It’s a noble goal and one that the nearly two-dozen billionaire investors say is real: the revolution of energy sector to include breakthrough technologies that will radically reduce carbon emissions and attract additional capital.
At a conference call on Monday, Breakthrough Energy Ventures revealed that it has raised more than $1 billion to fight climate change and to address emissions from electricity, transportation, agriculture, manufacturing and buildings. It’s a 20-year fund the will take the long view and that has a lofty goal of reducing greenhouse gas emissions by a half-gigaton a year.
“We are more limited by the number of companies there are than the funds we have available,” says Microsoft founder Bill Gates, on the conference call. “We feel good that if we have the ideas available, we can get the money.”
He was joined on Monday by John Arnold, John Doerr, and Vinod Khosla, all venture capitalists with a stake in the fund. Others not present include Jeff Bezos, Richard Branson, George Soros, Mark Zuckerberg and Michael Bloomberg.
The genesis of the idea began a year ago in Paris when Bill Gates announced an effort to help developing countries gain access to the types of technologies that could help them reduce their carbon emissions.
Will the new administration coming to Washington change things up? After all, it has a very different purpose than that of President Obama’s team. Gates said that while Trump’s team may be less interested in the emissions component of it all, it can still be sold on the job creation aspect.
But Gates said that this is about much more than government funding — that private investors are integral to the facilitation of clean energy technologies. The private sector, he said, can get these ideas out of the lab and into the market.
What ideas? Things like solar panels and wind turbines have come along way, having seen their prices fall precipitously — something that has led to their growth not just in the United States but around the world. But other technologies such as energy storage and carbon capture have been more difficult to see through to fruition. They need an added push.
One of the aims of the fund is to invest a few million on promising technologies to essentially test the waters. As Gates says, this is more doable when it comes to things like energy storage but it is less feasible when it comes to such ideas as nuclear fission and fusion.
“If we can effect emissions, the financial returns will follow,” notes John Arnold, on the conference call. Ultimately, “The demand for these products is not dependent on a subsidy.”
“This fund has the long view,” adds Vinod Khosla.” We can afford to “be patient and take larger risks than most investors might.”
As noted, the Breakthrough Energy Venture is a byproduct of the Paris accord held last year in Paris. At this point, nearly 200 nations have signed on to to the non-binding accord, which aims to keep global temperatures from rising more than 2 degrees Celsius by mid century.
Generally speaking, the developed world says that it will provide $20 billion to the less-developed countries to help finance their clean technology investments. That’s in addition to the assistance that the fund led by Gates.
To that end, man-made climate change, in reality, is largely a function of Western industrialization. And now those richer countries are asking such nation’s as China and India to clamp down on their use of coal, which is abundant and inexpensive relative to their other fuel options.
While India also has plans to roll out more solar, wind and hydro-electric energy, it needs financing from the West to do so — and to keep a lid on its carbon releases after 2030. China, meanwhile, has an aggressive plan to wean itself from coal and to increasingly rely on nuclear power, as well as renewable energies. If the United States were to back out of the Paris accord, China says that it stands ready to help the effort.
The goal of the Breakthrough Energy Venture is to find and to fund those entrepreneurs with the products to create a low-carbon future — one that can bolster corporate America’s brand and its bottom line. While most venture capitalist expect quick returns, these investors can afford to wait it out. That includes not just the technical hurdles to success but the changes from one government to another.