Bill Gates warns that manufacturing could challenge climate goals

Bill Gates exudes optimism in discussing the world’s ability to tackle climate change – until he hits on manufacturing. About that, he is worried.

There is currently no way to make steel or cement without releasing climate-warming emissions. Yet, neither governments nor investors are looking hard to solve that problem, Gates said.

“That’s the sector that bothers me the most,” Gates said in a video interview with Reuters ahead of the publication this week of his book, “How to Avoid a Climate Disaster.”

The software-developer-turned-philanthropist has invested some $2 billion toward the development of clean technologies. But those investments are in electricity generation and storage, not in manufacturing.

Manufacturing – especially in the cheap construction staples steel and cement – accounts for roughly a third of global greenhouse gas emissions. That makes manufacturing more polluting than the power or transportation sectors, which receive far more attention in policies and investments. And the manufacturing sector is set to grow, as the global population climbs and countries further develop.

“People still need basic shelter, certainly in developing countries,” said Gates, co-founder of Microsoft Corp. “It’s unlikely we’ll stop building buildings.”

Gates plans to push for more research and innovation at the U.N. climate conference in Glasgow in November. “The idea is to get innovation, including R&D, onto the agenda … not just looking at the easy stuff.”

During the 2015 U.N. climate talks in Paris, Gates helped to launch a global initiative called Mission Innovation along with U.S. President Barack Obama, France’s President Francois Hollande and Indian Prime Minister Narendra Modi to link national governments with the private sector in pursuing and sharing clean technology.

We need “total coordination, and in fact some overlap is a very good thing to have,” Gates told Reuters. But he said there should be diversity in the solutions being sought so governments do not end up duplicating efforts.

Right now, for example, “they’re doing a lot of green hydrogen products,” Gates said. “But who’s doing the hard stuff?”

Some manufacturing plants may be able to lower their emissions by plugging into an electricity grid run on renewable energy. But that will not solve all emissions from steel- and cement-making, both processes that release carbon dioxide as a byproduct.

In the United States, it hasn’t helped to have energy policy yo-yo between presidential administrations, he said. “This stop-start approach, that’s too risky for the private sector.”

On a personal note, Gates says in his book that, after years of dismissing activists’ calls to divest from fossil fuels, he sold his direct holdings in oil and gas companies in 2019. The Gates Foundation’s endowment did the same – but not because Gates became convinced that divestment would push companies toward clean energy.

Rather, “I don’t want to profit if their stock prices go up because we don’t develop zero-carbon alternatives,” he writes. “I’d feel bad if I benefited from a delay in getting to zero.”

Reporting by Katy Daigle.