Bill Gates on his high-risk climate investments, and spurring innovation to save the planet

Bill Gates’ new book, “How to Avoid Climate Catastrophe,” is out Tuesday. He spoke to GeekWire prior to the release. (John Keatley photo)

Breakthrough Energy Ventures hit the headlines last month with news that the fund raised an additional $ 1 billion to invest in promising, scalable solutions to climate change.

At the same time – and with less attention – the Bill Gates-led initiative has expanded to include new programs designed to help unleash other levers that support innovation and adoption of clean technologies.

Breakthrough Energy Ventures, which began as a promise at the UN climate negotiations in Paris, has grown into an umbrella organization called Breakthrough Energy. It includes the VC Fund as well as BE Catalyst, BE Fellows, BE Sciences, BE Policy and Advocacy, as well as BE Ventures Europe and BE Solutions Canada, which include partnerships between governments, companies and investors.

In a recent GeekWire interview with Bill Gates about his upcoming book, How To Avoid Climate Disaster, we discussed Breakthrough Energy’s progress and goals.

The initiative is in line with the concepts of the book: In order to implement environmentally friendly technologies and reduce greenhouse gas emissions to zero by 2050, there must be innovations that lower the price of the new technology and reduce the so-called “green bonuses” from Gates. This requires investment in research and development, government action to support the technology, and the creation of reliable marketplaces to buy the technology.

Listen to the full conversation in the podcast above or subscribe to GeekWire on any podcast app and read on for excerpts on climate investing.

Gates to fundraising for climate investments: “I spoke to many philanthropists today about how they can give either by breakthrough or alone. I’m talking to Jeff Bezos, we’re going to do some things together. He’ll obviously do a lot of things on his own, which I appreciate.

Breakthrough energy is an umbrella. The first really big piece was this Ventures piece and part of the reason I’m so ambitious about these other pieces now is because it went so well. I mean literally for the second fund, I didn’t have to make a single phone call to raise the fund. Enough people have volunteered to join new ones and enough people have stayed so that we can make well over $ 1 billion without my distraction.

I spend my time with this science team talking about the companies, the political things that are helping these companies, what kind of demonstration projects the companies would like to see to move us forward, and figuring out the right partnerships there. “

Gates explained the creation and structure of BE Ventures, which have an unusual “patient capital” approach that invests over a 20 year period as opposed to the traditional goal of a return on investment within five years: “I am ready to finance very risky things. I have a great technical team at Breakthrough Energy Ventures. Lots of ideas come in, many of which don’t look that strong, but we’ve found over 40 companies that can be funded in this first fund. It’s better than I expected.

The list of potential investments for the second fund, announced a few weeks ago, is very extensive and the quality of these investments appears to be as good as that of the first fund.

I was very concerned when I made a commitment in 2015 as part of the Paris Talks where countries agreed to double their R&D budgets for energy. My part of the business was creating something that wasn’t a typical company, but something co-ordinated and 100% climate change-focused deep management team, a very deep science team, far more than any venture company ever had in its scientific skills and yet aimed only at companies that can have a dramatic impact on climate change. It’s a very new construct. “

How the success of BE Ventures led to BE Catalysts and BE Fellows, a program that sounds like an incubator funding promising researchers: “Partly because [Venture] went so well, so at an earlier point I’m adding a thing called fellows where we fund and give people gifts before they’re ready for seed funding.

And then this thing called the Catalyst, which is about the demand for innovation – not just the supply of innovation – that buys things with high green premiums, but therefore creates a market and starts it on the learning curve [lowering the costs].

We hope to be able to understand what happened to wind, solar and lithium-ion batteries for passenger cars for all of these product areas. “

How personal experiences highlight the need for BE Catalysts, which funds commercial demonstration projects and brings together developers, buyers and financiers: “Catalysts come from the fact that I wanted to reduce all of my emissions [to offset his carbon footprint] – like buying green aviation fuel and buying direct air sampling from people like Climeworks – there really is no catalytic funding. So I became the biofuel supplier’s biggest customer and I realized boy we’re going to need a lot more buyers to get this thing on the learning curve like Germany and Japan did for solar.

The Catalyst Version Zero was my purchase of my emissions, not just in a brute force way, but in a way that advances technologies that can cost very dramatically.

How BE Catalyst Can Support Government Investment and Policy: “[It’s] Helping governments identify which of their green hydrogen or green cement projects at a given price are actually deadlocked and which are really on the way to being cheap enough to get low green premiums.

We have a deep level of expertise that governments generally don’t see all of the things that are going on in the rest of the world. [Catalyst can help create] kind of a master plan of all of the various efforts that bring in some cash to get a seat at the table and accelerate that effort.

Catalyst is new – we’ll get governments and businesses on board. One day we might say to consumers, “Hey, are you ready to pay hundreds of dollars for something that gets your emissions off your emissions in this very catalytic way by getting products on the learning curve.” We haven’t gotten to the point where we do that. “

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