Jeff Bezos plans to donate a large portion of his fortune to fighting climate change, but it will only go a small part of the way. Liam Glen writes on why government action is the only way to combat the climate crisis.
Amazon CEO Jeff Bezos, the richest man in the world, has recently announced the creation of the Bezos Earth Fund. He plans to donate $10 billion, which will go towards organizations fighting climate change.
Needless to say, this is a massive sum, even if it is only a tiny fraction of Bezos’s fortune. Through any controversy, this should not be forgotten. However, while $10 billion will go a long way, it will not come close to solving our problems. Above all, it cannot be taken as a substitute for government action.
What Philanthropy Can and Cannot Do
There are plenty of things that one can do with $10 billion. This includes investing in renewable energy, public transport, and conservation. A significant amount of time and effort will go just into deciding the best use of the Fund.
But even though this is far more money than most humans can hope to see in their lifetimes, it will only go a fraction of the way to fixing the problem. The idea of solving climate change is a nebulous one, so it is difficult to determine exactly how to do it. Some of the low estimates from McKinsey sit at just over $215 billion. Meanwhile, a higher one by Morgan Stanley puts the cost at $50 trillion.
In either case, no private individual, nor a collection of private individuals, can get it done alone. A collection of world governments, however, just might be able to rise to the challenge.
There are several reasons for this. For one, the government’s power of taxation is much greater than most private individuals’ ability to raise funds. Furthermore, the state has far more tools. It can incentivize and disincentivize behavior through public policy, along with banning and regulating certain products and services.
The State Will Always Be Necessary
The idea of philanthropy and civil society as a substitute for the government is an enduring one, but one that is severely flawed. Politicians and bureaucrats reallocating taxpayer money might not always make the best decisions, but charity is also not a failsafe source of social improvement.
A relevant example may be that of Andrew Carnegie, the nineteenth-century steel magnate whose “Gospel of Wealth,” advocated that the ultra-wealthy like himself spend their fortunes on philanthropy. Ironically, however, he remained unrepentant about the harm that his monopolistic business practices did to society. This includes his company’s use of Pinkerton mercenaries against the 1892 Homestead Strike, which killed seven workers.
While less extreme than Carnegie, Bezos’s newfound environmentalist passion is ironic as critics question the carbon footprint of Amazon itself. While charitable giving by the ultra-wealthy is admirable, it is not an ideal situation when it cannot cover up the damage caused by their other actions. When it comes to these structural flaws in business practices, government regulation once again becomes the best recourse.
Philanthropy in this area should certainly not be discouraged. In times when the government fails to do its proper duty, it can help cover up the gap. And even when the government does serve its basic functions, it can be a helpful compliment. However, with something as wide-reaching as climate change, voluntary giving alone will only go a small part of the way.