A new €100m fund backed jointly by Bill Gates and the European Commission is to back technology innovation to help address the climate change challenge – with the investors ready to be patient while innovations grow.
Philanthropist Bill Gates has unveiled a new €100m fund to support technology innovation to tackle climate change. The Microsoft founder announced the move last week in his blog – stressing that renewable energy like solar and wind accounted for just 25% of the world’s greenhouse emissions.
Gates urged solutions to what he called “the 75% problem” –- with innovation also needed to help cut emissions in four other key areas: agriculture (24%), manufacturing (21%), transportation (14%) and buildings (6%).
“To prevent the worst effects of climate change, we need to get to zero net greenhouse gas emissions in every sector of the economy within 50 years,” he said. “As the IPCC recently found, we need to be on a path to doing it in the next 10 years. That means dealing with electricity, and the other 75% too.”
“Energy isn’t just what runs your house and your car. It’s core to nearly every part of your life: the food you eat, the clothes you wear, the home you live in, the products you use. To stop the planet from getting substantially warmer, we need breakthroughs in how we make things, grow food, and move people and goods – not just how we power our homes and cars.”
Gates is part of a group of investors in a high-risk private fund, Breakthrough Energy Ventures, putting over $1bn into helping promising companies “take great ideas from the lab to market at scale”. That fund is also backed by Amazon founder Jeff Bezos and Alibaba founder Jack Ma.
A new joint investment vehicle, Breakthrough Energy Europe, will serve as a pilot fund investing in European companies working on five ‘grand challenges’. The partners will commit €100m, half from the European Commission and half from BEV.
“This isn’t only about funding,” said Gates. “We’re creating a new way of putting that money to work. Because energy research can take years – even decades – to come to fruition, companies need patient investors who are willing to work with them over the long term. Governments could in theory provide that kind of investing, but in reality, they aren’t great at identifying promising companies and staying nimble to help those companies grow.”
Gates said the amount of funding supporting innovation had gone up by more than $3bn a year, with governments and the private sector “stepping up”. Mission Innovation had seen two dozen governments commit to doubling their spending on clean energy R&D.
The European Commission signed a memorandum of understanding on the Gates-backed project. “Breakthrough Energy Europe links public funding with long-term risk capital so that clean energy research and innovation can be brought to market faster and more efficiently,” it said.
The EC expects the new fund to operational by 2019. Its half of the equity will come from InnovFin, risk-sharing financial instruments funded through the EU’s Horizon 2020 research and innovation programme.
“I’m inspired by the ingenious inventors who are tackling climate change and all the partners who are supporting their work,” Gates blogged. “I hope this partnership is just the beginning. We need many more like this one around the world.”