insight

AE Reads: Bill Gates’ Optimistic View of Climate Change Mitigation

September 27, 2022
Book Club
Climate Change for No Planet B

(Li-An Lim / Unsplash)

HOW TO AVOID A CLIMATE DISASTER
The Solutions We Have and the Breakthroughs We Need

At American Efficient, we constantly look for relevant, timely, and thought-provoking books, articles, papers, etc., from which to learn.  In service to that learning, we host regular book clubs that give us a space to connect, reflect and learn together.  To share some of that learning more broadly, we plan to occasionally post notes from some of the more exciting topics in this post.

First up: Bill Gates’ “How to Avoid a Climate Disaster”

Our typical book club is an hour-long, structured conversation. We divided this book into six sessions because Gates provides many opportunities to dig deeper. I’ll attempt to hit the “top of the trees” in this post.

Gates starts by detailing his path to climate change religion.  He cites some great authors and teachers, including Vaclav Smil, David MacKay, Richard Wolfson (“Earth’s Changing Climate”) and John Cox (Weather for Dummies), that helped him to conclude that three things need to happen to avoid climate disaster:

  • We must get to ZERO carbon emissions
  • We must deploy the solutions we have faster 
  • We must have new R&D breakthroughs

Some of the other books and writings we will cover in future posts don’t agree with all of these.  So far, everyone seems to agree on #2 though.  Here’s Gates’ case for each:

Why ZERO?

Two reasons: First, greenhouse gasses stay around for a long time, and the earth was happier (e.g., more stable and predictable weather) before the industrial revolution. Second, if the goal isn’t zero, figuring out who gets to emit would be politically challenging, which is compounded by the fact that the impact of climate change is lumpy (and lumpy in a way that is unrelated to the location of the emissions).

Why faster?

2° Celsius of average global temperature rise is much worse than 1.5° Celsius. We are already experiencing adverse effects, and it will only get worse faster, so the sooner we can develop, deploy and scale solutions, the better (or less catastrophic) things will be. At the current pace, by 2050, climate change will be as deadly as one covid pandemic per year and five per year by 2100.  Note that this book was released during the pandemic, so these numbers may be worth revisiting / refining. 

One of the most compelling pieces of support for going faster will be treated more comprehensively in a future write-up about Electrify  (by Saul Griffith).  As explained by Gates, the reason is that we need to increase electricity generation capacity to decarbonize drastically. This increase is required to support things like the electrification of transportation and heating. We know how to make carbon-free electricity to power a car, but we don’t know how to make a gas-powered car carbon-free. So, we need to electrify ASAP and build the electricity generation to support it. Gates says we currently add 21 GW of capacity per year in the US, which needs to grow to 75 GW of new electricity generation capacity per year.

Why are R&D breakthroughs needed?

Gates spends much of the book geeking out on technologies and approaches that captivate him. He’s a self-described technophile with an absurd carbon footprint. This context may be important for understanding his bias.  Techno-fantasy aside, Gates points out that Moore’s Law does not apply to most energy tech, politics are hard, and a nuclear solution scares us.  

The status quo technologies (like coal and gas power plants) continue to make economic sense for Africa and much of Asia, where they cannot afford green premiums and are desperate to jump-start industry.  Fossil resources are cheap because they have already benefited from mountains of R&D funding.  Gates argues that we need to aggressively and proactively change this reality so that the whole world can afford to participate.

Gates started Breakthrough Ventures to support those three urgently needed things.  Gates shares five questions they use to help sift through the potential investments and focus attention on what will have the most significant, most needed impact.  These contextualizing questions enable him to understand if there is real scalable potential.  For the uninitiated, CO2E stands for “Carbon Dioxide Equivalent.”  It is a method for taking all greenhouse gasses (not just CO2) and adding their impact into one metric.  Here are the five questions:

  1. With annual CO2E emissions at roughly 51 B tons/year, does the proposed solution have the potential to eliminate 1% (i.e., 500 M tons)?
  2. Are we considering all of the carbon emission sources, e.g., cement is responsible for roughly 10% of global CO2E?
  3. How much power are we talking about? A US home uses ~1kw. A small town uses ~1MW. A mid-sized city uses ~1GW. A big, rich country uses ~100GW. The world uses ~5,000 GW.
  4. How much space is needed for a given technology?
  5. How much is it going to cost? Are the “green premiums” low enough for middle-income countries to pay? This is key to Gates’ thinking.  His view is that low green premiums are areas for policy, whereas high green premiums are places for R&D.  The “green premium” is the delta cost between the status quo and the “green” alternative.  Sometimes, the green premium is negative (meaning the environmentally prudent choice is also financially prudent, even without including a carbon price).

The span of this book includes carbon consequences and solutions in:

  • Making things
  • Plugging in (electricity)
  • Growing food
  • Getting around
  • Refrigeration, heating, and cooling

The solutions discussed span from the tried and true (e.g. defense of nuclear, eating more plants, improving energy markets) to the speculative (e.g., direct air capture, hydrogen, artificial meat, geoengineering, fusion, electrofuels).  The latter category is what seems to excite Gates most.

In a sea of environmental despair, this book is a worthwhile read.  Gates masterfully contextualizes the scale of the various major contributors to climate change.  Even if you hate his solutions or his techno-fantasy orientation, he provides some excellent rules of thumb and provocative food for thought. He gets into a broader realm of solutions and problems than many similar books. He also shares a level of hope that’s hard to find in much of the current climate literature.

Luke Fishback is a Senior Director of Market Operations at American Efficient. He has worked in energy analytics since 2007 and was previously an aerospace engineer. Luke leads weekly Book Club sessions at American Efficient.