Why Bill Gates’ climate VC firm is focused on the tech we don’t have

“Climate change is the result of our modern economy.” That means everything has to be fixed. Fast.

A model of the earth.

"Ultimately, zero is the only number that really matters here, and we need to get there as soon as we can."

Image: Richard Drury via Getty Images

Breakthrough Energy has emerged as one of the most prominent climate venture capital and policy shops in the U.S. That’s perhaps unsurprising given it’s the brainchild of Bill Gates, a guy you’ve probably heard of.

Gates himself put a lot of the thinking behind Breakthrough Energy in his 2021 book “How to Avoid a Climate Disaster,” including how the various parts of the organization weigh what to invest in, how to scale up innovation and how to lower what the group calls a “green premium.” (The latter is a term to describe why some climate-friendly options cost more than their dirty counterparts and reflects how our current economy basically pretends climate change doesn’t exist.) That book — and Breakthrough Energy in general — became a trendsetter in terms of defining what climate technology and startups other VC firms could invest in and how to shape policies that can spur innovation.

Jonah Goldman is the managing director at Breakthrough Energy, and he’s tasked with helping set the agenda for the entire organization. He describes himself as “not a career-long climate guy,” but told Protocol that actually opens the door to thinking a bit differently about the challenges we collectively face. Protocol chatted with Goldman about his work, how Breakthrough Energy approaches both the policy and investment side of its work and if being at one of the climate tech heavy hitters is a big weight to bear given the stakes.

This interview has been edited and condensed for clarity.


Why is working at Breakthrough Energy how you’ve chosen to address climate change?

I'm actually not a career-long climate guy. I'm relatively new to it, but having only been doing it for about seven years or so allows me to take a fresh perspective to the problem, largely because I just didn't know any better. The way that I think about it is that there was a long time where we decided that we didn't need to address climate change, because it was so far off in the future. And so that's why people said that they weren't prioritizing it. Now, we're not in that paradigm anymore. There's still a very large disconnect between the things we have to do and the value that we get from doing those things. And that, as somebody who's sort of curious, is a really interesting nut to try to crack.

Climate change is the result of our modern economy. It's a result of everything great that we rely on. Despite the fact that we don't like to say this that much, because it's much easier and more convenient to find evil in a particular bad situation, we're grateful for that. We're super grateful that for 100 years, we built an economy on these things that were incredibly cheap, easy to transport, easy to power. What gets me up every morning and super excited to do the work that I get to do with the people I get to do it with is the challenge of how we take the thing that's the most ubiquitous thing in the world — energy — and turn it into something new.

In terms of climate technology, what are you excited about over the next two to five years?

There's obviously a ton of technology that's ready to be deployed right now. The promise of expanding renewable and clean technologies, that is a very near-term thing. It took 25 or 30 years to be able to get to the point where we can deploy them.

The EV revolution is amazing. That's like the low-hanging fruit. The problem is what happens after you get past wind, solar and EVs. There are some pretty cool things that are happening — the two-to-five-year timeframe might not mean that everybody has these things available, but there's a lot of progress that we can make.

There's a bunch of really interesting long-duration energy storage, like, grid-scale, big things, to really finally unlock the power of these intermittent sources. We can start putting steel in the ground with some of those projects over the next couple of years for sure. They weren't there five years ago, they are there now.

And then the last thing I'm really excited about is some of the technologies to do ambient air, free air or direct air capture of carbon. Those are super exciting.

Those are also long-term solutions we need to have scaled by mid-century to get to net zero emissions. What is it about that space that’s exciting now?

What the question really uncovers is how does innovation even work? There's this misconception that focusing on innovation and things that are coming down the line is deferred action. It's the most urgent action.

"Ultimately, zero is the only number that really matters here, and we need to get there as soon as we can."

Direct air capture is a great example: Five years ago, there were a few different approaches and the economics of that looked a particular way. Five years later, we're at a very different place because there's been advancements in science, there's been the creation of companies, there's been understanding of engineering. And so now, even though we're probably 10 years away from big-scale deployment of these technologies, those 10 years are going to be phenomenally exciting in demonstrating that we can reduce the cost curve and all those things.

It's not just innovation and technology. With direct air capture, we need to figure out how we build policy structures to support that and how we finance what is inherently an uneconomic activity. All of those things need innovation.

What makes a good investment for you? Do you weigh whether an investment is good based on the financial return or the carbon cuts?

At Breakthrough Energy across all of our different programs, funds and platforms, we have a single minimum threshold: We're only focused on technologies that can remove half a gigaton a year from the atmosphere. We're only into the real big stuff. It's not that it's not valuable to invest in things that are smaller, it's that other people can do that.

We have two metrics that are the most important. The first one is what we call “green premium reduction.” Most of the world is not able to pay much more for products and services. So we need to reduce that price differential as quickly as we possibly can, at the biggest scale that we can.

The second is what we call “catalyzed emissions reductions.” We don't think that the best metric of whether something is or isn't a valuable investment from a climate perspective is the amount of reductions that you get today. It's the amount of durable reductions you get at scale. That's the most important metric. From our perspective, we would say it's more important to apply significant capital to a place that's most likely to scale emissions reductions over the long haul than to something that probably won't scale that may have larger emissions reductions tomorrow. Because ultimately, zero is the only number that really matters here, and we need to get there as soon as we can.

Half a gigaton is a big scale with a lot riding on success. Do you ever think, “we have got to make the right choices here from an investment or policy proposal perspective?” Does it weigh on you?

We're the brainchild of a brilliant person who has done enormously big things, in Bill Gates. He tells us that innovation takes mistakes, that you need to make a lot of mistakes. As far as whether or not I'm worried about making a mistake about whether there's too much investment in a particular way? That we, say, build a hydrogen electrolyzer, or another way? No, I'm not really. First of all, we're not at that point. But the other thing is, at some point, we just need to start doing these things at a much more rapid pace.

"Until we do everything, we haven't done enough."

Even if you take the reference point of COP21, the climate conference in Paris, versus where we just were when we were in Glasgow [at COP26]. Something that I felt very clearly when I was in Glasgow is that so many people were let down. That's a good thing. It's good that everybody thinks that we didn't do enough, because until we do everything, we haven't done enough. But if you look at what the progress was from Paris to Glasgow, in a bunch of the critical intangibles, there was far more private sector involvement in Glasgow than there was in Paris. There was far more talk about innovation. That demonstrates that the sector is getting much, much more sophisticated. And that is an exceptionally good thing.

Seeing that private-sector-level engagement was interesting, but it’s a sign of a bad thing: Governments aren’t doing enough. So I'm wondering how you think about the benefits of having the private sector involved?

It is true that the ultimate market shaper — especially with climate — is policy. It has to be. We change in a global capitalist environment when something is better or cheaper, and we're trying to force the world to change to things that are in almost every case less good and more expensive. That's never going to happen through a natural market cycle. So if we just rely on the private sector to do it, it will never get done. If we try to do it entirely through public mandates, it will never get done. That will fail also. Government action is not as fast as any of us would like.

We already have somewhat of a relationship here between the public and private sector that's sometimes productive, and sometimes not productive. But the only way that this thing happens is if we come together pretty significantly.

We’ve talked about technology and policy. But there’s a human facet to this, particularly around environmental justice and polluting sites traditionally ending up in low-income communities. How do you and Breakthrough Energy think about how to not repeat those mistakes when it comes to building the clean energy economy and making sure the benefits also accrue in those places?

The first piece of the puzzle that we have to realize is, let's not shove everything into the climate lens. Because if we shove everything into the climate lens, those communities will once again be overlooked.

If you're working in the energy industry right now, and that's providing you a livelihood and the ability to feed your family, you don't look at yourself as, like, an electron producer. You look at yourself as somebody who has stability. It's important to make sure that there is a transition that honors those communities.

Ultimately, this is an opportunity to completely rethink how we power our economy. The last time, we didn't think too much about a whole bunch of critical communities. We have an opportunity. The transition can be just, but it only will be if we start at the beginning to think about how we can actually bring communities along with us.

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