This opinion piece was first published in Alliance Magazine
By Monica Araya and Joe Ryan
We have around 25 years to lower greenhouse gas emissions to near zero if we are to limit global warming to safe levels. Despite the many challenges, we’re making progress. Emissions are declining in Europe and the U.S., and many emerging economies are embracing the clean energy transition. Much of the action is possible thanks in part to philanthropic efforts that have helped shift public opinion, supported science, and informed policy. Now, more than ever, we need swift action in the rapidly expanding economies of the Global South, where emissions are growing fastest.
Building floorspace globally is projected to double by 2050, with most of that growth happening in emerging economies. Similarly, private vehicles will grow from 1.3 billion to 1.62 billion by 2040, with the majority of new sales happening in Brazil, India, and Southeast Asia. Meanwhile, about 70 percent of electricity demand growth will come from China, India, and Southeast Asia. To secure a safe climate future, this new infrastructure must be built clean from the start to avoid locking in emissions for decades. Leapfrogging to a clean energy future will avoid cancelling out the emissions reductions achieved so far.
Philanthropy aims to play a vital role in solving the climate crisis. While global giving is up, only 20 percent of climate philanthropy has been directed to countries in Africa, Asia, and Latin America over the past five years. Today, emerging economies, including Brazil, India, Indonesia, and Nigeria, are making critical choices determining their energy futures. A defining question is how to tip the scales toward policies that prioritise cutting pollution, cleaning industries, protecting nature, and providing comfortable housing. Philanthropy can be a partner in climate transitions that are beneficial for people and the economy.
We must address another funding gap to effect long-term change in these regions. In the last five years, general operating support, such as salaries, made up 14 percent of total giving to grantees in low- and middle-income countries. In contrast, flexible funding made up one-third of all grants in the US and Europe. Increasing grantmaking to core support for emerging-economy partners will foster agile organisations that will increase their impact over time.
In our experience, supporting on-the-ground experts is also essential to winning bold policy. Local experts have intimate knowledge of the cultural, economic, and political dynamics, and possess long-standing, trusted relationships with decision-makers. In-country experts are also the best positioned to define what just and equitable climate policy would most benefit their countries. In contrast, relying heavily on non-resident expertise might stymie progress or even block it.
Still, for some foundations and philanthropists accustomed to funding in the U.S. or Europe, supporting grants in the Global South can be perceived as risky. However, more profound dialogues with local partners can help overcome apprehensions and pioneer approaches that work for funders and grantees. Fortunately, much of the groundwork has been laid and many funders find that working in emerging markets is less complicated than expected.
A clear opportunity are regional climate foundations, which can help direct resources to local organisations and are on all continents: the Institute for Climate and Society in Brazil, Iniciativa Climatica de Mexico, VirayaENB in Indonesia, the African Climate Foundation, Shakti Foundation in India, and the Tara Climate Foundation in Asia. These foundations tailor solutions to local realities, are locally led, and have a deep understanding of the domestic landscape, including government, business, and civil society.
A network approach also offers a high-impact opportunity. The Crux Alliance funds and coordinates a network of international NGOs establishing in-country offices in emerging economies. National experts lead these offices to provide on-demand policy design support to environmental and energy policymakers. Another example is the International Network of Energy Transition Think Tanks, which consists of 20 expert organisations largely based in emerging economies. Each member supports the local domestic energy transition while leveraging a global community to share learnings and best practices.
Philanthropies are stepping up. Last year, the Drive Electric Campaign, a philanthropic initiative to accelerate clean transportation, launched the ‘Leapfrogging Partnership’, thanks to a catalytic investment of $100 million from the IKEA Foundation. The partnership aims to accelerate electrification in emerging markets that aspire to go faster. A growing set of grantees include partners in Brazil, Chile, Costa Rica, Mexico, Indonesia, Kenya, and South Africa.
Let us be clear: climate philanthropy must continue to support grantees in the US and Europe. Too many climate and energy policy gains are under threat. But going forward, prioritising these two geographies will not be enough. Tackling climate change calls for more significant flows of direct and flexible funding to Global South partners. Moreover, stronger global engagement will also inspire much-needed collaboration, policy innovation, and trust. With so many readily fundable opportunities and committed partners, there’s no reason to delay.
Monica Araya is an independent senior adviser. She is a Distinguished Fellow at ClimateWorks and Board Director at the Natural Resource Governance Institute.
Joe Ryan is Executive Director of the Crux Alliance and previously served as Vice President for Latin America at the ClimateWorks Foundation and as a program officer at the Hewlett Foundation for 11 years.