S2, E20: Inside Rick Steves’s Self-Imposed Carbon Tax

In this week’s episode of Unpacked by AFAR, we dig into the Rick Steves’ Europe Climate Smart Commitment—a self-imposed carbon tax—with one of the program’s masterminds.

Can $30 per traveler really make a difference when it comes to carbon offsets? For Rick Steves, the answer is “absolutely.” For the past four years, his company has paid a self-imposed carbon tax—in 2022, they donated $1 million to a dozen, carefully selected nonprofits to mitigate the carbon cost of their travelers. In this week’s episode of Unpacked , we chat with Craig Davdison, COO of Rick Steves’ Europe, about how their Climate Smart Commitment program works—and the life-changing results.


Aislyn Greene, host: I’m Aislyn Greene and this is Unpacked, the podcast that unpacks one tricky topic in travel each week. And this week we’re unpacking the Rick Steves’ Europe Climate Smart Commitment. If you listen to last week’s episode—and you don’t need to have listened to last week’s episode to follow this one—but if you did, you may be familiar with this program. It’s essentially a self-imposed carbon tax.

See, for every traveler who joins a Rick Steves European tour, the company donates $30 to a carefully selected group of nonprofits. And in this episode we’re going to be hearing from Craig Davidson, he’s the COO of Rick Steves’ Europe, about these nonprofits, how the company selected them, and the really incredible things they’ve seen come from this program.

Like I said, you don’t need to have listened to last week’s episode to follow this one, but it is a helpful primer to kind of understand Rick Steves, his values, and how they’ve evolved over the years—and how he and his company view the world.

I have found them to be an impressively ethical and sustainable organization, one that I really hope inspires other companies to follow suit. All right, but that’s enough fan-girling. Let’s get on to the show.

Aislyn: Hi, Craig. Welcome to Unpacked. Thanks so much for being here today.

Craig Davidson, COO Rick Steves’ Europe: Well, great. Thank you very much for having me. I appreciate it.

Aislyn: Of course. I just had a wonderful chat with Rick about his ethics and what led to the creation of the Climate Smart Commitment. And so I am just hoping, with you, to kind of get into the nuts and bolts of that. And I know that you spent a lot of time on this—creating it. And so I would love to start off by just having you explain to our listeners what exactly this commitment is.

Craig: Well, the Climate Smart Commitment is really, I like to say it’s just the embodiment of our values. Look, [at] Rick Steves’ Europe, we’re, we’re teachers first. We like to teach good and thoughtful travel. We’re role models, personally and professionally, and then we advocate for humanness in a world that’s becoming increasingly materialistic or isolated.

So we always try to put humans at the center of everything we do when we travel or [in] our programs. And so this, this is the culmination, to me, of all of those values. And the Climate Smart Commitment is just—I look at it, it’s the big number of what we do, but it also ties into all our philanthropic work.

So I come from a world, from economic school and everything else that you come through of, you know, your job as a manager is to maximize shareholder value. And back in school, I used to think, That doesn’t make any sense. If maximizing shareholder value is short-term gain-gain, maximize the dividend, and I make you a millionaire but you can’t drink the water or breathe the air, I’ve kind of not done my job in maximizing your value. And so I’ve always felt there’s gotta be some sort of ethical social issue inside of management. And then when I met Rick and joined his company, like Rick is very much interested in social justice issues and has given money for years to support causes that he believes in.

We formalized all of that from an organizational perspective and created the shareholder [model], but really the stakeholder model where we said, “The Earth and the community are shareholders of ours.” And so the community receives a dividend and we partner with local organizations here to give back to the community to make our community stronger.

And then the Climate Smart commitment is the dividend we’re giving back to the Earth, really to pay it back for the resources that we use in order to earn a profit. Like, I can look at it, no different than any other investor. And we know that when you travel, especially plane flights can emit carbon, and that causes climate change.

So we’d structured this program to pay back that dividend to the Earth by attempting to help creatively mitigate the carbon created while traveling, while putting humans at the center of the program.

Aislyn: Yeah, I love that. And there are, of course, carbon offset programs, and I know that you looked into that, and so why did you decide to not go in that direction and instead form this?

Craig: When we started this, when I started researching it, we did look into them. Um, I just don’t think they—they don’t meet who we are as an organization. We like to be really involved and be in partnership with the organizations that we are involved with.

We wanna understand the stories and have a relationship and know exactly where our money is going, and we like entrepreneurial, empowering, systemic change kind of projects that stabilize people’s lives and then give them the opportunity to grow and be entrepreneurs and, and really change the system that has put them in the situation that they’re in.

And so when you talk about carbon offsets, just the simple answer for us is, we know there’s a lot of administration costs, there’s a lot of overhead costs and things that are inside of this mechanism to buy an offset. So we thought, “We could get more bang for our buck, you know, by donating directly to an organization and understanding the projects they were working on.”

And it gave us a more solid tie to the projects themselves once we know who’s running them.

Aislyn: That’s great. I love that. And so for every tour member, you take $30 and invest it in one of this handful of organizations. How many organizations are within this portfolio, as you refer to it?

Craig: Yeah, that’s right. It’s a portfolio. I like to refer to—it’s my mutual fund of organizations where the primary investment is in people. So based on the number of travelers who went with us in 2022, that million dollars has gone to 13 [nonprofits]. Generally, the portfolio will float between 10 to 13, you know, a hundred thousand dollars each tends to be the big number.

Aislyn: OK. And how did you go about selecting and vetting these organizations? It sounds like you’ve done a lot of homework.

Craig: I mean, the initial go-round, I mean, that’s where a lot—you’d say there’s a lot of vetting went on with that. I think our program has migrated over the years. I think it’s become cooler in a way.

I think of what we’ve learned, and what I’ve learned in this, about global systemic injustice and all sorts of stuff [so] it’s migrated over time.

We love the idea, there’s a book called Drawdown that we had read really when we were formulating this, and it’s all about what carbon or climate environmental projects you could invest in and which ones had the biggest impact on climate change. And when you get to number six, when you read the list, it’s about the education of women and girls in the developing world.

And the impact of that is basically immeasurable. So it was this idea of saying, “I really love the idea of education.” That’s who we are as teachers first. And so if we can make [a] community stronger and educate women and girls, that ensures the lasting impact of any of the programs that we’re doing. It ties exactly into what we wanna do as an organization.

And so there, everything had to have an element of that. And then of course, we were looking at the social injustice, really, of the global capital market system. And we’re capitalists. We like making a profit. But the problem with maximizing shareholder value or all of those issues is that the capital system doesn’t really care about the inputs.

It cares about the value of the output because it wants to make money on it. But the people or whoever who are producing the product are often left behind. So we wanted to look at something that way to say, “How can we really impact the lives of—it ended up being farmers in the developing world—to help farmers farm in a way that had less of an impact on climate change, but also help them mitigate the impacts of climate change?”

Because for farmers, you know, they’re caught in the middle. They make less and less money every year cuz commodity prices drop. We don’t want to pay more money at the grocery store for food. So they’re the ones who make less and less money. It happens in the U.S. too, to U.S. farmers, but the poorest people in the poorest countries are being hit the hardest by climate change.

They don’t have the resources to really fight back against it and what they do to just make enough money to survive or just to live could be deforestation. It’s trying to use more chemicals. It’s just trying to get more out of the land that they have. And by doing that, it’s causing climate change. It’s deforesting, chemical production, emits carbon into the atmosphere, and all of that slew of things.

So that’s why we centered on those two ideas. And then it was really just, organizations can apply to us for grants, and we look at those grants under those criteria.

Aislyn: Interesting. And what specifically, uh, in your work with or organizations that work with farmers, what do they do? Like what is the—how is the money used?

Craig: A lot of our programs are about—there [are] two pieces to it. It’s helping farmers farm in a way that all mitigates their impact on the climate but helps ’em adapt to the climate change.

Aislyn: I see.

Craig: So there’s that section of it, but then there has to be an ongoing education component. So our partners tend to partner with local organizations. So this isn’t about us showing up and dumping a bunch of money or telling people what to do and keeping ourselves in a project forever. This is about organizations partnering with local organizations and local, uh, people to bring in the technology and bring in the tools for farmers to farm more efficiently. So it’s teaching things like organic farming so that if they can make compost, it’s as simple as that. If they can make compost, that’s now free, they don’t have to spend money on chemicals. That increases their income because now they don’t spend money on something.

Um, it’s an investment in hydroponics and we like to talk about it [as] an investment because many of our farmers opt into these programs—many still say, “No, the old traditional way of fertilizer and the way I farm is the way I know”—farmers elect into these programs to become entrepreneurs. We provide that investment and with hydroponics and water, uh, saving techniques now allows farmers to get through the dry seasons and the droughts and all of, you know, the crazy weather we see here, even in the United States, but now they can have more than one harvest. So now that increases the yield on their land. There’s no need for them to deforest to try to get more land, to plant more crops, to make up the income that they’re losing through the commodity price. Um, if they don’t deforest, of course that helps climate change so they can make more on the plot of land they have, but then the next step of it is bringing in technology to help them.

A lot of these farmers, because they’re stuck in extreme poverty, they live in constant, uh, search of firewood. An open pit fire generally in the center of their house burns constantly because they have to boil water. That means the kids and women are generally always either going to try to find water or go find firewood.

The firewood, of course, is deforestation. You can argue the smoke from the fire is climate change, causing carbon emissions, but it’s keeping kids from school. So if we can bring in climate-smart cook stoves—and one of our partners said one cook stove can save the equivalent of, uh, 30 trips to Europe worth of carbon—so if you can bring in a climate-smart cook stove, they might never, you know, [they’ll] have to cut down trees again, but we can teach restorative, uh, farming so that they constantly replenish their fuel supply, but they use less.

If we can bring in chemical water filters, now they don’t need to boil water all the time. They have clean water. Kids can now go to school, and it creates a whole different community aspect. At the same time, with the increased farming and the increased yields, if it’s organic food, they can make more money at market. Farmers can start to make enough income that stops this ongoing need for deforestation.

And then we bring—we reforest a lot of nurseries, a lot of replanting. So we can restore the biosphere or the biodiversity of the area to really bring the planet back to where it was. And that way these farmers can live and thrive in this global market with a reduced footprint. And really we stabilize, I argue, we stabilize the food supply.

Aislyn: Yeah, absolutely.

Craig: Yeah, cuz once farmers lose hope and if they can’t farm, they migrate. And that’s, that’s a whole other issue. So we’re trying, from a systemic point of view, we’re trying to say, “If we tackle this, this way we can help the climate, but we can also solve all of these other side issues that are, that are stemming from just climate change and the impact on farmers.”

Aislyn: Got it. Yeah. I mean that is, that’s huge. And especially, you know, in terms of, like, global food supply and food security, right? So something that we’ve struggled with at AFAR and kind of balancing this out, I’m just curious to know your take on this—is going back to the idea of mitigation. So, OK, the carbon that we emit by, say, flying to Europe or wherever we’re flying to is immediate, but these programs can take a longer period of time. So how do you balance that out? How do you view that, I should say?

Craig: I think we, we wrestle with it too. You know, it is very hard. There’s an—the immediacy of offsetting, if you use that term, but we don’t like to use the term, but it’s like that flight. We, we just—we look at it, you know, I guess in just a different sort of way.

I mean, I’m sure that’s what you guys wrestle with as well. It’s like we don’t wanna get hung up, necessarily, on the intricacies of that immediacy. And it’s—we wanna be accountable for what we’re doing and we wanna take action. So we wanna take action now while we try to figure out the rest of these issues, because we learn more every day and our program, like I said, is slowly migrating as we learn more to attack more of these issues.

Aislyn: Yeah. Yeah. I mean, I, we don’t have the answer either. I think what we’ve settled on is, you know, encouraging people to offset in whatever way. And, I, I love, I love the program that you guys have developed, um, and also at simultaneously encouraging people to be more thoughtful, cuz we do think that it’s important to travel and to, kind of, you know, be a citizen of the world and that you learn so much and that there’s value in that. But to, you know, maybe do fewer short flights or if you can take an alternative form of transportation. And then looking at airlines that are really doing interesting things in terms of sustainable aviation fuel and, uh, carbon capture and things like that. So I feel like it’s like a mix. We’ve landed on a hybrid.

Craig: I’ll say, I think that’s, that’s right. And from our travel concept you know, we’ve always been very much of “When you travel to Europe, stay in a hotel, stay in a place longer than one day.” So on our tours, we don’t have as much housekeeping as we used to have, but just from the way we travel, we’ve always promoted public transportation.

It’s about getting to a place and living like a local, staying in local hotels which have a smaller footprint, staying in local or eating at local establishments so that your money stays in that community, and then really impacts the community that you’re in. So we’re actually fortunate in that way that we’re, uh, we’ve always tried to be—and if you’re in Europe, a lot of times you’ll take trains between cities if that’s the way we’re moving—so we’re lucky that our style of travel has always had a low footprint.

Aislyn: Getting there.

Craig: Getting there. Yeah.

Aislyn: Um, I was curious to know what, because now any traveler can contribute to the Climate Smart Commitment. right? Like, it’s not just you—you do it still for your tour members. But I, as a traveler, if I wanted to offset my next trip to say France, I could, I could donate. Do you have, like, a recommendation that you would give to travelers in terms of how to do that?

Craig: Well, I think, you know, we come back to, uh, a lot of what I like to talk about—I think you’ve just said it too—it’s about accountability, right? If you’re a citizen of the world, you understand that your actions have repercussions, so if people take personal responsibility and understand the issues and understand what they can do, then we like to say just be accountable for that.

And if you like a project like biofuel or something, contribute to that if you feel like that’s the answer. Our program matches the values of our organization so if you like our program? Yes, you can donate to us, you can go to our website. It’s ricksteves.com and at the bottom there’s a link to Climate Smart. And your money will be added to our self-imposed carbon tax and then allocated out to the organizations who apply to grants that make it through the grant process.

Um, you can also go to, if you get to our website and read our portfolio, you—there’s always a link for people to donate directly to those organizations if someone likes that organization more than another one. And right now, taking action, to me, is the most important thing any of us can do.

Aislyn: So you launched this program in 2019. What have you seen change or grow since then?

Craig: Um, in terms of our projects and the project success, I think I, uh, you know, we’ve brought three villages out of extreme poverty, so that’s pretty exciting. We’ve seen impacts. We’ve actually had one of our partners, it’s the same partner, but that partner say to us when we started this—and we gave them the idea of climate-smart farming techniques, and this is what we wanted to invest in, they didn’t think it was gonna work. They were traditional agronomists. This is about, you know, chemicals and all of how [that and they wondered how] this was gonna work. But they started to do it, and in the three years, what we’ve done has become the now foundation for all their future work in the developing world.

So that to me is exciting. We’ve gone from this idea of “Will it work?” and “Let’s try it out” to “Wow, this really does work and the results are so amazing, let’s continue on.” That’s changed my knowledge of the way the world works, and the capital market systems and food productions and how governments of countries are trying to do the right thing, but maybe aren’t, and they harm their citizens.

So like now we’re trying to help tribes who have been kicked off their land because [the government has] created a national forest. Well, these, these tribes, can no longer sustainable farm or sustainable hunt or do or subsistence hunt, really, or subsistence farm[ing] anymore because it’s protected land. So we’re helping those groups buy back what was their traditional land from the government so that they can manage it in a better way and still live in it and be part of that, part of that ecosphere.

Aislyn: Oh, cool.

Craig: It’s, it’s that and really understanding how organizations, you know, turn a blind eye to illegal deforestation of rain forests and how, you know, I can deforest a rain forest, produce a product that a brand buys and the brand sells it, but there’s no repercussions because the organization that deforests, they do it, their government doesn’t care. We displace a whole bunch of people that used to live on the land. Nobody seems to care. The brand buys the product and makes a profit. And the government earns the tax off the sale. So there’s like a reward for doing it as opposed to a penalty.

And, and the other side of it is there’s this huge humanitarian issue being created by the displacement of people that would be on the land. Farmers are being displaced. You know, you can see a lot of news stories. We’re losing the wild for food production or urban areas, which is accelerating climate change, which makes the food supply even more unstable and which creates a bigger, uh, humanitarian crisis. So it’s like, it’s all interconnected. It’s not just climate change and it’s, it’s hard to explain in a nutshell.

Aislyn: Yes, yeah. Well, it seems very concrete, like you can, sure, go down, dig into the weeds, but it seems pretty pretty easy on the surface level to kinda grasp and understand. Oh, I was wondering, I had read that you were setting up some kind of training center for farming. Is that right?

Craig: That’s right. That’s the same group that brought the three villages out of extreme poverty. Now the next step is to build a training center. Um, all of our organizations really have some element of training where farmers come and learn—a lot of it’s basic literacy training. It’s understanding just, like, basic accounting so that they could become entrepreneurs and know profit and loss off a farm, that kind of idea.

But, in this project, specifically, we’re gonna build a training center where farmers now—instead of building a village from scratch and doing it—we’re gonna bring farmers in from other villages to this training center where they can live. They’ll be given a plot of land where they can learn all these new techniques.

And that way if that plot of land works and is productive, they can earn the income off the plot of land and we will compensate them for leaving their village to come and giving up their farm, really, because they have to give that up to come learn the new techniques. But it’s the idea of bringing people in to learn and then letting them go back to where they were and adapt the new techniques because we can reach more people that way.

Instead of doing it village by village, we can teach a lot of farmers, and then we empower those farmers to go teach those people in those villages. And that’s what a lot of our organizations do too. That’s the education of women and girls, where women and girls are learning how to maintain all these programs.

They’re learning how to, you know, “train the trainer” idea. They are the trainers, and it’s keeping young people in the villages and giving them careers so that they stay in the villages. The community stays stronger. It stops migration, but it also ensures continuity of the food product.

Aislyn: Absolutely. And where is the training facility located?

Craig: Uh, this one is in Nicaragua, and most of the farmers will also be from Nicaragua for now.

Aislyn: OK, got it. Is there anything else that you think is important for, you know, listeners to know about this or your, kind of, the company’s take on climate change?

Craig: I would just say, you know, there’s an interesting—I say the world is an interesting place at the moment. We run the gamut from people who believe in what we’re doing and believe in our point of view and support us, and we get the, “You’ve been taken in by the hoax and there’s no such thing as climate change” and everywhere in between.

So from my perspective, I like to look at it this way. You know, we’ve developed a program that’s based on our values. We believe climate change is real. We don’t believe there’s a debate. And by the way, even if there is a debate, if I end up, you know, at some point in time, I will not be here anymore. And if I’m—if I meet my maker or whatever you wanna say that is, and there’s Judgment Day, I wanna be able to say, “I thought there was a problem and I did what I thought was right,” as opposed to being [apathetic]. And if you say, “Well, you got fooled,” OK, but at least I did what I thought was right and I improved the lives of hopefully thousands of people in the world while we did it.

And at the core of who we are at Rick Steves’ Europe, that’s what we’re trying to do. We’re trying to create those human connections and make the world a better place through travel.

You know, the same as your company is, and it’s becoming a global citizen and understanding issues and really just trying to make the world a better place. And that’s what we’re doing and that’s what I would say to everybody. Just be accountable for what you do. Act ethically. And take action in whichever way you think you should, because that’s how we’re gonna make the world better.

Aislyn: Hear, hear. I agree. Yeah, no, we’re very much values-aligned in that way. Well, thank you so much for your time and for being here today. Um, I really appreciate it.

Craig: Thank you, I really enjoyed it. Thanks very much for having me.

Aislyn: All right. Thanks for listening, everyone. If you want to learn more about the Climate Smart Commitment or donate to any of the nonprofits you heard about in this episode, visit ricksteves.com, which we’ll link to in our show notes.

Next week, we’re going to be talking to a Delta flight attendant about flying with kids and all the joys and challenges that that can bring. And how to do it without losing your mind. It’s a great episode. Definitely tune in for that. And also just a reminder that we’ll be releasing season four of Travel Tales by AFAR on Thursday, October 5th. So make sure you subscribe now, if you haven’t already. See you next week!

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This has been Unpacked, a production of AFAR Media. The podcast is produced by Aislyn Greene and Nikki Galteland. Music composition by Chris Colin.

And remember: The world is complicated. We’re here to help you unpack it.