (2) the name “impact certificate” may be confusing.
I’ll be happy with whatever name people find most intuitive, and we’ve been doing okay as a species despite confusing names such as “koala bear” (not a bear) or “wombat” (not a bat). So I’ll ignore 2.
But 1 is crucially important in my opinion. The failure mode is the following: A charity offers universal basic meat deliveries to all households in Country. They’re funded mostly from people who speculate on their impact certificates (one per batch of national deliveries), and have even sold some to retroactive funders already. The valuation is enormous. They can scale up the amount of meat they can deliver.
But that is just because the nonhuman animal suffering is not priced in. The animals don’t participate in the market, and if they could, they wouldn’t be able to profit off any short positions as much as the humans can profit off their longs (esp. after adjusting for the liquidation risk).
I see two big categories of responses to this: (1) force people to put collateral at stake when buying any (including long) positions in the market or (2) commit everyone to norms for the valuation of impact that make moral defection like that unattractive for issuers and speculators.
I don’t have much hope for the first because the amounts of collateral would have to be enormous. But in this section of a big draft of a future EA Forum article I propose a definition that I hope will have the right self-reinforcing feedback loops built in that it can become a Schelling point for how impact is valued on an impact market – especially once the biggest retroactive funders adopt it. I also explain it in this recent talk at the Funding the Commons II conference.
I think this is a really big deal, so I’d be delighted if anyone wants to red-team my proposed solution!