I’m also very excited about this idea. The format of the ultimate judgement (i.e. the retrospective evaluation) seems important. A straightforward survey of the population suffers from the problem that teasing out an answer about the quality of a policy is hard, and most people won’t have put the time or effort in (even assuming they don’t have a hidden agenda, as John_Maxwell_IV highlights). But a survey of experts has its own problems too.
That said, I suspect these issues are surmountable, and would be keen to see this idea turn into action.
David Moss and I recently conducted a study with about 500 participants looking at the extent to which people place moral weight on the far future.
The study found that older people give much less moral weight to the future.
The study included the following questions:
Is it better to save (A) 1 person now or (B) 1/2/1,000/1,000,000 people 500 years from now? (This is 4 different questions, one after the other, with differing numbers of people stated in option (B))
How far do you disagree or agree (on a 7-point scale) that:
“Future generations of people, who have not been born yet, are equal in moral importance to people who are already alive”
“We should morally prioritise helping people who are in need now, relative to those who have yet to be born”
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?
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.
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.
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/nenergy201620That 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 fundingPS 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).”
Thanks Aaron, I have removed the written out text of the table. Expanding them was useful, thank you for doing that.
Forum owners may be interested to know that I had assumed that clicking the corner of the image and dragging to expand would be possible, but after many many attempts I gave up.
In your piece you said “John Halstead <...> argues that more emissions and warming might create destabilisation and nuclear war, but it’s hard to see exactly how.”
In case it helps, this Economist article may add some more colour on this: https://www.economist.com/international/2019/05/25/how-climate-change-can-fuel-wars
You may also be interested to see the thread about this on the EA facebook group: https://www.facebook.com/groups/effective.altruists/permalink/2209495562440122/
Thank you for thinking about how you can use your insurance background to make the world a better place, and thanks for sharing your thoughts.
I have c 15ish years’ experience in the insurance arena, having worked as an insurance actuary, financial (ratings) analyst specialising in insurance, and a strategy consultant for the insurance space. I’ve also been on the board of several (>5) charities in the UK and consulted for ~10 more charities globally.
I’ll give some opinions about
What can you do to maximise impact through your work
Long-term business prospects for an insurance brokerage firm
How should you position your firm to maximise success
About structuring as a non-profit
First comment – you didn’t state your location, but I’m assuming you’re in the US.
You mentioned helping seniors navigate medicare. This is no doubt a good outcome, however I expect that focusing on wealth management and encouraging clients to donate more is likely to be higher impact, taking into account replaceability. As a quick calc, assume you have $10million of assets under administration (not an aggressive target for an established adviser); if you can get 1% of that to be donated per annum that otherwise wouldn’t have been, that could easily outperform your donations (unless you’re particularly profitable/frugal)
Note that financial advisers are currently short on tools to help them make more effective donations. My organisation SoGive is working on this in the UK, and Agora was doing this in the US (although I think they no longer are)
Long-term business prospects for insurance brokerage firms
Financial advisers in the UK and several other European countries is have often (until a few years ago) had a fairly low-stress, moderately high-income life. Which suggests that you might be onto something.
Some argue that this is because insurance providers paid them loads of commission, and this was only possible because commission is not transparent
Several European regulators, led by the UK, introduced new rules which banned commission (UK Retail Distribution Review 2012), introduced penal new training requirements, and broadly made a financial adviser’s business more regulation-heavy and painful. I don’t know how likely this is to happen in the US, but American regulators will certainly be aware of it.
The insurance intermediary sector is also at risk from disintermediation (especially if the commission payments are made more transparent) Having said that, your comment about a well-run online platform suggests that maybe you may be interested in actually *being* one of the disruptors, in which case you would stand to benefit from this risk. If you are going down this route, I don’t anticipate that it will be the easy life that some brokers have had.
For a vanilla financial advice service, I am sceptical about the value of advertising the non-profit nature of your business. It risks creating confusion about the positioning of your service
However, if you provided financial advice covering ethical investments, structuring your business as some kind of non-profit may have some brand value. Even then I’m doubtful.
Note that “some sort of non-profit” includes options which are much cheaper/easier than a full-blown 501(c)(3), see below for more
Offering ethical investment advice could also (maybe) make sense from an impact perspective; if you advertise yourself as offering ethical investment advice, you could, as part of the advice, explain why donating is likely to outperform (i.e. because of counterfactuals).
If you are focusing on providing investment advice, I would encourage you to position yourself as a “holistic” adviser or “financial planner”, or failing that, at least a “tax specialist”; I would encourage you away from “investment specialist”. (Let me know if you would like me to expand on this point; also not sure if these terms transfer well across the Atlantic)
As mentioned by other commenters, it’s unlikely for you to want to structure your organisation as a 501(c)(3) – lots of cost/effort and little upside. If your donations are going to tax-exempt (501(c)(3)) organisations, there’s no real tax benefit from you doing this
I haven’t checked if other commenters have covered this, but other options include a straightforward ltd company with adjustments to the constitution to stipulate that the profits must be donated, or maybe even just a non-legally-binding pledge. (I know this is possible in the UK, I imagine it’s possible in the US too). You could also be a B Corp. In the UK there is also the option to be a Community Interest Company (or CIC) – I don’t know of any similar option in the US (B Corp might be the closest thing you have to this)
Lastly, if you’re open to more wacky ideas, I’m more positive about micro-insurance than earning to give in the US. Your personal circumstances may not allow for this, but a few years working as a broker in the US, saving (not donating much) and then a few years selling insurance to the very poor (or trying to!) is likely to enable you to have more impact than this plan, assuming you have flexible skills and are able to learn lots of new skills quickly. (note: I can’t promise that everyone will agree with me on this) This attempt may fail, however it would likely teach you about what is needed to make insurance sales work better for the bottom billion, which may then make you better placed to work in micro-insurance sales for a micro-finance institution or become an entrepreneur.
Finally I’ll mention that I only check the forum occasionally, so apologies if I forget to look back soon and therefore provide slow responses to any more questions on this.
I have been on the board of one charity which focused on child sexual abuse, and another which tackled sexual abuse (not specific to children). I’ll share some thoughts based on child sexual abuse (CSA) because that’s the area I’m familiar with (even though I appreciate that the question is broader).
The TL;DR is that the area has caused a large scale of suffering; it’s hard to tackle, but I’m optimistic that there might be tractable options out there.
Prevalence: I’ve heard people mention CSA prevalence rates that are disturbingly high (e.g. %age rates in the teens or twenties or even higher). I found this surprising. There seems to be some evidence to support this (e.g. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3518746/ ) however this is not a universally held view (e.g. Radford (L) et al 2011 give a figure of 5%, although even “only” 5% is horrible).
How bad is it per person: Through some of my other volunteering I have encountered many people whose lives have been made dramatically worse because of their CSA, with sequelae including dramatically lowered self-esteem, deliberate self-harm, suicidal ideation/intent and major depressive disorder. In short, there can be grave life-long consequences. However that’s just the people I’ve encountered; how often do people survive relatively unscathed? (I know such people exist)
Tractability: Some factors will make it difficult to tackle this topic, including the fact that over 90% of sexually abused children were abused by someone they knew (again from Radford (L) et al 2011); this introduces complex family/social dynamics. Furthermore, it’s hard to identify those at elevated risk of perpetrating CSA. Past behaviour is hard to use a predictor because it’s disturbingly easy to perpetrate CSA and get away with it. Also, anywhere from one-fifth to two-thirds of sexual abuse is committed by other children and young people (source: Hackett, S (2014)). Educating potential victims (i.e. everyone) may be more fruitful, but I haven’t looked into this.
Neglectedness: The ratio of (annual spend on issue by larger charities) / (number of sufferers of issue) seems to be middling for child abuse (not specific to CSA); i.e. probably higher spend (i.e. less neglected) than international aid but less spend (more neglected) than more popular causes such as homelessness and veterans. Note that this is a very rough-and-ready calc
Happy to support/ be involved if anyone wants to look into this further
I think this concern becomes much less of an issue if the EA Hotel didn’t have “EA” in its name
I spotted this sentence: “GiveWell (2018) for instance does not assign any intrinsic value to education itself, nor to improved attendance or test scores.” Do you have a source for this? (As far as I’m aware, I don’t think they have ever said that.)
I think this idea is similar to alice.si (see https://alice.si/ or for more detail https://github.com/alice-si/whitepaper/blob/master/Alice%20white%20paper%20-%20FV%200.9.pdf)
I know the founder of alice.si (not very well, but we’ve met up a couple of times).
(Note that alice is on the blockchain and I’m not convinced there’s much benefit apart from the fact that some people don’t trust charities and the blockchain might help with that)
Also, I haven’t read this very carefully, so apologies if the two ideas are not as similar as I think
I accidentally made this a linkpost for Aubrey de Grey’s TED talk. I then tried to undo this, but it didn’t seem to work.
For clarity, I upvoted ofer’s post, and I did it to indicate that I too would like to read about these arguments. (I suspect that all the other people who upvoted it did this for the same reason). PS this is a great post, thank you Beth!
Great post! Saulius, do you think that campaigners in the relevant animal charities are aware of this piece?