Bill Gates Has a Plan for Climate Change
This week, we talk about Bill Gates’s plan to tackle climate change and how the GameStop mayhem burned some amateur investors.
Welcome to our weekly chat about the environmental and social issues that influence the way we work, spend our money and live our lives. We're your hosts, Maitane Sardon and Dieter Holger. Want to get our newsletter every Wednesday? Hit the subscribe button in the upper right corner and please share with your friends!
Hi, Maitane! Billionaire Microsoft founder Bill Gates is known for sounding alarms about the potential for a global pandemic years before the coronavirus. He also has a plan for climate change.
He’s actually quite optimistic about the tools at our disposal to reach net-zero greenhouse gas emissions by 2050. Still, he warns that electric cars, solar panels, lithium-ion batteries and vegan burgers won’t be enough. There also isn't enough land to plant enough trees to absorb all the carbon dioxide going into the air, he says.
That is why massive investment in research and development is needed to cut emissions beyond agriculture and electricity to all carbon-spewing areas, such as concrete and steel, he says. For example, green steel made without coal needs to be invented.
Gates helped found Breakthrough Energy Ventures and Mission Innovation for this reason, bringing together 28 billionaires and 20 countries that pledged to double clean-energy research and development spending in 2015.
It won’t come cheap. It costs at least $200 to remove a ton of carbon dioxide from the atmosphere, but Gates says that can be brought down to $100 a ton. He estimates that would require $5.1 trillion of spending a year, or 6% of the world’s GDP, but says that is much cheaper than shutting down whole parts of the economy like the coronavirus pandemic did.
To understand how zero-carbon tech can replace carbon-intensive processes, Gates proposes something called the “green premium,” which explains how much more the new tech costs. One example is green aviation biofuel that is sold at an average of $5.35 per gallon, a green premium of more than 140% over standard jet fuel.
As I wrote last week, despite the high cost of biofuel, some companies like United Airlines are experimenting with this cleaner alternative. One of the world’s top suppliers of biofuel is Royal Dutch Shell, which has signed deals with Amazon.com. and logistics company DHL to provide fuel for their cargo planes.
Gates is also fond of nuclear power, which provides a constant source of zero-carbon energy without pause due to the weather, unlike solar and wind. He co-founded Terrapower, a startup that has redesigned nuclear reactors so they can recycle nuclear waste.
There are concerns that Gates’s approach concentrates the effort and rewards of such initiatives on a handful of billionaires and will only enrich them. Gates says he understands society’s distrust of billionaires but that they won’t get their money back for more than a decade given the high risk of such investment.
His projects are promising and we’ll watch if they spur more investment. Now let’s look at the fallout from the GameStop market mayhem: Some amateur investors got burned.
A 25-year-old security guard even took out a $20,000 loan to buy GameStop shares. Then the shares plunged nearly 80%, leading to more than $15,000 in losses. He says he still plans to hold onto the stock since he hopes the video game retailer will eventually turn the corner.
Perhaps fortunately, he didn’t dip into his $50,000 in index funds to buy GameStop. Index funds often have low fees and are less risky than individual stocks since they invest in a basket of different stocks or bonds.
It’s a cautionary tale about playing in the market in the age of stock-trading apps and frenzied discussion in online communities. Another thing I am watching is how Dogecoin, a cryptocurrency initially created as a joke, has climbed more than 900% this year after Elon Musk and other celebrities generated hype online. Records kept by Bitinfocharts show one person, or entity, owns 28% of all the Dogecoin in circulation—about $2.1 billion at current prices.
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Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy