Combating climate change: Make green tech affordable for low- and middle-income nations

March 4, 2021 5:30 AM

The transition to clean energy will have to be driven by both governments and the private sector working together —just as the personal computer revolution was.

Bill Gates & Connie HedegaardBill Gates & Connie Hedegaard

By Bill Gates & Connie Hedegaard

This month, Bill Gates published his new book, How to Avoid a Climate Disaster: The Solutions We Have and the Breakthroughs We Need. An edited excerpt of a conversation between Connie Hedegaard and Gates:

Connie Hedegaard: You now powerfully and emphatically make the case for urgent climate action. You start your book by describing this journey. At first, it was “hard to accept that as long as humans kept emitting any amount of greenhouse gases, temperatures would keep going up.” It was only after returning to a group of climate scientists “several times with follow-up questions” that it eventually “sank in.” To what do you attribute your initial resistance, and how might your experience be applied to getting others on board?
Bill Gates: The world is in a very different place today than when I started studying climate change. We know more and have established more of a consensus about the problem. But it’s still hard for many people to accept that only reducing emissions, without getting on a path to zero, isn’t enough. It’s also hard to accept how much innovation it will take to get to zero—to fundamentally remake the energy industry, the largest business in the world. In the book, I make the case that persuaded me, and I hope it persuades others.

CH: The COVID-19 pandemic not only highlighted the costs of ignoring science, but also proved that rapid, large-scale behavioral change is possible, and showed that leaders who take responsibility for addressing problems can gain respect. But, as you point out, it also carried another crucial lesson: the relatively small (10%) reduction in greenhouse-gas emissions that global lockdowns produced showed that behavioral changes like flying or driving less are nowhere near enough. Are there other lessons we learned during the pandemic that apply to climate change? How can we best apply them to climate action?
BG: One lesson is the flip side of the idea that flying or driving less isn’t enough: We need a massive amount of innovation so that people can fly, drive, and otherwise participate in the modern economy without causing emissions. This is actually an even tougher challenge than making and distributing COVID-19 vaccines (which is the biggest public health campaign ever).

But it will take the same close cooperation among governments at all levels, and with the private sector as well. And just as we all have to do our parts by wearing masks and distancing, individuals also need to play a role in reducing emissions. They can advocate for policies that accelerate the transition to zero, and they can reduce the Green Premium by buying low- and zero-carbon products like electric cars and plant-based burgers.

CH: As you note, however, “innovation is not just a matter of developing new devices. It’s also a matter of developing new policies so we can demonstrate and deploy those inventions in the market as fast as possible.” The European Union (and now also China) has started to engage in such policy innovation.

In an effort to correct a flawed incentive structure that fails to take into account what you call “Green Premiums,” many European countries have introduced mechanisms for taxing CO2 emissions, resource waste, and pollution. Are such policies shifting the incentive structure in a meaningful way? Would a carbon border-adjustment mechanism help to drive progress?
BG: Putting a price on carbon is one policy that will make a difference, as part of an overall approach where the goal is to increase both the supply of and the demand for clean-energy breakthroughs. I mention a wide range of other ideas in the book. For example, one thing governments can do to expand the supply of innovation is to expand funding for clean-energy R&D dramatically. (I recommend a five-fold increase.) On the demand side, in addition to a carbon price, it is things like standards for how much electricity or fuel must come from zero-carbon sources.
We need to turn the world’s policy and technology IQ to eliminating emissions.

CH: You emphasise that the moral case for climate action is just as strong as the economic case, because climate change disproportionately harms the world’s poorest. But climate action also has distributional implications. As you acknowledge, even the very low Green Premium for decarbonizing America’s entire electricity system might not be affordable for low-income households, and developing countries are in a far weaker position to bring about such a transformation at all. How can these challenges be overcome? Does your work deploying other technologies in lower-income settings hold relevant lessons?
BG: This is a hugely important topic. Low- and middle-income countries are going to be using more energy in the coming decades as they rise out of poverty. We should all want that energy to be clean – but they’ll only commit to using clean energy if it’s as cheap as fossil fuels are today. So, if you’re a leader in a rich country, you should be asking yourself what your government or company is doing to make it affordable for the entire world— including middle-income and eventually low-income countries— to go green. The expanded investment in R&D and other policies need to be aimed at this goal. Many of the companies I’m investing in are working on ideas that would be affordable in lower-income countries.

CH: You are among a number of business leaders who now publicly recognize government’s critical role in any massive undertaking. Even among such undertakings, climate change stands out. Will meeting the challenge require a greater role for the public sector—in general or in a particular area—than even the most pro-government voices are used to?
BG: The transition to clean energy will have to be driven by both governments and the private sector working together —just as the personal computer revolution was.

It will mean a greater role for government, but only because that role has been relatively small so far. Take the five-fold increase in public-sector R&D we discussed earlier. That increase would put clean-energy research on par with health research in the US. And just as we have the National Institutes of Health to oversee and coordinate that work, we should create the National Institutes of Energy Innovation (NIEI) to avoid duplication and make the best use of these resources. An Institute of Transportation Decarbonization would be responsible for work on low-carbon fuels. Other institutes would have similar responsibilities and authority for research on energy storage, renewables, and so on.
The NIEI would also be responsible for coordinating with the private sector. The goal would be to have research coming out of national labs that leads to breakthrough products that get to market at a very large scale. We need policies that speed up the entire innovation pipeline, from early research to mass deployment.

CH: At one point in the book, you write that, “Beyond finding ways to make materials with zero emissions, we can simply use less stuff.” Some would argue that capitalism depends on consumption —the more, the better. Does a true solution to the climate crisis depend on a new vision of capitalism for the twenty-first century? Could, say, a new, more qualitative understanding of “growth” form the foundation of such a system?
BG: I do think people in the rich world can and should cut back some on their emissions. (As I mention in the book, I’m taking a number of steps to reduce and offset my own emissions.) But energy use is going to double worldwide by 2050, driven by significant growth in low- and middle-income countries. That growth is good in the sense that it means people are living healthier, more productive lives. But we need to do it in a way that doesn’t make the climate problem harder to solve. That’s why we need innovation that makes it cheap enough for everyone around the world to eliminate emissions.

Copyright: Project Syndicate, 2021
www.project-syndicate.org

Gates, founder & technology adviser of the Microsoft Corporation, is co-chair of the Bill & Melinda Gates Foundation. Hedegaard served as European Commissioner for Climate Action (2010-14), and as Denmark’s minister for the environment (2004-07) and minister for climate and energy (2007-09)

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