NEW YORK/WASHINGTON/LONDON – Bill Gates, the world’s richest man, led a group of philanthropists in vowing to plow $2 billion into clean energy through personal investments and a new fund to be set up next year.
Gates, co-founder of Microsoft Corp., will be joined by 26 private investors and the University of California in the so- called Breakthrough Energy Coalition, he said in a briefing Monday as United Nations climate talks begin in Paris. Other contributors include Africa’s richest man, Nigerian businessman Aliko Dangote; Alibaba Group Holding Ltd. Chairman and founder Jack Ma and Hewlett Packard Enterprise Co. Chief Executive Officer Meg Whitman.
When people focus on changing the world’s energy systems to eliminate carbon emissions, “the real question is what sort of premium cost is there?” Gates said. By directing “significant resources” toward research, “I get optimistic we can bring that premium down to zero and really solve the problem.”
The investors will collaborate with 20 countries, including the U.S., India, Saudi Arabia, China, Chile and the U.K., which together make up 80 percent of global clean-energy research and development. In the public component of the plan, known as Mission Innovation, each nation has vowed to double their budget for the sector over the next five years.
In making these investments, the coalition will “take the risks that allow the early stage energy companies” to bring their ideas from the laboratory to the marketplace, according to an emailed statement from the White House on Sunday.
The twin initiatives were announced Monday, the opening day of U.N. talks on climate change in Paris scheduled to run through Dec. 11. Some 150 world leaders, including presidents Barack Obama of the U.S. and Xi Jinping of China, attended the opening of the negotiations in what the U.N. billed as the biggest-ever single-day gathering of world leaders.
“In the past, too often energy technologies have not crossed the investment ‘valley of death’ where there was little funding to develop ideas because of the risk profile and long return time horizons,” according to the White House statement. “These additional resources will dramatically expand the new technologies that will define a future global power mix that is clean, affordable and reliable.”
The U.N. climate talks aim to produce an agreement that, for the first time, would bind all nations, rich and poor, to cutting pollution from burning fuels such as coal, oil and natural gas that’s blamed for a rise in global temperatures.
Convincing developing nations of the merits of phasing out fossil fuels remains a sticking point in the negotiations after years of preparation. Meanwhile, Republicans in the U.S. Congress have vowed to fight a deal that Senate Majority Leader Mitch McConnell, who represents coal-mining state Kentucky, called a “house of cards” that will punish low-income Americans.
Under the new funding plan, the U.S. commitment to clean energy technology would double to about $10 billion a year. U.S. Energy Secretary Ernest Moniz told reporters the administration will seek congressional support for the extra $5 billion.
“We know we’re going to have to drive down the costs of technology deployment and maybe even create some new technologies,” said Jake Schmidt, international program director at New York-based environmental group Natural Resources Defense Council, who has been briefed on the partnership.
The partnership won cautious praise from Bjorn Lomborg, the Danish author whose best-selling books have criticized government subsidies for renewable energy as costly and useless for fighting climate change.
Monday’s commitments “could be a game changer,” Lomborg, author of “The Skeptical Environmentalist,” said in an emailed statement. “For nearly a decade, I have argued we needed a focus on research and development. More than all of the hot air of Paris, this is what could finally help toward a solution to global warming.”
Gates, who has an estimated net worth of $84.6 billion, said his personal contribution to the initiative will be about $1 billion, with some flowing through the fund and some invested individually. “Hopefully I’ll see a few things that are so exciting that I’ll want to go beyond that,” he said.
Breakthroughs in solar technology and battery storage will be critical if developing countries are going to meet their energy needs while weaning off fossil fuels, said Jennifer Morgan, climate-director at the Washington-based World Resources Institute.
“It’s going to give the Paris negotiations a boost right from the beginning,” she said. “If we don’t get the technology right and moving fast enough in the right places, we won’t get there.”
The Breakthrough Energy Coalition will, over the next year, develop ways “to analyze potential investments coming out of the research pipeline, create investment vehicles to facilitate those investments and expand the community of investors who join us in this endeavor,” according to a statement emailed by the alliance on Sunday.
The coalition also includes Soros Fund Management LLC Chairman George Soros; Facebook Inc. CEO Mark Zuckerberg and his wife, Dr. Priscilla Chan; Richard Branson, founder of Virgin Group Ltd.; and Jeff Bezos, CEO of Amazon.com Inc.
“We’ll get more people to join, and so that number will go up from there,” Gates said.