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A conversation with the billionaire climate investor in Dubai.
Eight years ago, at the Paris climate convention, Bill Gates committed $2 billion to fighting climate change.
You have to admire his ROI. Since then, Breakthrough Energy, the set of Gates-linked climate groups, has become ubiquitous on the topic. It invested in dozens of climate-tech startups, and Gates personally lobbied for the passage of the Inflation Reduction Act.
Gates has also come to formulate a big idea: the “green premium,” the gap between the cost of a fossil-fueled technology and the cost of a climate-friendly one. Right now, electricity generation has almost no green premium, for instance — solar power is dirt cheap — but steelmaking’s green premium is very high. Only when the world gets green premiums down to zero for every economic activity, Gates argues, will it be able to seriously solve climate change.
I had a few minutes to chat with Gates on the sidelines of COP28, the United Nations climate conference in Dubai, about green premiums and what we were doing in Dubai in the first place. Our conversation has been edited for length and clarity.
Well, there’s a lot of good things that happen at COP. Remember that there are many sectors that make up the solution. Small, innovative companies — and Breakthrough Energy has 30 [startups] here, I bet you there’s 70 others — they need big companies, they need government policies, and they have booths here. And they give people a sense: Oh, there is a new way to make steel. Well, how quickly can that be adopted? How quickly do you get the green premium down to zero? Are my steel companies and my company engaged in this? What do they think? It keeps the pressure on.
Obviously, there is no coercive mechanism here. So solving global problems — given that you don’t have world government — maybe you need meetings of 70,000 people to try and say, “Hey, come on, everybody, let's do this together.” You know, anti-climate people say, “Hey, why should the U.S. make sacrifices? Because if the U.S. alone does this, or even U.S. and Europe, the [effect on global average temperature] is very, very small and it’s not worth doing.”
Climate is so complicated. To really understand climate, you’d have to be a physicist, a biologist, an atmospheric scientist. People who are polymathic love the subject, because it allows you to say, “Oh, I’m reading a book that’s going to help you understand climate” — and almost any science book you can justify.
So getting people to understand a little bit more about climate … this is an atmosphere that the bias is toward exaggerating the impact of climate, but oh well. Maybe the signal gets muted when it gets out to the other 7 billion, and so we have to kind of, you know, overdo it here so at least it gets some resonance.
The political situation is that about 40% of voters are like, “Wow, I didn’t know my lifestyle was going to be reduced because of this. Isn’t there some rich guy or some other country or someone else who should be paying for this electric heat pump, or paying more money for their gasoline because of your carbon tax?”
Washington State has a carbon tax, which is kind of unusual in that it’s been focused on gasoline, so it’s actually raised the gasoline price. We have a referendum [to overturn the law in the works] — it’ll be interesting to watch.
Even in Europe, who you’d have to say is the most climate-committed region of the world, they have very few political parties — although maybe the one just won the Netherlands elections is one of them — who are like, “Hey, screw all this, let’s do nothing.” But even there they have to be careful because the elites‘ commitment to climate greatly exceeds the general voter’s. So when Macron puts on his diesel tax, that lasted about three months, because the rural people who are less well-off than the urban people said, “Oh, this tax is targeted at us. You’ve lost touch.” And then a whole movement gets created around that, and he pulled the diesel tax really quickly. And compared to the carbon tax that you should have on diesel, [Macron’s diesel tax] was like a tenth of the increase.
So, you know, the 70,000 here aren’t — it’s like the Republican primary, it’s not a representative set of people. For me, you know, I only have one hammer, which is innovation, whether it’s software, global health, or climate. I’ve never seen a problem that innovation can’t solve, which is a caricature, but that’s where I add value. It’s organizing the capital and the teams and the goals. It’s fantastic how much progress we’ve made in eight years.
It’s going super well. They’ve got [former White House chief of staff] John Podesta [leading the effort], who’s here helping to try and make sure it goes faster than normal. We fund groups that are helping with IRA implementation. There’s various philanthropic things we’ve done in support of getting the IRA to move quickly — so that, like Obamacare, maybe it’s more popular four years after it passes in red states than it was the day that it went through on a purely partisan vote.
Some people have estimated the cost of these tax credits at way beyond what they were scored. I think they’re wrong, because their EV number was insane — that Goldman Sachs, $1.2 trillion thing. But the Congress is there if a tax credit over-succeeds. They can — at year four, five, six — cut it back or eliminate it.
Right now, companies are responding to the IRA incentives. But you know, if you get Trump elected, and he really gets rid of it, there’s a lot of business plans that will [make people] feel foolish. And then for the future, it’s going to be very tough. Because even if the Democrats come in and put something new in, people say, “Well, you’re asking me to make a 30-year investment. And half the time, I’m stupid.” So that could be quite damaging that it’s so unpredictable.
I’ve said very clearly that, unless you get green premiums to zero, you’ll never get adoption in the middle-income countries. The low-income countries are small numbers, and you can subsidize them — maybe, in some cases, you should. But [you can’t] in the middle-income countries — that’s India, China, Brazil, Vietnam. You know, humanity lives in middle-income countries, and thank God, it’s the opposite of what it was in the 1960s, when there were almost no middle-income countries and there was this rich, Europe-U.S. piece.
So yes, we have to make solar, fission, fusion, storage, cement, steel, beef — we’ve got to make them at, ideally, negative green premiums, but at least at zero green premiums. Otherwise, you never get adoption.
Now, technology can go through a period where it has a green premium. And then you’re asking rich countries, rich companies, rich people to create the demand signal to get on the learning curve, like was done with solar. Breakthrough [Energy] only works on technologies that, once they’re down the learning curve, have zero or negative green premiums. At the Paris talks, there was almost no focus on the hard to abate areas. Even though it won’t achieve 1.5 [degrees Celsius of warming] and probably won’t achieve 2 [degrees Celsius], the fact that we kicked that off, and there are more companies than I would have expected with cool ideas — many of which will fail, you know — that’s more than I thought we’d have eight years ago.
Rhodium is not assuming there’s a cheap fission reactor. Once you get to 2060, predicting the costs of things… I mean, even fusion. We will probably have extremely economic fusion by then.
Editor’s note: This article was updated after publication.
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Breakthrough Energy is winding down its policy and advocacy office, depriving the Inflation Reduction Act of a powerful defender.
A major chapter in climate giving has ended.
Breakthrough Energy, the climate philanthropy organization founded by Bill Gates, is closing its policy and advocacy office and has laid off much of its staff in Washington, D.C., Heatmap News has learned.
The layoffs will effectively gut an organization central to the effort to enact the package of clean energy tax cuts passed during the Biden administration. They will also silence one of the few environmental nonprofits that supported nuclear energy, direct air capture, and other new zero-carbon energy innovations.
More than three dozen employees across the United States and Europe are affected by the layoffs, including the office’s senior leadership.
The layoffs, first reported by The New York Times, come amid a wider billionaire pullback from donating to climate causes. The president and CEO of the Bezos Earth Fund departed last month, and the fund has yet to name a permanent replacement. Gates had already significantly diminished his climate giving earlier this year, slashing Breakthrough Energy’s grantmaking budget last month.
Gates’s investments in clean energy companies do not seem affected by the cutback. Breakthrough Energy’s venture capital and investment arm, its fellows program, and its efforts to catalyze new green products remain intact.
“Gates and Breakthrough Energy remain committed to advancing the clean energy innovations needed to address climate change,” a Breakthrough Energy spokesperson told me in a statement. “Our work is focused on accelerating the transition to a cleaner, more prosperous world."
The closure of Breakthrough’s policy arm — and the presumed end of its grant-making operation — will alter the world of climate nonprofits. Breakthrough Energy was unusual among environmental and energy nonprofits for its enthusiastic support of all forms of zero-carbon energy, including nuclear fission, geothermal power, carbon capture and removal, and nuclear fusion. Many other prominent nonprofits — even some that have shifted to principally fighting against climate change, like the Sierra Club — are more traditional and conservation-minded, and actively oppose the expansion of nuclear power.
“The closure of Breakthrough is indicative of a broader trend that often happens when there’s a change in power in Washington, which is a retreat from federal policy and also often a retreat from the center,” Josh Freed, the senior vice president for climate and energy at Third Way, told me. The Third Way energy team was funded in part by grants from Breakthrough Energy.
“Breakthrough played a critical role in elevating and making clean energy innovation policy very mainstream. That’s going to continue — in part because of … the partners who they brought together, who remain committed to working on this,” Freed added.
The unwinding of Breakthrough Energy’s policy and advocacy arm means that the group will not see the coming battle over the Inflation Reduction Act’s clean tax cuts, which some Republican lawmakers hope to repeal later this year as part of President Trump’s broader package of tax cuts. Gates was seen as instrumental to the lobbying effort to pass the IRA, meeting with Senator Joe Manchin of West Virginia and other lawmakers to support the 2022 legislation.
In an exclusive interview with Heatmap News in 2023, Gates warned that re-electing Donald Trump could derail the Inflation Reduction Act’s effectiveness.
“Right now, companies are responding to the IRA incentives. But you know, if you get Trump elected, and he really gets rid of it, there’s a lot of business plans that will [make people] feel foolish,” he said.
Even if Democrats ultimately enact new provisions similar to the IRA after Trump leaves office, Gates said, the damage of repealing the law would be permanent. “People [will] say, ‘Well, you’re asking me to make a 30-year investment. And half the time, I’m stupid.’”
Just over a year and one election later, Gates reportedly had a more than three-hour dinner with Trump at Mar-a-Lago. He later told Emma Tucker, The Wall Street Journal’s editor in chief, that he was “frankly impressed” by the president-elect.
Tesla already looked beleaguered last week as a tumbling stock price tied to public anger at CEO Elon Musk wiped out more than a half-billion dollars in value. The slide erased all the gains the company had garnered since new Musk ally Donald Trump was reelected as president. On Monday the stock went into full freefall, losing 15% of its value in one day. By Tuesday, Trump had to pose with Tesla vehicles outside the White House to try to defend them.
With a crashing market valuation and rising rage against its figurehead, Tesla’s business is in real jeopardy, something that’s true regardless of Musk’s power in the federal government. If he can’t magically right the ship this time, this self-sabotaging MAGA turn will go down as one of the great self-owns.
Musk’s heel turn has also upended EV culture and meaning. Tesla ownership, once a signal of climate virtue for those who bought in early, has been rebranded as a badge of shame. I’m annoyed that a vehicle I chose for the purpose of not burning fossil fuels has become a political albatross, and that many drivers are resorting to self-flagellating bumper stickers in the hopes it will stop vandals from spray-painting their doors. I wish I knew then what we know now, of course. But what would have become of the EV revolution if we had?
When, exactly, we should have seen Elon’s true self is a question that will inspire countless arguments amid the wave of Tesla hate. Signs were there early. By 2018, before the Model 3 even hit the road, Musk had been hit by so much criticism of his bad tweets and weird behavior that the magazine I worked for at the time felt the need to publish a contrarian defense of him as just the kind of risk-taking innovator the world needs.
That angle aged like milk, but within it lay a few grains of truth. Tesla truly did the bulk of the work in transforming the image of the electric car from a dumpy potato that only climate advocates would ever own, like the original Nissan Leaf, into a desirable consumer product. This is the company’s signature achievement, one that kickstarted the widespread adoption of EVs.
As I’ve written before, Musk wasn’t exactly untainted by 2019, when I bought my own Model 3. The Tony Stark luster of the new space age entrepreneur had worn off as the man sullied himself with pointless “pedo guy” accusations leveled at a rescuer in the Thailand cave incident. But the man had the best electric vehicle on the market, and more importantly, the best charging network. Having just moved to Los Angeles and in need of a vehicle, I wanted an EV to be my family’s only car. Without a home charger in the apartment, I simply couldn’t have lived with a Chevy Bolt or Hyundai Kona EV and the inferior charging networks they relied on at the time.
Millions of people who bought Teslas between then and now made the same choice. Some did it because a Tesla became a status symbol; many others were like me, simply interested in the most practical EV they could get. The ascendance of the Model Y to the world’s best-selling car of any kind in 2023 — a fact that feels astonishing in this flood of horrible vibes and MAGA antagonism just two years later — turned countless people into EV drivers.
After Musk’s far-right reveal, sales are tanking in the U.S., Europe, Australia, and other places that just saw a Tesla boom. Many owners, at least those with the financial wherewithal to buy a new car based on the prevailing political winds, are trying to unload their Musk-affiliated vehicles.
All those people in search of a new ride have a much better selection of electric vehicles to choose from than I did in 2019, which, weirdly, is thanks to the legacy carmakers and new EV startups that raced to catch up to Tesla. If I hadn’t bought a Model 3 in 2019, I would’ve had to get a hybrid and keep burning gasoline. If you want to avoid Musk in 2025, there are great Hyundai, Chevrolet, and other EVs waiting for you.
This isn’t to say there’s no alternate history where electric vehicles take off without Tesla. It didn’t invent the EV. Other automakers were experimenting with EVs before Musk’s company took off and conquered the market, and government environmental goals pushed carmakers toward electrification. Yet it’s hard to argue we’d be where we are now, with tens of millions of EVs on the world’s roads, without the meteoric rise of Musk’s car brand.
It stinks, simply put, to say anything nice about Tesla now, even if one is stating facts. Yes, Musk’s success buoyed electrification on multiple fronts: selling tons of EVs, forcing the other automakers to get serious about their electrification goals, and building a charging network that let his vehicles go just about anywhere a gas car would go. It also made him the world’s richest man, giving him the resources to buy and ruin Twitter and then help Trump get re-elected and undo federal policy support for the very cars he helped popularize. He made the world a better place for a moment, then ruined it because he could.
As an EV advocate, I can’t ignore the fact that Tesla got us to here. But as a human, I eagerly await the time Musk’s company no longer dominates the market it created. Thank goodness, that time seems to be coming soon.
On Lee Zeldin’s announcement, coal’s decline, and Trump’s Tesla promo
Current conditions: Alaska just had its third-warmest winter on record • Spain’s four-year drought is nearing an end • Another atmospheric river is bearing down on the West Coast, triggering evacuation warnings around Los Angeles’ burn scars.
EPA Administrator Lee Zeldin said yesterday he had terminated $20 billion in congressionally-approved climate change and clean energy grants “following a comprehensive review and consistent with multiple ongoing independent federal investigations into programmatic fraud, waste, abuse and conflicts of interest.”
The grants were issued to a handful of nonprofits through the Greenhouse Gas Reduction Fund, a $27 billion program that was the single largest and most flexible program in the Inflation Reduction Act. Zeldin has been targeting the funds since taking office, suggesting they were awarded hastily and without proper oversight. Citibank, where the funds were being held, has frozen the accounts without offering grantees an explanation, prompting lawsuits from three of the nonprofit groups. The EPA’s latest move will no doubt escalate the legal battles. As Politicoexplained, the EPA can cancel the grant contracts if it can point to specific and “legally defined examples of waste, fraud, and abuse by the grantees,” but it hasn’t done that. House Democrats on the Energy and Commerce Committee launched an investigation yesterday into the EPA’s freezing of the funds and Zeldin’s “false and misleading statements” about the GGRF program.
In other EPA news, the agency reportedly plans to eliminate its environmental justice offices, a move that “effectively ends three decades of work at the EPA to try to ease the pollution that burdens poor and minority communities,” as The New York Timesexplained.
President Trump’s 25% tariffs on all steel and aluminum imports came into effect today. As Heatmap’s Emily Pontecorvo has explained, the move could work against Trump’s plans of making America a leader in energy and artificial intelligence. “The reason has to do with a crucial piece of electrical equipment for expanding the grid,” Pontecorvo wrote. “They’re called transformers, and they’re in critically short supply.” Transformers are made using a specific type of steel called grain oriented electrical steel, or GOES. There’s only one domestic producer of GOES — Cleveland Cliffs — and at full capacity it cannot meet even half of the demand from domestic transformer manufacturers. On a consumer level, the tariffs are likely to raise costs on all kinds of things, from cars to construction materials and even canned goods.
The European Union quickly hit back with plans to impose duties on up to $28.3 billion worth of American goods. Trump had threatened to slap an extra 25% duty on Canadian steel and aluminum in retaliation for Ontario’s 25% surcharge on electricity (which was a response to Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources), but held off after the surcharge was paused and the countries agreed to trade talks.
Wind and solar surpassed coal for power generation in the U.S. in 2024 for the first time, even as electricity demand rose, according to energy think tank Ember. Coal power peaked in 2007 but has since fallen to an all-time low, accounting for 15% of total U.S. electricity generation last year, while combined solar and wind generation rose to 17%.
Gas generation also grew by 3.3% last year, however, now accounting for 43% of the U.S. energy mix and resulting in an overall rise in power-sector emissions. But solar grew by 27%, remaining the nation’s fastest-growing power source and rising to 7% of the mix. Wind saw a more modest 7% rise, but still still accounted for 10% of total U.S. electricity generation.
Ember
“Despite growing emissions, the carbon intensity of electricity continued to decline,” according to the report. “The rise in power demand was much faster than the rise in power sector CO2 emissions, making each unit of electricity likely the cleanest it has ever been.” The report emphasizes that the rise of batteries “will ensure that solar can grow cheaper and faster than gas.”
A group of major companies including tech giants Amazon, Google, and Meta, as well as Occidental Petroleum, have pledged to support a target of tripling global nuclear capacity by 2050 “to help achieve global goals for enhanced energy resiliency and security, and continuous firm clean energy supply.” The pledge, facilitated by the World Nuclear Association, came together on the sidelines of the energy industry’s annual CERAWeek conference in Houston. According to a press release, “this is the first time major businesses beyond the nuclear sector have come together to publicly back an extensive and concerted expansion of nuclear power to meet increasing global energy demand.”
In case you missed it: Toyota plans to roll out an electric truck for the masses by 2026. At least, that’s what can be gleaned from a presentation the company gave last week in Brussels. Details haven’t been released, but Patrick George at InsideEVsspeculates it could be an electric Tacoma, or something more akin to the 2023 EPU Concept truck, but we’ll see. “While Toyota officials stressed that the cars revealed in Belgium last week were for the European market specifically, we all know Europe doesn't love trucks the way Americans love trucks,” George wrote. “And if Toyota is serious about getting into the EV truck game alongside Chevy, Ford, Ram, Rivian and even Tesla, it could be a game-changer.”
President Trump and Elon Musk showed off Tesla vehicles on the White House lawn yesterday, with Trump (who doesn’t drive) pledging to buy one and to label violence against Tesla dealerships as domestic terrorism. Tesla shares rose slightly, but are still down more than 30% for the month.
Andrew Harnik/Getty Images