The Juice

Bill Gates Isn’t a Climate Savior

He wants to throw billions at the threat of global warming. That’s not the way to beat it.

Bill Gates

Will $2 billion from Bill Gates save the climate? Above, Gates at the Clinton Global Initiative’s annual meeting, Sept. 27, 2015, in New York City.

Photo by JP Yim/Getty Images

On the eve of the Paris climate talks, Microsoft founder Bill Gates made splashy news by announcing that he and a group of fellow billionaires would create a new fund that would invest in clean energy research. Gates alone would kick in up to $2 billion. The Breakthrough Energy Coalition has been hailed as a great breakthrough. Many of today’s smartest and richest industrialists are teaming up to bring their capitalist-superhero powers to bear on a world-threatening problem.

Now, I like Bill Gates as much—perhaps moreso—than most people. Without him, there would be no Slate, and he once wrote me an email complimenting one of my columns. But I’m skeptical about his latest philanthropic act. He and his Superrich Friends might have more impact if they were to invest their money differently.

First, Gates’ coalition is the creation of a slice of the business establishment: hedge-fund magnate George Soros, Hewlett-Packard Enterprise CEO Meg Whitman, venture capitalist Vinod Khosla, and other graying magnates. And history has generally proven that one generation’s establishment, no matter how smart and rich, doesn’t necessarily know what it takes to create the next generation’s energy or transportation standard. Robert Fulton, who invented the steamship, didn’t come out of the sailing industry. The railroad barons didn’t come up with the set of the inventions that turned the next dominant phase of transport—the car—into a consumer product. That was Henry Ford, a cranky inventor who worked in his garage. The kerosene industry didn’t invent the electric light bulb or turn oil into a business; those honors fell to Thomas Edison and John D. Rockefeller, respectively. BMW didn’t build the first cool all-electric sports car; Elon Musk did.

All of which is to say that very smart people with lots of money and deep understandings of how to build industries don’t always have the knowledge to identify, invest in, and back the next big thing—whether it’s in their own business or in others. (Gates would likely admit that he missed a whole bunch of developments in the software and personal computer markets.) So, yes, Gates, Soros, Mark Zuckerberg, and Marc Benioff, the blissed-out CEO of, might be able to identify the people, researchers, or managers who will make breakthroughs that lead to radical changes in the way we produce, store, and distribute energy. It’s as likely that they won’t.

Second, while it sounds like a lot of money—$2 billion is two with nine zeroes behind it—it’s really not that much, even if it all goes to primary research.* Cleantech, the cluster of industries that includes wind and solar, hydro, nuclear, batteries, electric cars, energy efficiency, software, and a host of services, is a massive, rapidly growing global industry. In 2014, about $100 billion was invested in wind energy alone, according to the Global Wind Energy Council. The U.S. Department of Energy loan program, which famously invested a few hundred million dollars in Solyndra, has less famously made $30 billion in loans, investments, or loan guarantees in the past several years. Much to the chagrin of short-sellers who have been betting against its stock, Tesla Motors has a market capitalization of $31 billion. Fortune 500 companies are using their balance sheets to conjure into being gigantic wind and solar farms so that their operations can run without emissions.

Sure, more money—and lots of it—is needed to scale up clean-energy technologies. But capital isn’t the real obstacle to a lower-carbon future. The technology that will allow for lower emissions and decarbonization is already here. It is being deployed, and it is becoming increasingly affordable. What’s missing are the government standards, incentives, and market frameworks that will encourage, prod, and require the private sector to create the necessary products and services.

Time and again in recent history, we have seen that when public bodies set higher standards—what kind of chemicals refrigerators can use, how many miles per gallon cars can get, the amount of toxic emissions power plants can produce, the percentage of electricity that must come from renewable sources—the private sector invests, innovates, and builds to meet those standards. It often does so at prices that are lower than critics believe possible. And in doing so, the private sector creates new businesses and business models.

Higher standards are already working their magic on a piecemeal basis. This fall California, which has a population of about 38 million (about the size of Poland), passed legislation mandating that 50 percent of the electricity provided by utilities in the state by 2030 must come from renewable sources, a requirement that will trigger a host of investment and innovation. Alberta, a large province in Canada that is home to a great deal of oil production, has just placed a tax on carbon. If China, already the largest car market in the world, were to seriously enforce its mileage standards, it would force automakers to develop and sell cars that are much more fuel-efficient. In the short term, the pull of these standards—telling businesses that if they want to participate in very large markets they have to make products that pollute less and use less energy—is much more powerful than the push of whiz-bang new technologies. Inertia will prevent homeowners from buying better insulation so that their homes use much less heating and cooling power. Telling builders they can’t get a certificate of occupancy for a newly constructed house unless it meets passive house standards would spark a revolution in construction.

If I had a few billion to spend on efforts that could lower emissions, I’d spend it on policy and politics. After all, the high-emission forces of inertia (coal, fossil fuels) are powerful and spend a lot of money to fight change. And they often succeed in watering down standards. More stringent standards—a carbon tax, limits on emissions, cap-and-trade regimes, renewable portfolio standards, standards for buildings, automobiles, and appliances—could unleash a huge amount of investment and spur innovation.

One billionaire has already demonstrated how this works. In 2013, Michael Bloomberg gave $50 million to the Sierra Club’s remarkably successful Beyond Coal campaign. Beyond Coal doesn’t invest in technologies to replace coal, or to capture emissions, or to make coal burn more clearly. Rather, it invests in public work—showing up at hearings, filing lawsuits, pressuring utility commissions and state and local legislatures. Time and again, it makes the public case for ironing coal out of the electricity supply. Thanks in part to more stringent federal standards and the availability of cheap natural gas, Beyond Coal has had a remarkable amount of success. Bloomberg’s $50 million investment in Beyond Coal has done much more to purge coal from the U.S. electrical system than a $50 million investment in wind research could have.

Many billionaires don’t like to get involved in the political and public policy process. It’s dirty and messy. But getting their hands dirty may be the most cost-effective and fastest path to a clean-energy future.

Read more of Slate’s coverage of the Paris climate talks.

*Correction, Dec. 2, 2015: This article originally mistated that $2 billion is two with seven zeroes behind it. It has nine zeroes. (Return.)