Climate at the crossroads?

We've released a report on how our thinking around climate strategy has evolved as we've adapted to the changing environment. We provide a deep-dive into some key considerations we’ve been taking into account that have led us to diversify our philanthropic portfolio through the Climate Change Fund in light of specific events.

In particular, one potential crossroads for climate philanthropy is the upcoming 2024 US Elections. Former President Trump is a coin flip away from a second term, which is seen by many as a catastrophic outcome for fighting climate change in the US and globally.

This election is more consequential than prior elections for climate outcomes. One reason is because part of Biden’s impressive climate record—making the biggest bet yet on driving clean technology to commercial viability across most sectors—is at risk. Another reason is because Trump’s hostility to climate action would likely have strong international repercussions as well, changing the global climate action outlook. To prepare for the possibility of a Trump victory, we’ve been expanding our thinking and grantmaking around three strategies that we believe could be promising:

1. Coalitional diversification in the US: Supporting right-of-center climate groups (the Ecoright) offers a promising approach to building bipartisan support for climate action. This strategy hedges against unfavorable election outcomes while also contributing to long-term policy robustness. This is a major reason why we’ve been supporting DEPLOY/US, an organization focused on developing the Ecoright field and shaping the climate narrative in conservative media.
2. Geographical diversification: Investing in climate progress outside the US can provide some insulation against US political volatility. To that end, we’ve considered increasing our grantmaking in other regions that contribute to climate policy and technological leadership, such as the UK, Canada, the EU, and other OECD jurisdictions, and made some additional grants in those jurisdictions. However, we also note that the effectiveness of this strategy is limited by the positive correlation of climate policy changes across jurisdictions.
3. Global coalitional diversification: Expanding support for right-of-center climate efforts globally may become increasingly important, particularly if a Trump victory emboldens anti-climate policy stances internationally. We plan to continue evaluating these considerations in the future to understand which regions to prioritize.

It may seem preemptive for us to have begun pursuing these strategies years in advance, rather than waiting until after the election is over. We consider and address three main critiques:

• Why shouldn’t we just wait until after the election? We believe that—on balance—the benefit of waiting for new information is small compared to the significant costs of delayed action. There are two particular reasons for this in this context: the opportunity costs of waiting, and the potential Overton window around permitting and transmission reform in the lame duck session directly after the election.
• Why is it possible for us to “beat the market”? Given that everyone knows the same information we do about the probabilities of different election outcomes, we might assume that philanthropists have already priced in all contingencies and that there is no way to “beat the market”—to find opportunities for outsized impact that do not rely on private information. While this is probably true to some degree, we believe there are strong reasons to expect that philanthropists underreact to potential developments: namely, that climate philanthropy is dominated by individual donors, most of whom lean Democrat and may be susceptible to politically mediated beliefs and motivations. Moreover, foundations and other strategic donors also tend to react to observed events rather than “pricing in” information in advance.
• Why can’t we make quick adjustments after the election? It’s true that when Trump won in 2016, funding for certain causes threatened by the administration surged in a very short time, equipping charities working in these fields with ample funds. If such autocorrections were quick and sufficient, then there would be no need to act in advance of outcomes under uncertainty. Still, we find that not all obvious fields profited from these corrections—including the Ecoright—so these compensatory dynamics are likely insufficient to make preparatory action unnecessary.

While we focus primarily on the 2024 US election in this report, we hope that some of the arguments and findings we lay out here will be useful beyond this moment in thinking through these topics more broadly, including:

• The benefits and costs of waiting for the resolution of uncertain outcomes.
• The degree to which philanthropy does not approximate an efficient market, and thus does not price in publicly available information.
• The types of strong preparatory philanthropic strategies that can increase robustness in the face of uncertainty.

If you would like to support effective and neglected solutions for combating climate change, consider donating to the Climate Change Fund.

Read the full report.