The investments behind Bill Gates's climate pivot

Plus, European Union rejects last gasp attempt to push through a climate reporting bill

In today’s edition:

— Bill Gates’s climate pivot made headlines this week, but he still invests in climate change. Here are a few of his favorite opportunities.

— European Union sends sustainability bill back to drawing board after both sides protest

— As the world nears several climate tipping points, PBS explores just what that hot-button term means

— Exxon sues California over corporate climate reporting rules

— Europe’s carbon sink has weakened, but it’s still making more progress than anywhere else

QTS’s Phoenix 2 data center campus, under development in Arizona. Photo: QTS.

Bill Gates made headlines again this week with a controversial blog post advocating three truths about fighting climate change, the most important linking advances in human welfare — such as fighting malaria and malnutrition — to mitigating climate change.

The memo, coming six months after the tech pioneer’s Breakthrough Energy Ventures cut jobs in the face of the new Trump administration’s war on renewable energy, was seen as a “pivot” by Gates away from climate change. But Gates took pains to show that tremendous progress is still being made. He outlined five areas of investment (along with promising companies) Breakthrough is making that could still achieve his vision.

Those areas, overlooked in the political analysis of his pivot, were electricity, transportation, manufacturing, agriculture, and buildings, which Gates said combined represent most of the harmful carbon emissions that need to be eliminated to mitigate global warming. He said Breakthrough only focuses on areas where the so-called green premium — the cost of doing something clean vs dirty — is still very high, unlike something like solar energy, which is already cheaper than fossil fuels.

It’s a classic investment strategy designed to give investors the biggest bang for their buck if it succeeds, and Gates names almost three dozen companies Breakthrough has invested in those areas, along with the size of the green premiums, or the opportunity for investors.

Hot button ones such as carbon capture and nuclear fusion are in there, along with geothermal energy, battery power, and nuclear fission, where Gates is a big proponent of small modular reactors (SMRs).

But some of the more interesting new ones we identified include more efficient electric power lines, such as TS Conductor or VEIR, which can send dramatically more energy from utilities to customers without having to build more lines. That’s something that could be a huge play in the data center space that has captivated everyone’s attention (photo above).

Another idea is geologic hydrogen, a natural hydrogen found in the earth that would cause less emissions than making our own hydrogen with electricity and water. Companies working to find efficient ways to extract that hydrogen include Koloma, Mantle8, and Electric Hydrogen, according to the memo.

Finally, Gates goes back to the problem of jet fuel. With emissions from airline flying projected to double by 2050, he said airline transportation still carries a green premium of 100%. He admits companies are only just starting to make headway here, and he offers no investment ideas.

We note that the so-called pivot comes as clean energy stocks are in their biggest rally in years, even as the White House seeks to switch everyone back to fossil fuels. Far from a pivot, Gates’s note seems to use a logical reminder that fighting climate change is indeed all about human welfare and seeks to keep us excited about the fight.

If you have ideas or suggestions for us, contact me directly at
dcallaway@callawayclimateinsights.com.

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