Bill Gates on climate change: Thinking big, and down to earth

The title of Bill Gates’s new book is self-explanatory: How to avoid a climate disaster: The solutions we have and the breakthroughs we need. I think it could have been called Climate change for dummies. And that is not an insult: like the books in that series, this is a well-written, thoughtful, and broad review of the subject. Gates doesn’t duck the tough questions, such as cost and feasibility, and he occasionally deploys a pleasing self-deprecation, such as when he comments on visiting power plants as an ideal father-son activity. Really.

Back in 2016, I looked, generally favorably, at Gates’s ideas on energy. Since then, he has spent a ton of time thinking hard about this, and climate issues in general. I don’t agree with every word in the book—who would? But I do think he presents a solid, fact-based analysis of what climate change is, why it matters, and what could be done about it.

Here are a few of the big themes.

It won’t be easy. Right now, the world emits about 51 billion tons of greenhouse gases (GHGs)  a year. Getting to zero is a tall order. As Gates notes, it will mean changing “virtually every activity in modern life.” He dismisses the idea of getting there by 2030 as impossible, but thinks if we set in motion the right policies now, it is possible to create the momentum to get there by 2050, at least in rich countries.

So the scale of the proposed effort is huge. What makes getting there even more daunting is that it is important to deal with climate change without hobbling efforts to improve human life through economic growth. The link between energy and prosperity is deep and profound; keeping billions of people poor is not an option that they or anyone else can accept. I think Gates has it right when he notes: “We can’t expect poor people to stay poor because rich countries emitted too many greenhouse gases, and even if we wanted to, there would be no way to accomplish it. Instead, we need to make it possible for low-income people to climb the ladder without making climate change worse.” 

Think of it this way. Due to COVID-19, global GHG emissions dropped about 5 percent in 2020—to roughly 48 billion tons. But does anyone want to pay the price the world has paid, in lives and livelihoods, for that level of reduction? The question answers itself. And the awful experience of the pandemic shows just how big the problem is: it took a global catastrophe to reduce emissions just 5 percent. Fiddling at the margins is not going to get anywhere near zero.

But it’s not hopeless. There are many things, large and small, that governments, industry, and individuals can do, and Gates devotes a chapter to that. Companies can impose an internal carbon tax to create incentives to find cleaner alternatives and get a sense of the price of their emissions; they can also set and publish goals for emissions reductions and help innovators turn ideas into products and services. Families can give up meat once or twice a week and turn down the thermostat; more affluent ones can sign up to pay a little more for green power and make an electric vehicle their next car. Governments can do more basic research in clean-energy technologies. Everyone can get off their high horse and listen to arguments that they may not agree with. You might not change your mind—or theirs—but you almost might learn something. Gates quotes Hans Rosling, a health expert: “When we have a fact-based worldview, we can see that the world is not as bad as it seems—and we can see what we have to do to keep making it better.”

There will be trade-offs. Too often, an argument goes something like this: investing (for companies) or spending (for governments) on green solutions will not only mean a better environment but more jobs and profits. Win-win all the way. Except that is not always true. There are costs as well as benefits to most changes, and certainly to one as big as getting to net zero. Higher gas prices, for example, probably would reduce consumption. But it would also burden people who need to drive and don’t have a ton of spare cash. Using less coal has all kinds of benefits, but it is hard on communities who have been reliant on it for generations. Is it better to get kerosene or gas generators to families who are now cooking over indoor fires (and dying prematurely, by the millions) or to wait for renewable alternatives? These are real questions affecting real lives, and pretending otherwise is not useful. All through the book, Gates mentions what he calls the “Green Premium”—meaning the extra cost of cleaner technologies. He argues that it is essential to lower these premiums, or eliminate them altogether, so that middle-income and poorer countries can afford to pay for decarbonization. Otherwise, they won’t. The trade-off doesn’t work for them.

Think widely. Wind and solar are getting bigger, better, and cheaper. For the last two years, wind has been the largest single source of new power generation in the United States. Yet, for all that, these two still account for only about 6 percent of global primary energy consumption. And making electricity itself only accounts for about 27 percent of GHGs. So, while discussion of climate change often seems to revolve around power, that is too narrow a framework. There is another 73 percent of emissions to address—in making things (31 percent); growing things (19 percent); getting around (planes, trains, automobiles, etc); and keeping warm and cool (7 percent). Indeed, one of the most interesting parts of the book is about some of the technologies Gates finds promising. In addition to the usual suspects, Gates discusses outliers like direct air capture and geo-engineering. I get the sense that, wearing his geek hat, he’s a fan of these options. But wearing his sober climate thinker hat, he’s dubious. So he spends a lot more time on things like zero-carbon cement processes, cultivated meat, heat pumps, smart glass, plant genetics, and liquid fuels.

Consider risk. It’s a true truism that people are bad at evaluating risk. For example, nuclear energy is unpopular in many places because of its perceived risks. But year in, year out, coal mines kill many more people than in the entire history of nuclear power—316 people in China alone in 2019, a figure that was actually historically low. (In 2005, the figure was almost 6,000). And that doesn’t include premature deaths due to poor air to which coal contributes. By contrast, when the tsunami and earthquake damaged the reactor cores at the Fuksuhima nuclear plant in 2011, the scariness of it was a major factor in Germany deciding to shut down its nuclear fleet. But only a single person died because of the nuclear accident. Indeed, considered in relation to output, Gates presents a chart that shows nuclear is about 7 times less deadly than biomass. The point, says Gates (and I agree) is not to stop nuclear but to solve the problems that led to accidents such as Fukushima (and of course Chernobyl and Three Mile Island). This can be done; Gates notes that cars kill many people every year, but we don’t stop using them. Instead, they have become much safer. This matters, because nuclear is the only no-emissions form of baseload power available.

There are other ways in which risk is mis-evaluated. For example, financial markets generally do not price climate risk in their evaluations, nor do most governments most of the time. Doing so, says Gates, is not only a good thing in itself, but provides measurable benefits. He estimates that investing $1.8 trillion by 2030 in five areas—early-warning systems, climate resilient infrastructure, crop yields, water, and protecting mangroves--would bring more than $7 trillion in benefits. Look at it this way: if the world had truly evaluated the risks of a pandemic, would it have acted differently? Another question that answers itself.

Innovation is the answer. In a sense, everyone knows this already. Getting to near or net-zero with current technologies and processes isn’t going to happen. But the way Gates addresses the subject is interesting. He writes about the need to both expand the supply of innovations and also the demand for them. The two need to go together—a simple but profound thought. In practice, what does that mean?

For a start, to increase spending on climate-related research sharply, and to make big bets on what could be big breakthroughs—another simple idea, but an important one. Game-changers are, by their nature, not obvious. So while making solar power more efficient is good, for example, it’s incremental and won’t bend the climate curve. Gates makes the comparison to the Human Genome Project, which took more than a decade and a ton of money from half a dozen countries—and is leading to breakthroughs in a wide array of health conditions. No private company could have done it, or would have. Clean energy and other clean technologies need the same kind of approach.

How can policy promote innovation? One way is through encouragement; governments can use their buying power to give products a shot. Another is through policy, such as clean fuel standards. And a third is through the price signal—meaning putting a tax on emissions. These kinds of ideas do not get people’s pulse racing, but I think Gates is right that a coordinated, market-oriented approach could have powerful effects on both the supply and demand for innovative clean technologies.

There’s more, but you get the idea. If you want a concise and readable volume on climate change, the book works. 

All views are mine and not those of McKinsey & Company.