Philanthropy Isn’t Spending Enough on Climate Change, and it’s Missing Big Opportunities
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Recent flooding in Louisiana as a result of Hurricane Laura. ccpixx photography/shutterstock
Philanthropy is spending too little to sufficiently slow the pace of climate change over the next decade and key opportunities and regions are in need of more funding, according to a new brief.
Trillions of dollars in government and private sector investment are needed to limit global temperature rise to less than 2 degrees Celsius—and ideally below 1.5 degrees, the goal set by the 2015 Paris Agreement, beyond which the world would face even more cataclysmic droughts, storms and sea-level rise.
With time running out to reduce the world’s dependence on fossil fuels, philanthropy can play a key role in catalyzing that needed funding, according to a brief released last week by the ClimateWorks Foundation, titled “Funding Trends: Climate Change Mitigation Philanthropy.”
“The funding we’re seeing right now is simply not enough given the 10 years we have to turn this crisis around,” said Hannah Roeyer, the report’s lead author and a ClimateWorks’ consultant. “We really need more resources in this space.”
How Much Is Being Spent to Curb Climate Change?
The good news? Foundation funding for climate change mitigation has nearly doubled in the last five years. Philanthropy gave $1.6 billion toward climate mitigation in 2019, up from $900 million four years before, according to ClimateWorks’ analysis.
If you include individual giving, climate change mitigation received much more: between $5 billion and $9 billion in 2019. That range reflects the immense challenges of tracking all such giving globally, and ClimateWorks hopes to reduce that uncertainty in future reports.
The bad news? While that sounds like a lot of money, if you account for individual giving on all issues, support for climate change mitigation adds up to less than 2% of giving globally.
Take giving for climate change mitigation by U.S. foundations as an example. Overall, the issue received a smaller share of grants than others, like religion, public safety, and philanthropy and nonprofit management, and roughly a 10th of the funding received by either education or health, the two leading funding priorities for the nation’s grantmakers, according to ClimateWorks’ analysis of 2016-2017 data.
“We know that 2% is far too small given the enormity and urgency of this crisis, so we do think increasing it from there is very important,” Roeyer told me.
Where Are the Biggest Needs Around the World?
Given the low overall levels of funding relative to the size of the challenge, nearly every country and region needs more support to reduce emissions. “The main point really is that everything is underfunded,” said Surabi Menon, vice president of global intelligence at ClimateWorks and one of the brief’s authors. But she noted that there are some areas in particular need of support.
All of Africa received only $40 million in average annual funding over the past five years, and certain countries on the continent—Nigeria, South Africa and Egypt—are particularly important. She also mentioned as priorities Southeast Asia (especially Indonesia) and the Central Asia and Russia region, “where we really don’t do much at all,” Menon said.
Of course, supporting change in the world’s two leading emitters, the U.S. and China, remains vitally important, given their outsized role in global emissions, she added.
The United States is already by far the biggest beneficiary of foundation funding for climate change interventions. Between 2015 and 2019, an average of $360 million in annual grants went to U.S.-based interventions. The next highest-emitting country, China, received nearly five times less, with an average of just $75 million. Even global interventions did not receive as much as the United States, averaging $310 million over the period. (The brief provided data based on where the intervention took place, not the location of the foundation or grantee.)
The world’s island nations barely account for greenhouse gas emissions, but Menon noted they, too, warrant support, given the massive threats climate change poses for them. “Even if they don’t emit, it’s really important that we help those countries adapt to the impact they will be seeing,” she said. The Marshall Islands, for instance, may end up underwater due to rises in sea level.
Which Industries Should be Targeted?
Back when ClimateWorks launched, its founding CEO, Hal Harvey, developed a tool, which his staff took to calling the “Sudoku.” Like the famous game, it consisted of a grid with one axis representing regions and the other representing industries, and the numbers representing potential emissions savings.
In August, the foundation published a major report, “Achieving Global Climate Goals by 2050,” that essentially updated the Sudoku, this time, with an eye on the Paris Agreement goals. It laid out the potential emissions savings across seven sectors and 10 geographies around the world to show where there are areas of opportunity for governments, philanthropy, and others, as well as reviewing the trade-offs from pursuing certain strategies.
With the new brief on giving, ClimateWorks is sharing with the public the data on foundation funding it has been tracking for the past five years, including how those funds have been distributed between regions, as covered in the section above, and across sectors.
Matching that giving data to sectors reveals some underfunded opportunities. The brief cites the industrial and buildings sectors, which account for 26% of direct emissions reductions needed to fulfill the Paris Agreement goals by 2050, yet receive less than 8% of foundation funding for climate change mitigation.
Transportation and agriculture are other areas where funding is falling short of the potential savings, Menon told me. The two sectors account for 10% and 11%, respectively, of 2050 emissions reduction goals, yet each have received only $50 million annually on average over the past five years, less than 5% of the average total of foundation funding over that time span.
The brief also argues that carbon dioxide removal, which received an average of $25 million in foundation funding over the five-year period, receives “drastically insufficient government and philanthropic funding.” Many models for reaching emissions reductions targets by 2030 and 2050 depend on such technologies removing carbon dioxide from the atmosphere, but the efforts are nascent, and remain controversial in some quarters. “If we’re going to depend on carbon removal to meet net zero goals, we’re going to need to ramp up understanding,” Menon said.
It’s worth noting that the numbers are partially mismatched, because ClimateWorks’ new brief includes a sector called the “Enabling Environment” that is not in their report on the 2050 goals. The sector consists of efforts such as public awareness campaigns, capacity building support and diplomacy. These are areas essential to making progress, but they don’t have specific measurable reductions attached to them.
“We want to make sure the enabling environment gets a lot of attention,” Menon said of its inclusion. “You have to look at what you’re trying to enable to happen, [ask] who are the right messengers.… Unless you get the right pressure on the decision makers, they’re not going to do it.”
Spurring More Investment
ClimateWorks’ close partners had already seen much of the data in the brief, but the team hopes it can reach foundations beyond their circle. “We’ve been hearing more and more that it would be useful information for everyone to have,” Roeyer said.
To date, the feedback has been loudest, not from philanthropy, but from those in the field, with several people telling them: “‘We thought the amount was much bigger,’” Menon said. “There was this expectation philanthropy was huge.”
So how much is needed from philanthropy to turn the tide? “We’ve struggled with this,” Menon said. Four times more investment would be too little, whereas 10 times seems more realistic, but the key is in how the money is used, she said. Announcements like Jeff Bezos’ $10 billion commitment to climate, the details of which have not been revealed, give her hope.
“We need trillions of dollars in investment to make this transition happen,” Menon said, adding that the question for philanthropy is “how do you catalyze the funding that is needed?”
ClimateWorks, for one, will be working to answer that question. Forthcoming briefs will take deeper dives into tactics on sectors like transportation and geographies like India and Indonesia.
