Leaders With Lacqua Goes Green: Bill Gates on the Climate Fight

Humans currently generate 51 billion tons of greenhouse gas emissions every year. To avoid a climate disaster, businessman and philanthropist Bill Gates is championing solutions to help slash this figure to zero.

Because Gates believes there is hope for humanity. As he explained in an interview with John Fraher of Bloomberg, there has been tremendous progress in the development of new technologies that could help. Over the past nine years, he’s seen “a really mind-blowing level of innovation” in climate tech.

This acceleration is at least partially due to the work of the Breakthrough Energy Ventures fund which was founded by Gates, Jeff Bezos and other philanthropists, in 2015.

The fund aims to accelerate climate progress in three ways: by funding climate technologies, reducing the additional cost of choosing a clean technology over one that emits more greenhouse gases and by advocating for regulation to support clean technology investment and bring down costs. It has pledged more than USD3.5 billion in committed capital to invest in more than 110 companies, from seed to growth stage.

Catalyzing clean technology development around the world

To date, the fund has invested in companies working across technologies ranging from battery storage to nuclear fusion. Portfolio companies include Arnergy, one of the fastest growing renewable energy companies in Nigeria; Commonwealth Fusion Systems, which is developing nuclear fusion technologies; and C-Zero, which is decarbonizing natural gas.

To be considered for funding, companies must prove their technology can reduce emissions by at least half a gigaton every year. The fund’s portfolio now comprises more than 100 companies, seven of which are unicorns. They gain access to investment, fellowship opportunities and grants to advance early-stage research within academic settings.

Reducing the cost of accessing clean technologies

“I'm really amazed how far we've come. The companies we founded have ideas that, as they're scaled up, can let us go green without paying a lot more money,” Gates explains. This reduction in the “Green Premium”, the additional cost of using clean technology over polluting options, is a key goal of Breakthrough Energy. When the fund was launched in 2015, Gates wasn’t optimistic about the progress being made in clean technology. “[Back then] nobody was working on the hard problems. The energy R&D budgets had gone down. The venture investing in climate had gone down. It was completely out of fashion,” he says. “Only now could you plausibly be optimistic about the path of emissions.”

Making energy production plentiful and cheap

Another priority for Breakthrough Energy is to make the switch to clean energy production affordable for people everywhere, not just those in wealthy countries. Aside from bolstering the rollout of solar and wind energy production, Gates is supportive of nuclear energy in a lower-carbon future. "If we can make nuclear fission or fusion cheap enough, that's quite magical because you can locate it near to where your electricity is needed.”

Nuclear energy also has the benefit of not being dependent on whether the wind blows or the sun shines, key drawbacks of solar and wind. But energy production is just one part of the story, according to Gates. “If you want to get to zero, you don't get to skip buildings or agriculture or industry or electricity or transport. You don't even get to skip planes or boats. … you've got to change those industrial processes,” he explains.

Overhauling entire manufacturing processes

Large-scale manufacturing and heavy industry are particularly challenging to decarbonize. Sectors such as heavy-duty trucking, shipping, aviation, iron and steel, and chemicals and petrochemicals account for around one-quarter of the world's energy consumption and around one-fifth of total CO2 emissions. But progress is already being made, particularly in the switch to making steel using electricity instead of coal.

“In 2015, we didn't have ideas about how to make steel or cement or any of these emitting things,” he says. Now innovation is underway to provide hydrogen-powered solutions which could help these sectors decarbonize. Where the challenge is too great, Gates sees a role for carbon capture: “That [carbon capture] is the brute force solution that you want to save for the most hard-to-abate sectors. For most things you want to redesign the process, so you are never emitting [in the first place].”

Finding the financing for scaling up

But for many innovators, scaling up to the size necessary to make an impact remains a challenge. While funding is strong for early-stage projects, building factories is expensive and capital options more limited. Currently, large-scale investment for industrializing new technologies is only happening on a limited basis in areas such as wind, solar, and electric vehicles.

Again, Gates is positive about the future. He argues that more investors can be convinced if companies and governments work together to lower the risks for green steel or green cement plants. “We're just at the start and trying to draw in the big-project investors by getting the risk level to a very low level, which is what they require.”

Regulators have a key role to play in supporting energy transition and helping companies reduce climate risks. U.S. legislation such as the Bipartisan Infrastructure Law, the CHIPS Act, and the Inflation Reduction Act have been welcomed by Breakthrough Energy’s U.S. Policy and Advocacy (USPA) team, which works closely with regulators to create supportive frameworks for net-zero adoption. “We're replacing the industrial economy. And so, the fact that it's hard to move fast, I think that'll be the limiting factor,” he explains. The transition to net zero will see large scale changes in the way in which goods and services are manufactured, transported and consumed.

How AI can help us out of the climate crisis

Artificial intelligence presents a double-edged sword for those working against climate change. On the one hand, AI is likely to expedite innovation that could propel key advancements in clean technology.

"AI helps us model out these systems. And so, you can often optimize things and raise your efficiency a lot," Gates says, highlighting big breakthroughs in material science leading to more sustainable materials and better designs. Researchers have already demonstrated applications for scaling deep learning for materials discovery when AI tool GNoME found 2.2 million new crystals, including 380,000 stable materials that could power future technologies.

On the other hand, AI requires huge amounts of electricity. Demand for energy-hungry data centers is growing the world’s global carbon footprint, with global data center electricity use set to double by 2026, according to an IEA report.

Despite this, Gates sees AI as a positive tool for battling climate change and notes the additional electricity demands of other decarbonization efforts which are also essential. "The additional electric demand from electric cars, electric heat pumps, or steel manufacturing, all of these dwarfs even this amazing demand for data centers," he adds. Ultimately, he thinks more work will be done to make AI computations more efficient in the future.

Why Gates is optimistic about the future

Significant reductions in greenhouse gas emissions are required to achieve the outcomes of the Paris agreement. The scale of the challenge is huge but Gates remains optimistic, pointing to existing decarbonization success stories, such as the UK which cut emissions by 50 percent between 1990 and 2022. Gates also sees opportunities in more efficient buildings, electric buses and electrified heating and cooling in homes. Despite the challenges in terms of financing and infrastructure, Gates sees the possibility of realizing the shift. Great science has a key role to play but overhauling infrastructure and the way many industries operate will also be essential to reach the goal. This makes alignment between the public and private sectors, around the world, essential. For now, he’s focused on bringing the right people together to tackle the challenges. “I'm lucky I get to see this stuff in its prototype form, and I know that we've got brilliant people who are going to scale it up,” he says.

Watch the full episode for more insights which was first aired on July 18, 2024, on Bloomberg.com.