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1. The Triple ChallengeSolving climate change is one of humanity’s greatest challenges. However, climate change is only part of the problem; it is one of three intertwined challenges associated with the way we produce energy today, along with air pollution and energy poverty. The burning of fossil fuels not only causes climate change but also kills millions of people every year via air pollution. Moreover, nearly a billion people lack access to reliable electricity and almost 3 billion rely on biomass (wood, animal dung and crop waste) for cooking, with terrible consequences for health. Thus, the challenge we face is not only to decarbonise energy but also to ensure that people in emerging economies have enough high-quality clean energy to meet their growing needs.
This will be a very difficult political, social and technological challenge: we have to replace all of our fossil fuel infrastructure - the power plants, factories, furnaces, cars, trucks, ships and planes, while energy demand potentially increases by a factor of 2 or more by the end of the century.
In this cause area overview, we outline the triple challenge, discuss our priority solution, and outline our recommendations for donors.
1.1. Climate ChangeOne can mark the dawn of the Industrial Revolution with James Watt’s patent for the steam engine in 1769. Before that point, anthropogenic CO2 emissions had been low for millennia, but after it, there have been more than two centuries of almost unchecked fossil fuel burning.
Figure 1. Annual total CO2 emissions, by world region
In the Industrial era, dramatic increases in emissions have come following unprecedented economic growth in the West after the Second World War and after 1980 in emerging economies in Asia. Indeed, in spite of increased awareness of climate change, more than half of the CO2 that has ever been emitted has been emitted in the last 30 years.1 Due to an ever-stronger greenhouse effect, global average temperatures have increased by more than 1 degree Celsius since the Industrial Revolution, far beyond what one would expect due to natural variation.
Figure 2. Global temperature since 1850
Future trends and risksIn the 2015 Paris Agreement, countries agreed to a global goal of limiting warming to 2 degrees, aiming for “well below that”, ideally 1.5 degrees. However, this target is not reflected in binding commitments by countries: pledges made under the Paris Agreement imply warming of at least 2.5 degrees by 2100.2 Worryingly, most countries are not on track to meet their goals under the Paris Agreement and there is no true bindingness in international law. If current policies remain in place, warming will probably exceed 3 degrees. Indeed, there is significant uncertainty about how the climate will respond to emissions, which means there is a substantial tail risk of extreme warming of more than 6 degrees. On current policy, there is around a 1 in 20 chance of more than 6 degrees of eventual warming.3
Under most emissions scenarios, global warming is likely to impose substantial costs on human society as well as the natural world. The costs are unevenly distributed and will fall most severely on the global poor. Sea level is expected to rise by half a metre to a metre by 2100 and continue to rise beyond that, threatening coastal cities and island nations.4 Climate change will disrupt precipitation, drying out dry areas thereby increasing the risk of drought and agricultural disruption. Meanwhile, increasing precipitation in wet areas will increase the risk of flooding.5
In general, the effects of warming are expected to get worse with additional warming, i.e. a warming of 3 degrees is -- in terms of human and ecological consequences -- more than 3 times worse than a world with 1 degree of warming (the status quo). Warming of >6°C would call the habitability of the tropics into question,6 and over the course of millennia would lead to multi-metre sea level rise.7 These changes could in turn destabilise the global political order.
1.2. Air pollutionAir pollution is one of the world’s biggest public health problems, killing 5 million people each year - nearly 9% of all global deaths.8 Low-carbon energy sources, such as solar, wind and nuclear are a win-win, as they lead to many fewer deaths from air pollution and accidents than biomass and fossil fuels:
Figure 3. The safest sources of energy
Source: Our World in Data, Energy
Thus, decarbonising energy would all but solve outdoor air pollution. Declining indoor air pollution is the consequence of economic development: historically, as people have become richer, they have moved away from biomass toward more energy-dense fossil fuels. Thus, the challenge we face is to break the historical pattern and ensure that poorer countries can economically develop without relying on fossil fuels.
1.3. Energy povertyEnergy consumption and human development are tightly connected. The Human Development Index (HDI) is a measure of human welfare that includes income, health and education:
Figure 4. The link between human development and energy consumption Source: Arto et al, ‘The energy requirements of a developed world’, Energy for Sustainable Development, 33 (2016): p. 2.
The chart above is rich with information, but we touch on only two points here:
- Human development and energy consumption are tightly associated. The relationship between human development and energy consumption is very strong: variations in energy consumption explain 80% of the variation in the Human Development Index. It is unclear whether human development causes increased energy consumption or vice versa, or whether the causal arrow runs in both directions,9 but the correlation is strong. This means that, at a minimum, climate strategy needs to be robust to increasing energy demand, or better yet it can actively support increased energy access.
- Diminishing returns to energy consumption, but a high tipping point. The humanitarian returns to energy consumption are highest in countries in which energy consumption is low, such as India, but much lower where it is already high, such as the USA and Australia. However, in many rich countries, energy consumption per head has started to decline in recent years, even as living standards have improved.10 Nonetheless, until this very high tipping point, human development increases go hand in hand with energy consumption.
Given the link between human development and energy consumption, there are pragmatic and humanitarian reasons to plan for a world in which energy consumption in emerging economies increases dramatically in the future. Pathways to decarbonisation need to be robust to this possibility.
1.4. Meeting the triple challengeIn spite of the attention paid to climate change over the last 30 years, progress on energy decarbonisation has been poor, with the share of low-carbon energy barely increasing:
Figure 5. Global Primary Energy Consumption, 1800 to today
Source: Climate report calculations sheet
Looking to the future, as discussed above, we will have to decarbonise energy in the context of rapidly rising energy demand. Consider these facts:
- Around 940 million people currently do not have access to electricity, with many more suffering from too little energy and relying on dirty fuels (such as biomass for cooking).
- There will probably be 3.2 billion more people on the planet by the end of the century.
- The world economy will probably be around 5-10 times larger by the end of the century.11
The UN estimates that there will likely be 11 billion people in 2100.12 Suppose that by that point, each person will consume the same amount of energy as the average Bulgarian today (about half the current high-income country average). In that case, global energy demand in 2100 will be 310,000 terawatt-hours (TWh) per year, compared to about 160,000 TWh per year today - nearly a doubling. Thus, our energy decarbonisation challenge plausibly looks like this:
Figure 6. Our decarbonisation challenge
Source: Climate report calculations sheet
This is an extremely difficult challenge. If we were to build one of the largest nuclear plants ever built every week, week in week out, it would take 20 years to replace the current stock of coal-fired power stations.13 That is before replacing all of the oil and gas, the furnaces and the ships, and before accounting for all the additional energy demand that is to come in the next 80 years.
2. The solutionOver the last four years, we have assessed more than a dozen different possible approaches to climate change, and have concluded that the highest-impact approach philanthropists can take is to support (i) advocacy for (ii) innovation in (iii) neglected low-carbon technology. In a nutshell, the reasons for this are:
- Vastness of societal resources compared to philanthropy: Because societal resources mobilised for climate change are vast compared to the resources of any philanthropist and because policy priorities are often not defined by a focus on global emissions, funding advocacy to shift priorities provides an outsized opportunity for impact.
- Focus of carbon intensity reductions: Because of the link between energy and human development, our primary aim should be to reduce the carbon intensity of energy, rather than reducing the amount of energy that people consume (at least in low and middle-income countries).
- Low-carbon development in emerging economies: Because of the location of future energy demand, our primary aim should be to reduce the carbon intensity of energy in emerging economies.
- Innovation leverage: In a world of low international coordination, reducing the cost of low-carbon energy through innovation is likely the most cost-effective way to bring down emissions in emerging economies.
On neglected technologies:
- Neglected solutions: Some of the most important tools in the fight against climate change are also very neglected by philanthropists, governments and the private sector, which means there is more low-hanging fruit available for strategic philanthropists.
Leverage on future energy demand without coordinationOver the next 30 years, most of the growth in future energy demand is projected to come from outside Europe and North America.
Figure 7. Future energy demand, by world region
Source: US EIA
As a philanthropist, one can affect the carbon intensity of energy in multiple ways -- by seeking to strengthen climate policy targets (national plans under the Paris Agreement), by providing or advocating for the provision of climate finance to incentivise low-carbon development in emerging economies, and by driving down the cost of low carbon technologies through innovation policy.
Because energy innovation is comparatively neglected and has global leverage by making low-carbon technology cheaper and more efficient, we believe it to be the most effective strategy. For example, in the early 2000s, Germany decided to subsidise the deployment of solar at a huge scale. This helped to reduce German emissions somewhat, but - much more significantly - also drove down the costs of solar for the whole world,14 which will likely have much greater effects on the climate. This shows leverage in action, a strategy that needs repeating for other technologies.
The limited need for coordination makes innovation unique among highly leveraged climate interventions.
Focus on neglected technologiesIt is widely agreed in the academic literature that, because climate change is such a huge challenge, to solve it we need to make use of all of the low-carbon tools at our disposal, including solar, wind, hydro, energy storage, electric vehicles, nuclear, carbon capture, biofuels, geothermal, carbon removal / negative emissions technology and zero-carbon fuels.15 However, certain key solutions currently receive much more attention than others from philanthropists, governments and the private sector.
As this chart shows, philanthropic attention has overwhelmingly focused on solar, wind, energy efficiency and electric cars. This philanthropic support has been a major success story, with supportive policy helping to drive cost and performance improvement. However, other key technologies, including carbon capture and storage (CCS), nuclear, and heavy-duty transport (planes, ships, trucks and so on) are similarly important but receive very little attention from philanthropists. As we might expect, the attention these technologies have received is correlated with their progress:
Figure 9. Progress on key low-carbon energy sources (green = on track; yellow = more efforts needed; red = not on track)
Source: International Energy Agency, Tracking Clean Energy Progress.
The success of the technologies that are on track, such as solar and electric cars, is no coincidence - these technologies were advocated long before they were commercially viable, and are now competitive with rival technologies. The world needs to do for the many technologies that are not on track what it has done for solar power and electric cars; strategic philanthropy can have the greatest impact by focusing on these neglected solutions.
3. Recommended funding opportunitiesOur top recommendation for donors focused on climate change is to contribute to the Founders Pledge Climate Fund, which will support the highest-impact funding opportunities in this space. Our Fund strategy is distilled in our ABCs of high-impact climate philanthropy:
The A stands for audacious advocacy. We fund organisations that are thought leaders and advocates influencing both the wider climate conversation and how government and private budgets on climate are being spent. This means your dollars can go much much further than through funding projects reducing emissions directly.
The B stands for blindspots and bottlenecks. We fund organisations that focus on the overlooked but critically required pieces of the climate puzzle. Because we will need all of those solutions and because they receive far less attention than some of the more popular solutions, this is another reason for increased impact. Because many solutions are overlooked without good reason, making blindspots visible and fixing bottlenecks is hugely impactful.
The C stands for coordination and for co-funding. Coming together and co-funding through the Fund provides another impact multiplier through greater certainty for charities, larger overall sums, and the ability to react to time-sensitive opportunities.
Our Fund Managers generate a long-list of funding opportunities by talking to other philanthropists and experts and through internet searches. We filter these funding opportunities down using the criteria laid out in Our Approach to Charity document. Thus far, from a long-list of more than 20 climate charities, we have evaluated a shortlist of 12 charities in-depth, by collecting information from the charities themselves and assessing their track record, organisational strength and future projects.
The Fund Managers will consider the following organisations, among other timely opportunities, in their regular grant allocation sessions:
Our 2018 Climate Change report can be found here. We will publish a comprehensive updated report by the end of 2020.
AcknowledgementsWe are grateful to the people who have provided advice and feedback on this research, including:
- David Addison, Manager, Virgin Earth Challenge
- Myles Allen, Head of the Climate Dynamics group at the University of Oxford's Atmospheric, Oceanic and Planetary Physics Department
- Laura Diaz Anadón, Professorship of Climate Change Policy at the University of Cambridge
- Arild Angelsen, Professor of economics at the Norwegian University of Life Sciences
- Matt Baker, Hewlett Foundation
- Elizabeth Baldwin, Visiting Fellow at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics
- Richard Batty, Researcher, Science Practice
- Sally Benson, Professor of energy engineering at Stanford University
- Thomas Berly, Carbon capture and storage consultant
- Valentina Bosetti, Professor environmental and climate change economics at Bocconi University
- Jonah Busch, Chief Economist at Earth Innovation Institute
- Ken Caldeira, Gates Foundation
- Christopher Clack, Breakthrough Institute
- Alex Clark, Consultant at Climate Policy Initiative
- Antoine Dechezleprêtre, Associate Professorial Research Fellow at the Grantham Research Institute on Climate Change and the Environment, London School of Economics
- Helen Ding, World Resources institute
- Paul Ekins, Professor of Resources and Environmental Policy at and Director of the UCL Institute for Sustainable Resources, University College London.
- Per Anders Enkvist, Material Economics
- Doyne Farmer, Director of the Complexity Economics programme at the Institute for New Economic Thinking at the Oxford Martin School, Baillie Gifford Professor in the Mathematical Institute at the University of Oxford
- Carolyn Fischer, Professor of environmental economics at the Vrije Universiteit Amsterdam
- Sarah Forbes, World Resources Institute
- Julio Friedmann, Senior Research Scholar at the Center for Global Clean Energy Policy at Columbia University
- Jon Gibbins, Professor of Power Plant Engineering and Carbon Capture
- David Hart, Senior Fellow Information Technology and Innovation Foundation
- Stuart Haszeldine, Professor of Geosciences, University of Edinburgh
- Jonas Helseth, Bellona
- Martin Herold, Professor of Geoinformation Science and Remote Sensing at Wageningen University
- Theo Kalionzes, MacArthur Foundation
- Sarah Kearney, Prime Coalition
- Jonathan Koomey, Consulting Professor at Stanford University
- Tim Kruger, Programme Manager, Oxford Geoengineering Programme
- Eric Lambie, Principal Research Fellow. Cell & Developmental Biology. Div of Biosciences, University College London
- Arun Majumdar, Jay Precourt Provostial Chair Professor at Stanford University
- Sam Mar, Arnold Ventures
- Jan Mazurek, Director ClimateWorks' Carbon Dioxide Removal (CDR) Fund
- Samantha McCulloch, Global CCS Institute
- Evan Michelson, Sloan Foundation
- Robin Millican, Gates Ventures
- Henri Paillere, Head, Planning and Economic Studies Section at International Atomic Energy Agency
- Rauli Partanen, Think Atom, author of The Dark Horse.
- Steve Pye, Associate Professor of Energy Systems at the UCL Energy Institute, University College London
- Staffan Qvist, Qvist Consulting
- Greg Rau, Co-Founder and CTO, Planetary Hydrogen
- David Reiner, University Senior Lecturer in Technology Policy at Cambridge Judge Business School.
- Varun Sivaram, Senior Fellow at the Columbia University Center for Global Energy Policy
- Brent Sohngen, Professor of environmental and resource economics in the Department of Agricultural, Environmental and Development Economics at The Ohio State University
- Peter Teague, Breakthrough Institute
- Susan Tierney, World Resources Institute
- Mike Williams, BlueGreen Alliance
- Union of Concerned Scientists, ‘Global Warming Fact: More than Half of All Industrial CO2 Pollution Has Been Emitted Since 1988’ (2014) ↩
- Joeri Rogelj et al., “Paris Agreement Climate Proposals Need a Boost to Keep Warming Well below 2 °C,” Nature 534, no. 7609 (June 30, 2016): 631–39.
- This is based on the assumption that, on current policy, we will end up with 700ppm of CO2-equivalent, and on recent estimates of equilibrium climate sensitivity from Sherwood et al (2020). Our calculations are available in this guesstimate model - the relevant outputs are the median business as usual, and the WCRP warming estimates. S. Sherwood et al., “An Assessment of Earth’s Climate Sensitivity Using Multiple Lines of Evidence,” Reviews of Geophysics, 2020, e2019RG000678. ↩
IPCC, Climate Change 2014: Impacts, Adaptation, and Vulnerability: Summary for Policymakers (Cambridge University Press, 2014), 63. ↩
IPCC, 69. ↩
David King et al., “Climate Change–a Risk Assessment” (Centre for Science Policy, University of Cambridge, 2015), 62, www.csap.cam.ac.uk/projects/climate-change-risk-assessment/. ↩
Peter U. Clark et al., “Consequences of Twenty-First-Century Policy for Multi-Millennial Climate and Sea-Level Change,” Nature Climate Change advance online publication (February 8, 2016).
- Hannah Ritchie and Max Roser, “Air Pollution,” Our World in Data, April 17, 2017, https://ourworldindata.org/air-pollution.
- For discussion of the causal relationship between GDP and energy consumption, see Panos Kalimeris, Clive Richardson, and Kostas Bithas, “A Meta-Analysis Investigation of the Direction of the Energy-GDP Causal Relationship: Implications for the Growth-Degrowth Dialogue,” Journal of Cleaner Production 67 (2014): 1–13. ↩
- Hannah Ritchie and Max Roser, “Energy,” Our World in Data, March 28, 2014, https://ourworldindata.org/energy. ↩
- This is assuming 2% to 3% economic growth for the next 80 years. The global economy has grown at between 2.5% and 3% over the last 20 years. ↩
Oliver Morton, The Planet Remade: How Geoengineering Could Change the World (London: Granta, 2015), 9. ↩
Goksin Kavlak, James McNerney, and Jessika E. Trancik, “Evaluating the Causes of Cost Reduction in Photovoltaic Modules,” Energy Policy 123 (December 1, 2018): 700–710.
- Steven J. Davis et al., “Net-Zero Emissions Energy Systems,” Science 360, no. 6396 (June 29, 2018), https://doi.org/10.1126/science.aas9793; Jesse D. Jenkins, Max Luke, and Samuel Thernstrom, “Getting to Zero Carbon Emissions in the Electric Power Sector,” Joule 2, no. 12 (2018): 2498–2510; Nestor A. Sepulveda et al., “The Role of Firm Low-Carbon Electricity Resources in Deep Decarbonization of Power Generation,” Joule 2, no. 11 (2018): 2403–2420; Glen P. Peters et al., “Key Indicators to Track Current Progress and Future Ambition of the Paris Agreement,” Nature Climate Change, 2017. ↩
The estimates of the scale of the contribution by different energy technologies are somewhat rough, but are likely not out by more than an order of magnitude.