A measure I call the Green Premium reveals where we can invest in climate progress for maximum impact.
It’s a foregone conclusion that the world will not meet the goals for limiting emissions and global warming laid out in the 2015 Paris Agreement. Many people want to blame politicians and corporations for this failure, but there’s an even more fundamental reason: We don’t have all the technological tools we need to do it, and many of the ones we do have are too expensive.
For all the progress the world has made on renewable energy sources, electric vehicles, and electricity storage, we need a lot more innovation on every front—from discovery to deployment—before we can hope to reach our ultimate goal of net-zero emissions.
But I don’t think this is a reason to be pessimistic. I see it as cause for optimism, because humans are very good at inventing things. In fact, we’ve already created many tools that are reducing emissions. In just the past 10 years, energy breakthroughs have lowered the global forecast for emissions in 2040 by 40%. In other words, because of the human capacity to innovate, we are on course to reduce emissions substantially by 2040 even if nothing else changes.
And I am confident that more positive changes are coming. I’ve been learning about global warming and investing in ideas to stop it for the past 20 years. I’ve connected with unbiased scientists and innovators who are committed to preventing a climate disaster. Ten years ago, some of them joined me in creating Breakthrough Energy, an investment group whose sole purpose is to accelerate clean energy innovation. We’ve supported more than 150 companies so far, many of which have blossomed into major businesses such as Fervo Energy and Redwood Materials, two of this year’s Companies to Watch. [Editor’s note: Mr. Gates did not participate in the selection process of this year’s companies and was not aware that two Breakthrough investments had been selected when he agreed to write this essay.]
