Let’s Fund researches pressing problems, like climate change, and then crowdfunds for nonprofits working on effective policy solutions. One such policy is clean energy innovation (e.g. via more grant funding for scientists to invent better solar panels).
Making clean energy cheaper has many benefits because it reduces:
Emissions
Energy poverty
Air pollution (which kills millions a year)
Revenue for autocratic petrostates[1]
Extreme climate risks (since if countries agreements to reduce emissions like Paris were to break down, cheaper clean energy hedges against this[2])
Since 2019, we’ve crowdfunded $1M for the Center for Clean Energy Innovation (CCEI) at ITIF, a non-profit think tank in DC. One example of our grantees work is researching the effects of higher and smarter clean energy R&D spending and communicating the results to policy-makers. Our research showed that this is the most effective climate policy[3] and was featured on Vox (which Bill Gates retweeted![4]).
As a result, ~2000 donors crowdfunded a $1M+ for CCEI to do more think tank work (e.g. do research, talk to policy-makers, etc.).
Here I show how with our grant, CCEI might have e.g. shifted >$100M from less effective clean energy deployment (e.g. subsidies) to more neglected and effective clean energy R&D. The donations might avert a ton CO₂ for less than $0.10.
That a leading think tank can cause such shifts becomes plausible, if we look at the pivotal (‘hingey’) timeline of a political climate so favorable that climate budgets went up by an unprecedented scale:
2020: Big Government Dems win the presidency, house and a razor-thin margin senate majority. Then a CCEI researcher gets a job advising Biden’s climate envoy, John Kerry, who had endorsed and blurbed CCEI’s Energizing America report and which has been called ‘a very influential report’, and advice for Biden on how to reform the energy innovation system.[5]
2021: COVID leads to a massive stimulus that includes ~$42B for clean energy RD&D, doubling the yearly budget- an ~$10B increase: [6]
This US leadership led 16 countries to pledge ~$100B for the Clean Energy Technologies Demonstration Challenge recently.
These increases were politically tractable thanks to tens of thousands of climate activists raising awareness worldwide. But CCEI is part of a much smaller coalition of only hundreds of key movers and shakers (others are: CATF, Carbon180, etc.[7]) that improved the quality of these spending increases by channeling them towards energy RD&D, which is ~10x more effective at ~$10/tC than deployment at ~$100/tC averted (more).
Also, our $1M grant was ~2% of donations to US climate governance and a respectable 0.2% to all US think tanks.[8],[9],[10] Based on this, if we assume CCEI caused ~.1-10%[11] of the $10B-100B clean energy RD&D increases—then, our Monte Carlo model (see UseCarlo.com) suggests that CCEI averts ~.5Gt at ~$.002/tC:[12]
| Distribution | p0 | p10 | p50 | p90 | UseCarlo.com output | Notes / Source | |
| Energy R&D budget increase | Metalog | $0K | $10B | $42B | $100B | ~50Gt | P10: US increases / y. P50: total stimulus. P90: global agreement |
| CCEI’s effect of shifting deploy$ to RD&D$ | Metalog | 0% | 0.1% | 2% | 10% | ~5% | Guesstimate: CCEI is part of the coalition of key movers and shakers that shifted budget increases to energy RD&D |
| RD&D effectiveness | Metalog | $0 | $3 | $13 | $41 | ~$20/tC | Review on the cost-effectiveness of energy R&D |
| Deployment effectiveness | Metalog | $0 | $0.1K | $0.5K | $1K | ~$500/tC | Levelized Cost of Carbon Abatement |
| tC averted via R&D shift | Output | ~0.5Gt | tC averted by R&D- Counterfactual tC averted by deployment | ||||
| Let’s Fund grant | ~$1M | ||||||
| CCEI effectiveness | ~$0.002/tC | ||||||
| Donor effectiveness | ~$0.02/tC |
Most of the impact is due to a grantee, but Let’s Fund donors might claim 10% credit of the grantee’s impact.[13] And so, donations had a cost-effectiveness ~$.02/tC (2¢) averted (≈ to Founders Pledge estimate of the Clean Air Taskforce’s effectiveness[14]).
Crucially, CCEI also improved the quality of energy R&D spending (e.g. they argued that we should spend more on neglected, hard-to-abate sectors like hydrogen or geothermal [more][15],[16]):
2022: the War in Ukraine, similar to the 70′s oil shock, caused even more spending on clean energy: the US passed the Inflation Reduction Act, the biggest piece of climate legislation ever, with $400B-800B (or $1.7T with a fiscal multiplier) in climate spending over the 10 years (mostly for infrastructure / deployment).[17],[18]
Short-term, the lower bound of $400B might avert ~4Gt of US emissions.[19] But what if the US were to spend ~$1T and we account for longterm effects and global spillovers of innovation? (cf. German subsidies used to drive ~⅓ of the global solar adoption, ~85% of which was abroad).[20],[21]
We guesstimate that the Inflation Reduction Act might avert 72Gt (≈1.5x of global yearly emissions). If CCEI’s work with our $1M grant increased deployment effectiveness by .1-1% that might be avert ~.1-1Gt for ~$.01/tC[22] (timeline).
Such guesstimates have flaws can push down the impact,[23] and we must not take them literally, but as just a soft lower bound of CCEI’s impact. Then again, CCEI’s work has many diffuse, hard-to-estimate and unmodeled benefits that increase its impact:
CCEI helped conceive the DoE’s new non-profit Foundation for Energy Security and Innovation.[24]
CCEI runs an Climate-Tech Policy Boot Camp for early career researchers
Finally, by donating bed nets or cash, you can save a life for less than $10k. Should we donate to global poverty instead of averting ~$1/tC? Crucially, this depends on the social cost of carbon, which a meta-analysis finds is ~$100/tC (range: –$400 +$600/tC),[25] though it might be >$4k/tC if we assume e.g. that money makes you exponentially less happy the richer you are, and so giving cash to the poorest, who are hit hardest by climate change, is ~100x better than to people in rich countries.[26],[27]
All these estimates have methodological problems.[28] [29] But, as a rule, cash is 2x as effective as any extra R&D[30] and targeted clean energy R&D to reduce energy poverty might be even more effective,[31] as poor people will soon rely on off-grid solar, with current sales at only $3B/year[32]—so reducing cost by 1% would save them $30M/year (but see[33]).
I’ll end with a simple BOTEC of what it takes to get to net zero: we emit ~50Gt / y. Multiply by ~$100—the average future cost per ton of carbon averted.[34] If at scale we can avert a ton for ~$100 on average[35]— then getting to net zero will cost ~$5T/y (~5% of world GDP). If you want to push this down, I recommend donating to Founders Pledge’s Climate Change Fund.
Further material
How We Think about Expected Impact in Climate Philanthropy | Founders Pledge
Talk on How EA can impactfully engage in climate-Johannes Ackva & Armond Cohen
Hear This Idea Podcast on Technological Change and How Solar Became Cheap
What ‘Think Global, Act Local’ Means for US Climate Philanthropists — EA Forum
IGM booth survey showing that economists agree that Government subsidies for investment in green technologies are justified by substantial benefits coming from reducing unpriced carbon emissions and generating positive R&D spillovers.[36]
Appendix
Main argument
Rich countries like the US and EU overemphasize reducing their own emissions. But soon, our emissions will be dwarfed by those from emerging economies, especially those from the ‘sleeping giants’ China and India—which, as they slowly awaken, will by 2040, produce 75% of all emissions. And so, only if our policies to reduce emissions globally, will we prevent climate change. Policies that stimulate innovation and lower the costs of clean energy tech are most effective as allow industrializing nations leapfrog the dirty growth stage. We examined 10 climate policies, and public clean energy R&D outperformed even carbon taxes. Global spending on public clean energy R&D was only $22B/year in 2017, just .02% of World GDP compared to the 6% we spend on energy. And so we spend 300x more than making energy cleaner and cheaper). To reach net zero, we must spend 7.5% until 2050, or ¼ quadrillion. Rich countries lower these massive costs by substantially increasing R&D even without international coordination, making it politically easier than implementing global carbon taxes, which are bottlenecked by high clean energy prices. Because of their long lag time, clean energy R&D should be heavily front-loaded to carbon taxes, which can be phased in gradually to minimize switching costs for industry. This argument has no bearing on 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. Think of clean energy R&D as planting seeds for a better future: if we plant them now, they can grow into a lush forest of new tech that provides clean, affordable energy for everyone later.
Ideally, rich countries should collaborate, allocating portions of their GDP to clean energy R&D. Several countries have signed the international ‘Mission Innovation’ agreement but struggle to fulfill their pledges. Contributing to this crowdfunder could encourage more spending on clean energy R&D, making clean energy cheaper and carbon taxes more politically viable. An extra $1M for R&D can lead to 1-2 energy science papers (e.g. DoE-funded MIT scientists recently published a breakthrough Nature paper on increasing solar output by 20%).
Detailed Timeline of policy influence
Jan-Jul ’20: CCEI had a range of typical think tank activities (see for a comprehensive list[37]). For instance, in May, CCEI published Mind the Gap: A Design for a New Energy Technology Commercialization Foundation[38] and More and Better: Building and Managing a Federal Energy Demonstration Project Portfolio.[39]
June ’20: House select committee on climate change cites several CCEI’s reports.[40]
Sep’ 20: CCEI publishes Energizing America: A Roadmap to Launch a National Energy Innovation Mission.[41] John Kerry endorsed it as ‘a plan to make the US the world leader in clean energy innovation and rise to an existential challenge — creating exciting new jobs along the way.’
Nov ’20: US Democrats win the presidency, the house, and a razor thin margin senate majority.
Dec ’20: The $2.3T Consolidated Appropriations Act includes the $35B Energy Act of 2020[42]
Jan ’21: CCEI Senior Fellow Sivaram moves into the Biden administration as senior advisor and managing director for clean energy and innovation for John Kerry, the US special presidential envoy for climate.
Feb ’21: CCEI staff testifies before the House Committee on Appropriations[43] and publishes Building Back Cleaner With Industrial Decarbonization Demonstration Projects.[44]
May ’21: CCEI’s Colin Cunliff moves to the Department of Energy.
Nov ’21: A historically large COVID stimulus, the Infrastructure Investment and Jobs Act, passes with ~$42B for clean energy RD&D (incl. ~$22B for clean energy demonstrations, $7B in the battery supply chain, $6.5B in carbon capture and removal, $3.3B in smart grids, energy security, and cybersecurity; and $420M in renewables). In 2022, the act added $9B to the regular clean energy R&D budget, bringing it to $17B. An example of a project: $20M to lower the costs of geothermal drilling.[45]
Feb ’22: Russia invading Ukraine led to more spending on clean energy, like the oil shock in the 70s.
June ’22: The US also pushes a new global initiative, the Clean Energy Technologies Demonstration Challenge, to get countries to spend $90B to develop and scale new clean technologies.[46]
Aug ’22: The Inflation Reduction Act passes with $391B for energy security and climate change. While most of this is for clean energy deployment, it also has significant innovation and RD&D components, like $5.8B for Office of Clean Energy Demonstrations, something that CCEI has advocated for.[47],[48] Moreover, CCEI was instrumental in developing the congressionally chartered nonprofit Foundation for Energy Security and Innovation that was included in the CHIPS act.[49]
Sep ’22: 16 countries pledge $94B for the Clean Energy Technologies Demonstration Challenge.[50] [51]
Founders Pledge Climate Fund has reported ‘massive climate policy wins in the US’[52] and argued in a similar vein, and, right after Biden won, deployed more than $1M to climate policy non-profits like the Clean Air Task Force, so they could optimally engage with the new administration: ‘[We used] the momentum to push for innovation in neglected technologies based on our analysis[53] of the special opportunity for climate impact under a Democratic President in a political environment with unusual willingness to spend boldly in the wake of COVID-19. [...] Although a final analysis of impact of those grants and our predictions is not yet possible due to ongoing legislation, our intermediate understanding is that these grants have been quite successful.’[54]
Our crowdfunder might have been as effective and climate philanthropists might not make such effective grants in the future.
Literature review on the cost-effectiveness of clean energy R&D
An expert survey modeled the benefits of increased clean energy RD&D and found benefit-cost ratios >5 with positive spillovers for both US private and foreign RD&D.[55] Direct Air Capture R&D’s was cost-effective at ~$5-41/tC averted.[56]
A CCEI report finds that doubling energy R&D spending is cost-effective at ~$3/tC averted.[57],[58]
A paper projects emission under different public clean energy R&D investment scenarios,[59] and increasing R&D budgets by $3T averts ~176Gt,[60] suggesting a effectiveness of $17/tC averted.[61]
Projections of US energy emissions show that increasing clean energy R&D budgets by ~$142B from business-as-usual averts ~11Gt ($13/tC averted).[62],[63]
Generally, solutions to social problems can differ ~30x in their effectiveness.[64]
Acknowledgments
We would like to thank the following organizations and people for helping Let’s Fund in various ways: Two anonymous EA donors, The Effective Altruism Meta-Fund, the Center for Effective Altruism, The Survival and Flourishing Fund, Jacob Hilton, Founders Pledge, Effektiv-Spenden.org, Rethink Charity: Forward, the Effective Altruism Foundation, Slate Star Codex, EA Giving Tuesday, Vox.com, Legacies Now, the founding team including Henry Stanley and Sahil Shah (see Lets-Fund.org/About), and everyone who has reviewed our research and donated to our crowdfunding campaigns.
References
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ClearPath, ThirdWay, Bipartisan Policy Center, National Wildlife Federation, World Resources Institute, Great Plains Institute, and C2ES as shown here.
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As per some EA Funds managers—see Comments on the EA forum
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For instance, in a recent Nature Energy editorial CCEI wrote ‘Energy efficiency, renewables, and nuclear power accounted for 64 percent of public energy RD&D spending in 202. These areas are relatively mature and target emissions sources where many solutions are well-advanced. By contrast, nascent technologies that are vital to mitigating emissions in hard-to-abate sectors remain underinvested. Hydrogen and fuel cells and CCS, for example, accounted for just eight percent of the 2020 total. Building energy technologies and industrial decarbonization are also relatively neglected.’
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For instance, the social value of offsets from uncertain projects with a .5% chance of failing or becoming non-additional in each year and a maximum duration of 50 years, have only 33% of the value of a riskless eternal project (permanent CO2 removal). See The Social Value of Offsets.
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The differences in spending are given as a percentage of Global World Product (the world’s ‘GDP’), which is ~$100T. In the ‘Advanced Tech’ scenario, ~.1% of GWP is spent on clean energy R&D, in the BAU ~.02%.
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Even if one is skeptical of the detailed numbers of a cost effectiveness analysis like this (as I am), I think it is nonetheless pretty clear that this 1M spent was a pretty great bet:
When I talked to ITIF in 2020, they were pretty clear how transformative the Let’s Funds campaign had been for their fundraising.
Given the amount of innovation-related decision making that occurred in the run-up to and early Biden administration—what became the IIJA, CHIPS, and IRA, probably the largest expansion of energy innovation activity in decades—significantly strengthening one of the most respected voices on energy innovation seemed clearly very good.
ITIF literally co-authored the most detailed blueprint for the Biden energy innovation agenda (Energizing America) and had clear ties into the White House so, conditional on them being funding-constrained (which they perceived themselves to be, see (1)) it seems hard to think there wasn’t a pretty useful way to spend this additional funding.
Even if one thinks ITIF shifted zero dollars towards innovation (from other areas), just marginally improving a single decision would quickly make this a great investment.
We have lots of evidence from other areas that this kind of philanthropy works and often has large impacts via legislative subsidy and other mechanisms.
2000 smallish donors would not have spent their money better otherwise given how most small climate donors allocate their funds (Big Green etc).
I think there’s a failure mode of looking at a cost-effectiveness model like this and rightly thinking—this is really crude and unbelievable! -- while, in this case, wrongly concluding that this wasn’t a great bet even though it is hard to put into a credible BOTEC.
Thanks for the analysis, Hauke! I strongly upvoted it.
The mean “CCEI’s effect of shifting deploy$ to RD&D$” of 5 % you used in UseCarlo is 12.5 (= 0.05/0.004) times the mean of 0.4 % respecting your Guesstimate model. Which one do you stand by? Since you say “CCEI is part of a much smaller coalition of only hundreds of key movers and shakers”, the smaller effect of 0.4 % (= 1⁄250) would be more appropriate assuming the same contribution for each member of such coalition.
I think you had better estimate the expected cost-effectiveness in t/$ instead of $/t:
The expected benefits in t are equal to the product between the cost and expected cost-effectiveness in t/$[1], not to the ratio between the cost and expected cost-effectiveness in $/t[2].
I appreciate the cost-effectiveness you present in your results table was correctly obtained with the 1st of the above methods. However, people could interpret it as referring to the mean cost per benefit, which would not be correct (since E(1/X) is not equal to 1/E(X)).
In your Guesstime model, you estimate the expected cost per benefit, which is not directly comparable to the expected benefit per cost that you calculated with UseCarlo.
The benefits can often be 0, thus resulting in numerical instabilities in the cost-effectiveness in $/t, although this does not apply to your case.
E(“benefits (t)”) = E(“cost ($)”*”cost-effectiveness (t/$)”) = “cost ($)”*E(“cost-effectiveness (t/$)”).
E(“benefits (t)”) = E(“cost ($)”/”cost-effectiveness ($/t)”) = “cost ($)”*E(1/”cost-effectiveness ($/t)”) != “cost ($)”/E(“cost-effectiveness ($/t)”).
Great comment—thanks so much!
Regarding CCEI’s effect of shifting deploy$ to RD&D$:
Yes, in the Guesstimate model the confidence intervals went from 0.1% to 1% lognormally distributed, with a mean of ~0.4%
With UseCarlo I used a metalog distribution with parameters 0%, 0.1%, 2%, 10%, resulting in a mean of ~5%
So you’re right, there is indeed about an order of magnitude difference between the two estimates:
This is mostly driven by my assigning some credence to the possibility that CCEI might have had as much as a 10% influence, which I wouldn’t rule out entirely.
However, the confidence intervals of the two estimates are overlapping.
I agree this is the weakest part of the analysis. As I highlighted, it’s a guesstimate motivated by the qualitative analysis that CCEI is part of the coalition of key movers and shakers that shifted budget increases to energy RD&D.
I think both estimates are roughly valid given the information available. Without further analysis, I don’t have enough precision to zero in on the most likely value.
I lost access to UseCarlo during the writeup and the after the analysis was delayed for quite some time (I had initially pitched it to FTX as an Impact NFT).
I just wanted to get the post out rather than delay further. With more resources, one could certainly dig deeper and make the analysis more rigorous and detailed. But I hope it provides a useful starting point for discussion and further research.
One could further nuance this analysis e.g. by calculating marginal effect of our $1M on US climate policy philanthropy at the current ~$55M level vs. what it’s now.
Thanks also for the astute observation about estimating expected cost-effectiveness in t/$ vs $/t. You raise excellent points and I agree it would be more elegant to estimate it as t/$ for the reasons you outlined.
I really appreciate you taking the time to engage substantively with the post.
Executive summary: Let’s Fund’s $1M crowdfunded grant to the Center for Clean Energy Innovation (CCEI) may have helped shift over $100M from less effective clean energy deployment to more effective clean energy R&D, potentially averting a ton of CO₂ for less than $0.10.
Key points:
CCEI is an influential think tank that researches and advocates for effective clean energy innovation policies.
Let’s Fund crowdfunded a $1M grant for CCEI, which was a significant portion of donations to US climate governance and think tanks.
CCEI’s work may have contributed to substantial increases in clean energy R&D budgets in the US and globally.
Estimates suggest the $1M grant could have helped avert ~0.5Gt of CO₂ at ~$0.002/tC, with donors’ cost-effectiveness at ~$0.02/tC. 5.EI’s work also improved the quality of energy R&D spending and had other diffuse, hard-to-estimate benefits.
the global poor may be more effective, targeted clean energy R&D to reduce energy poverty could also be highly impactful.
This comment was auto-generated by the EA Forum Team. Feel free to point out issues with this summary by replying to the comment, and contact us if you have feedback.
Pointing to white papers from think tanks that you fund isn’t a good evidentiary basis to support the claim of R&D’s cost effectiveness. As with most things, the details matter quite a bit. The R&D benefit for advanced nuclear since the 1970s has yielded a net increase in price for that technology. For renewables and efficiency, the gains were useful until about the early 00s. After that, all the technology gains came from scaling, not R&D. You can’t take economy wide estimates for energy R&D funding and apply them to a specific federal bill if the technology mix is quite different. And historic estimates are not necessarily indicative of future gains; we should expect diminishing returns.
Furthermore, most of the money in BIL and IRA were for demonstration projects—advanced nuclear, the hydrogen hubs, DAC credits. Notably NOT research and development. You make a subtle shift in your cost effectiveness table where you use unreviewed historic numbers on cost-effectiveness for research and development, and then apply that to the much larger demonstration and deployment dollars. Apples and oranges. The needs for low TRL tech are very different from high TRL tech.
Lastly, a Bill Gates retweet is not the humble brag you think it is. Bill has a terrible track record of success in energy ventures; he’s uninformed and impulsive. Saying Bill Gates likes your energy startup is like saying Jim Cramer likes your stock. Both indicate a money-making opportunity for those who do the opposite.
I cite a range of papers from the academia, government, and think tanks in the appendix. You don’t cite anything either those are just like… your opinions no?
Are you saying the more we invest in R&D the higher the costs? I agree that nuclear is getting more expensive on net but that can still mean that R&D will drive the price down.
What about the perovskite fever from the mid ’10s?
Also there’s a long lag with research.
I’ve simplified R&D to RD&D here, but I do cite RD&D projections—see and my calculation—do you think these numbers are off? What do you think they are? All models are wrong as they say.
That was a straightforward brag because he has millions of followers on X. I’m quite critical of Gates—I have blogged about this here. But also maybe we should give more credit to doing high-risk high reward stuff even if it doesn’t work out… like Solyndra?