Amazon’s founder and CEO Jeff Bezos has announced a $10bn commitment to tackle climate change, through his new Bezos Earth Fund. The size of this investment is only 8% of his net worth yet nearly matches the overall yearly charitable donations to the cause in the US. Giving USA estimates that $12.7bn was donated to environmental and animal organisations in 2018. The money is a significant and positive boost to climate scientists and researchers who fight for funding each year, but it raises questions about how it should be spent and who will benefit from climate science bankrolled by Jeff Bezos.
It is difficult to critique investment in the fight against the climate crisis, in large part because it is so desperately needed. Many governments, companies, and organisations have failed to take enough action against this existential threat. A United Nations Climate Action Summit report from September 2019 underlined that countries must triple targets to cut climate emissions to limit global heating to 2°C. Even more significant cuts will be required to meet the Paris Agreement’s goal of 1.5°C.
This $10bn is still a drop in the ocean compared with the $6.9tn a year until 2030 that the OECD believes will be required to meet climate and development objectives. While all investments ought to be welcome, we need greater global cooperation rather than just white knights trying to save the planet.
Critics will also say that a more sustainable route would be to implement more effective tax policies on Bezos and his tech counterparts. According to CBS, Amazon didn’t pay federal income tax in 2018, despite profits increasing to $11.2bn in 2018, up from $5.6bn in the previous year. Amazon further claimed a federal tax rebate of $129m, leading to an effective tax rate of -1%. Fairer taxation, like the 3% digital tax introduced in France, has the potential to generate a significant amount of revenue, which could be invested on a global scale.
As things stand, Bezos will play a crucial role in directing the future of the climate conversation, in addition to gaining some positive PR. With no voters to appease, he will be able to handpick the climate technologies of the future and, given his track record for creating shareholder wealth, other investors could get on the Bezos Earth Fund’s bandwagon and create a significant snowball effect.
With this in mind, Bezos must consider the implications of his investments carefully. Climate funds have a history of investing in white elephant projects that are headline-grabbing but ultimately ineffective. Bill Gates has funded research into sun-dimming geoengineering technology, which looks to reflect the sun’s rays through reflective particles. This project is an impressive short-term fix but not a long-term solution to the planet’s climate emergency. The Earth Fund would best serve the environment by scaling up the infrastructure around solar and wind power, as they are relatively cheap and proven to be reliable energy sources. We will see if these technologies are flashy enough for Bezos’s fund (not to mention his ego).
Climate change is an issue that will only be solved through cooperation between people and governments. Slow and limited action by governments suggests that outside pressure is needed to provoke a reaction on the issue. For now, we must accept the decisive investments of philanthropists while remaining aware of their shortcomings. At the very least, they can act as a short-term fix while governments get their houses in order.