13. Why donating for climate change shouldn't be about buying carbon offsets
If you care about our planet, there are better ways to use your money
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This week, Giving to Strangers spoke with Dan Stein, the director of the Giving Green climate initiative and Chief Economist of IDinsight. I’ve written before about the important niche that Giving Green fills in the charity evaluator world by recommending effective ways that individuals can combat the climate crisis. They direct donors to charities pursuing two broad approaches. The first is US policy change, where they recommend the Sunrise Movement Education Fund and Clean Air Task Force. Essentially, these organizations allow donors to pay activists to push policymakers forward on climate (and advocacy is especially powerful during a transition, when the incoming administration’s policies are still being hashed out).
The second is carbon offsets, where Giving Green recommends BURN, Tradewater, and Climeworks. Buying a carbon offset is a way of paying for a project that reduces carbon emissions, usually as a way to compensate for one’s emissions elsewhere. People buy them to offset a flight, and corporations to claim net zero emissions without actually changing their operations. In this post, I break down my skepticism with two of Giving Green’s offset recommendations: BURN, which sells cleaner cookstoves to people living in poverty in Kenya, and Climeworks, which manufactures a technology to capture carbon. I asked Dan to respond to my criticisms in turn. His responses - which I encourage you to read below - are persuasive.
Along the way, there’s a larger thing Dan and I come to agree about. Carbon offsets are, well, kinda lame. But Dan also thinks about offsets fundamentally differently. He rejects “the idea that offsets can be used to undo your climate guilt” and in fact “encourage[s] people not to buy them” if people can instead support organizations working for systemic change. Instead, donors should “think about offsets as a high certainty donation towards removing carbon.”
I agree with that, and rationally, we should just all think of offsets as a way to maximize the amount of carbon abated with our spare dollars, while also voting or protesting. But most people don’t think like economists do. I think most people simply want to feel like they’re doing their part for the earth. So I worry that recommending offsets as a philanthropic strategy plays into a narrative that individual choices will solve climate change. And if the average person thinks that buying offsets is the best way they can help the environment (because other avenues feel opaque and indirect), then fringe offset projects start to play a disproportionate role in shaping public perceptions of what large-scale climate solutions should look like. This would be fine if there was a “vote for a carbon price” offset, in addition to a “planting trees” offset and a “capture methane” offset. But that’s not how this works.
This is not a criticism of Giving Green, but of offsets writ large. And as someone who made it his business to recommend the best offsets, it was really interesting to get Dan’s take on whether charity evaluators (yes, like Giving Green) perpetuate the idea of individual fixes to climate change. You can read his response in the last section.
BURN: Too small potatoes?
BURN “makes and distributes fuel-efficient stoves in Kenya'' called Jikokoas. These stoves are cleaner than traditional stoves and save families money while improving their health by decreasing harmful smoke in the house. Switching to a Jikokoa is also a cost effective way to reduce emissions, as they reduce emissions at a cost of $7.45 per ton of CO2e. And it also doesn’t hurt that there’s careful research by Susanna Berkouwer and Joshua Dean evaluating that the benefits outweigh the costs of Jikokoas.
But the CO2 that “old” cookstoves emit are one drop in an ocean of global emissions. So I’m not sure exactly how replacing them “new” cookstoves help address the climate crisis. It’s like preventing a boat from flooding by handing someone a teaspoon to scoop the water out.
Let’s do some back-of-the-envelope math. Even if you give a Jikokoa to everybody in Africa who currently has a traditional cookstove, you wouldn’t make a dent in carbon emissions. Replacing every single stove in Africa would decrease global carbon emissions by less than one percent:
1.341 billion people in Africa, and the average household size is 4.7, so there’s roughly 285 million households in Africa
Berkouwer cites that approximately 10% of Kenyan households use a traditional cookstove for cooking (pg 7). Let’s assume that 10% of households in Africa generally do so as well (of course this is rough, some countries might have more, some less). That means approximately 28 million households have a traditional cookstove in Africa.
Each Jikokoa stove avoids 5.4 metric tons of CO2 over two years (or 2.7 metric tons in one year). So replacing old stoves with Jikokoas would abate ~76 million tons of CO2 per year.
10 billion metric tons of CO2 are emitted every year.
So giving a new Jikokoa to every single family in Africa who currently uses a traditional cookstove would (very roughly) decrease annual global emissions by 0.0076, or less than 1%.
Don’t get me wrong — BURN seems like an effective charity, and better cookstoves could be an important part of a poverty alleviation package. But they’re not going to be an important part of addressing climate change.
That’s my take, but let’s see what Dan has to say.
GIVING TO STRANGERS: “Dirty” stoves are just such a small contributor to greenhouse gases. So I was surprised to see BURN recommended, because it just feels like such small fish. And I understand it’s very well measured, and there’s an RCT about it. But I was just worried that it was kind of leading people in this direction of focusing on the small things instead of the big things.
DAN: But that’s what offsets are. The vast majority of offsets are small fish. The whole point of an offset is I give $10, and in theory, that’s supposed to contribute to some project reducing carbon. If you look at the offset market, offsets are like, “let’s save these 500 hectors of trees” or “let’s capture methane gas from some place and flare it” […] Like the whole point is that you’re donating to a very specific project that reduces that amount of carbon. So if that’s what you’re trying to do, and that is the offset market, I don’t really understand why it matters if you’re doing something that has potential to scale or not, right?
You buy a stove for someone that reduces carbon. Great. That’s the point of the offset market. Now, if you want to criticize the entire offset market for being too small potatoes in the greater fight against climate change, well, then you’ll have an ally in me. Because I think it is. But criticizing individual offsets for not having enough potential scale? I don’t really see how that matters.
It’s a little bit different if you’re investing in technology. Or if you’re an investor and you’re like, what should I invent? Should I invent a new clean cookstove? Or should I invent advanced nuclear power? You want to think about this, because then you’re going to spend some fixed costs on innovation. And then based on that innovation, you’re gonna be able to achieve some scale. And you might say, okay, developing a new cookstove isn't a big enough project to work on. But for offsets it's different — there you just care about marginal carbon for marginal dollar. Good cookstoves already exist, you just need to deploy them. I don’t really think we care about the total size of the market as long as your marginal dollar can have an impact.
Climeworks: too expensive?
Another of Giving Green’s three carbon offset recommendations is Climeworks. Climeworks is a Switzerland-based company that builds a technology to capture carbon and turn it into solid material at a cost of $1000 per ton of CO2. This option doesn’t even have the redeemable characteristic that it helps poor families in the short term — it’s just expensive (by contrast, a Jikokoa reduces emissions at $7.45 per ton of CO2).
The McKinsey curve is a way of comparing the cost of various projects that decrease (abate) carbon. The most expensive projects on this graph are on the right, at ~$70 per ton of CO2. By contrast, reforestation is somewhere in the middle at ~$25 per ton. I’ve been told the numbers are almost certainly wrong (they don’t take into account behavioral factors such as compliance, for one), but the point is the same: there’s a lot of ways to remove a ton for carbon for a hell of a lot cheaper than $1,000 / ton.
So the tech produced by Climeworks is - literally - way off the chart expensive. But you might still think it’s worth paying 40x more if you have 40x more certainty in Climeworks’ technology at taking and then keeping carbon out of the air. Or, you might be betting that investing now will bring costs down 20 years down the line, when this kind of carbon capture is a big part of our climate solutions.
Dan and I spoke about whether the benefits justify the price:
GTS: Let me just ask you one question about Climeworks. Which is, why did you recommend something that is so damn expensive?
I understand that it’s totally trackable, and once it’s in earth or wherever it’s going to be, it’s never going to come out. But there is like a bazillion different things that you can do for a thousand dollars per ton of carbon. You can like plant forests for like $50 per ton of carbon. Do we actually think that Climeworks is worth 20 times more? Is that certainty worth 20 times more than like other carbon abatement products?
DAN: So the certainty is probably not worth it. I mean, the certainty is part of what we like about it and why it’s exciting. Is it worth it? No. But what makes it maybe worth it is our conversation earlier about scale. If you’re going to invest in a frontier technology, you want to think about scale.
This technology is ridiculously scalable. So when you think about investing in Climeworks, you’re thinking about investing in a little bit of certainty now, plus the scope of pushing this technology forward to become a major part of the climate solution. I do think that’s important and it’s a nice way to kill two birds with one stone. And that’s why we like it.
GTS: So you’re saying, “Hey, trust me, because I am betting that Climeworks is going to be what solar energy or wind was 20 years ago, back when they were super expensive. So I want to invest in it now because I think it’s going to be important in 20 years”?
DAN: I think it’s a good bet.
GTS: Enough of a good bet to win out over some of the [projects] that we know a little bit more about and are cheaper?
DAN: Yes, I think so. You know, I’m surprised to hear you criticize BURN for one reason, and then criticize Climeworks. When your issue with BURN was that it wasn’t scalable enough. And I said like, who cares? You don’t have a billion dollars to give here, just give what you can.
And then Climeworks is the opposite. Right? It’s infinitely scalable. You can keep throwing money at this and it’s keep going to keep [carbon] going down. But it’s super expensive, right? So the way that you could possibly gain cost-effectiveness is by investing in it early, to bring down the price. And then you get something that’s exciting to you.
How does the guy who recommends carbon offsets thinks about carbon offsets?
DAN: I think I come more on the side of what we really need is institutional change. I think tons of people switching to clean electricity or more fuel efficient cars — this can make a difference. But I think in the end, it is sort of small potatoes.
I would never tell someone to stop giving small donations or changing their activity. But I think the problem is when you get people thinking that their responsibility to the climate starts and ends with themselves. You know, “I’m a vegan and I drive an electric car and I produce all my electricity using solar, so I’m doing my part.”
I think that’s where it gets super problematic. And I do think these websites that are calculate your carbon emissions and then offset them play into that narrative.
GTS: Are you playing into that narrative?
DAN: I don’t think I am, because if you actually read some of the documents we say about offsets, we reject the idea that offsets can be used to undo your climate guilt, and encourage people not to buy them. And instead to think about offsets as a high certainty donation towards removing carbon.
We’re trying really hard. If you read our website and you thought we’re playing into that, I’d like to take that feedback because I really don’t want to play into that. I think that the idea of actually offsetting your carbon emissions is kind of bullshit.
GTS: But I do think there’s some sort of deeper philosophical question around, “Are we as a community playing into this narrative [of individual over] institutional change?”
DAN: Yeah, I think you would bridge that gap by trying to convince people to make the individual changes that contribute to the institutional change. So for instance, we even say on the website that if you’re an individual and you want to do the most for climate, I wouldn’t recommend you buy the offsets. I’d recommend that you donate to the organizations that are working for systematic change, which are policy organizations. And so I think that kind of thing is consistent. Like to say, “you’re an individual, there’s nothing you can do”, that’s very powerless. You can get involved with organizations or political systems that are trying to make these systematic changes.
Which strangers should you give to?
You can donate to Giving Green’s top recommendations. And if after reading this, you agree with Dan that offsets are small potatoes compared to US policy change, then donating to the Sunrise Movement Education Fund or Clean Air Task force is your best bet:
But if it’s fun for you to know exactly how much carbon your extra bucks abated, or you like knowing that you helped an actual thing actually be produced, then the offset projects Giving Green recommends are certainly top notch for what they do:
And, of course, someone has to support the people doing this work in the first place. If you’ve found that Giving Green’s recommendations have helped you make decisions, you can donate to them directly so they can keep growing: