In an extensive interview in the November issue of the Atlantic, Bill Gates shared his thoughts on climate change with the discussion focused largely on energy solutions that could help curb greenhouse gas emissions.
Bill Gates participates in the "Investing in Prevention and Resilient Health Systems" plenary session at the Clinton Global Initiative 2015 Annual Meeting at the Sheraton New York Times Square Hotel, on Sunday, Sept. 27, 2015 in New York. (Photo by Greg Allen/Invision/AP)
Gates, the billionaire co-founder of Microsoft who is considered the richest man in the world, said he thinks the focus needs to be on research and development, and he doesn't necessarily think the private sector and the free market are the answer.
"Well, there’s no fortune to be made," Gates told the Atlantic of why he doesn't think the free market will drive the development of new energy at the speed he thinks we need it.
"[T]he incentive to invest is quite limited, because unlike digital products—where you get very rapid adoption and so, within the period that your trade secret stays secret or your patent gives you a 20-year exclusive, you can reap incredible returns — almost everything that’s been invented in energy was invented more than 20 years before it got scaled usage," Gates explained. "So if you go back to various energy innovators, actually, they didn’t do that well financially. The rewards to society of these energy advances — not much of that is captured by the individual innovator, because it’s a very conservative market. So the R&D amount in energy is surprisingly low compared with medicine or digital stuff, where both the government spending and the private-sector spending is huge."
Later in the interview Gates applauded the government's R&D budget management:
But as I’ve really dug into it, the DARPA money is very well spent, and the basic-science money is very well spent. The government has these “Centers of Excellence.” They should have twice as many of those things, and those things should get about four times as much money as they do.
Yes, the government will be some-what inept—but the private sector is in general inept. How many companies do venture capitalists invest in that go poorly? By far most of them. And it’s just that every once in a while a Google or a Microsoft comes out, and some medium-scale successes too, and so the overall return is there, and so people keep giving them money.
Gates also told the Atlantic that he believed "the climate problem has to be solved in the rich countries."
"China and the U.S. and Europe have to solve CO2 emissions, and when they do, hopefully they’ll make it cheap enough for everyone else. But the big numbers are all in the developed economies, where China’s defined into that term," he continued.