Book Review: Bill Gates “How to Avoid a Climate Disaster”

In his new book “How to Avoid a Climate Disaster” Bill Gates summarizes his stance on climate change, acquired through endless talks with experts and entrepreneurs in the field, for a general audience.
His message is a grave one:
We need to accomplish something on a gigantic scale, much faster than we have done anything even remotely similar before. We need our energy system to keep doing the things we like and stop it doing the things that harm us. To do it, we need lots of breakthroughs in science and engineering and policies to push a transition, that wouldn’t happen on its own.

But don’t despair and don’t panic! We can do this!

Bill Gates approaches the problem like an engineer. He first identifies the problem areas and their impact. The problem of our reliance on CO2 can be broken down to the questions of “How we make stuff” (31%), “How we plug in” (27%), “How we grow things” (19%), “How we move things around” (16%) and “How we keep warm and cold” (7%).
The attentive observer will quickly notice that his touches pretty much everything of human life. That’s right. And part of the problem. Fossil fuels are so cheap and so useful, that they permeate virtually all our activities.
Where they don’t, they situation is often burdensome for people living without them. It’s just better to have a tractor to plough the field than to do it with beasts of burden or even manually.

He sets the measure of success in our fight against climate change at “zero” and uses the bathtub metaphor to describe the climate system. If you add water, the level rises. Even a small inflow will get the bathtub to overflow eventually. The only ways of preventing that is to stop adding more or opening the drain to get more water out than flows in. We currently don’t have the technology to do the latter at scale.

Gates puts a lot of emphasis on the electricity sector, because a lot of the processes in the other areas of energy usage could become zero-carbon, if they were run by clean electricity. Doing so consistently would probably triple the world’s electricity consumption, which would make it the most important technological lever for decarbonization.

5 Habits of Highly Climate-Literate People

Gates starts with giving the reader 5 simple rules, that could be dubbed “5 Habits of Highly Climate-Literate People”.

His fist rule is to contextualize raw numbers that are thrown around in the climate debate. If you know that the world emits 51 billion tons of CO2 equivalents, you can gauge how much of an impact a certain policy will have. One of his investments policies states that only companies with the potential to reduce at least 500 million tCO2/a (1%) are considered.

His second rule is to ask “What about cement?“. This is a short-hand to remind all participants in a discussion that there are areas of the economy for which we do not have drop-in replacements.

The third question is another one to get context. “What amount of power are we talking about?“. A kilowatt powers an average household, a megawatt powers a small town, a gigawatt a mid-sized city, 1000 gigawatts the USA and 5000 gigawatts are currently powering the world.

The fourth question is “How much space does it need?“. The power density of energy source really matters. It tells you how much power you can get from a fixed area. While wood and biomass are typically less than 1 W/m², wind power has a density of 1-2, solar of 5-20, hydro of 5-50, nuclear of 500-1000 and fossil fuels 500-10000 W/m².

The fifth question is “How much is it going to cost?“. Bill Gates uses the Green Premium concept to gauge this question. The idea is simple: ask what the new carbon-free solution is costing and compare it to the current price.

What does the Green Premium tell us?

The Green Premium helps us to answer some hard questions, like “Which carbon-free technologies should we be deploying now?” Easy, those with low or even no Green Premium! If the Green Premium is large, as it is for example in the case of liquid fuels, this indicates where more innovation is needed. If it is small, or even negative, you might have identified an area, where outdated regulations might prevent the more wide-spread usage of a new technology. Costs for replacements in that sector are so high at the moment that they will keep us from decarbonizing it. Reversely, a high premium indicates where opportunities for new companies and products are. “Countries like the United States shouldn’t see investing in clean energy R&D as just a favor to the rest of the world. They should also see it as an opportunity to make scientific breakthroughs that will give birth to new industries composed of major new companies, creating jobs and reducing emissions at the same time.” By framing the question of climate change as an opportunity for profit (and putting the right policies in place to make it so), we might break out of the endless arguments about who has to bear the costs of climate change and move to a world, where countries and companies race to implement the best new technologies on a global scale.

For some crucial technologies, like cement, there is no (not yet?) a zero-carbon alternative. So it is not possible to calculate a the Green Premium. To mitigate this problem, the “brute force” method is used. The technology stays like it is, but we remove the emitted carbon from the atmosphere afterwards via a process called direct air capture (DAC). In short, you blow air over a device, suck the CO2 out of it and store it in a safe repository. It is not operating on an industrial scale, so it’s not entirely clear yet, what the cost will be. 200 $US/tCO2 seems realistic, with enough innovation this figure might be halved.
This technology establishes a higher bound on Green Premiums.

A global perspective

Gates has a global perspective on the climate change question. His philanthropic work has shown him a more realistic picture of the living conditions of people in developing countries than probably most of his audience has. He is an active supporter in their struggle to get out of poverty and is unwilling to sacrifice their progress and lives in the fight against climate change. One of the grave injustices is that the people who are doing the least to cause the problem will be hit hardest by it. When he asks “What are we willing to pay”?, he asks this question in the global sense. He is very well aware of the fact that there are Green Premiums that the USA or Europe are able (and willing) to pay, but still beyond the reach of India, Nigeria, Mexico or China. Of course, the developing world is currently responsible for 2/3 of global carbon emissions. So even if the developed world could get to zero overnight, this would not solve our problem. Gates thinks that it is “immoral and impractical to try to stop people who are lower down on the economic ladder from climbing up“.
This means that we will need to produce more energy than we do today, but without any carbon emissions. If they do it with the most economical option currently known, Chinese-built coal power plants, it will be a disaster for the climate.

Why storage will probably not work

The main driver of Green Premiums for electricity is intermittency. Solar and wind are intermittent sources of energy. They are subject to daily and seasonal cycles. If we want to keep the things about the electric grid we like, namely reliable and “always on” power, we need to make renewable energy more reliable. The problem becomes more pronounced, the higher the amount of variable energy in a grid is.
Currently, we have only two ideas to do so: we build fossil fuel power plants as backups or we store the energy.
Unfortunately, storing electricity is not as easy. Only a few places are well-suited for pumped hydro storage, which is currently the most cost-efficient way of storing electricity on a large scale. Batteries can be deployed almost anywhere and are widely believed to be the solution to the problem. Gates guides the reader through this scenario: suppose you want to store a kilowatt-hour of energy you produced during the day and want to use it at night. Suppose you can buy such a one kilowatt-hour battery for $US100. Assume the battery lasts for 1000 cycles. That means (without debt and interest rates) that the battery adds 10 cents per kilowatt-hour. Given that a kilowatt-hour of solar power might cost 5 cents, storage triples the cost of energy. Some researchers are optimistic that further increases in cost efficiency are possible. Let’s say they are able to cut off 80% of the price. Then storage will add only 2 cents.
Seasonal variability is another scale of problem though. If you want to transfer energy from summer to winter, you cycle your battery only once per year. This eliminates their limitation on cycles, but ties up a lot of capital into batteries. If you include 5% interest rates, that would cost you $US5 per kilowatt-hour.
A hundredfold increase in the costs of energy!
Intermittency adds another problem: choosing the right capacity.
If a city wants to use 1 gigawatt of power, does it deploy enough renewable energy to produce 1 gigawatt in summer and is out of luck in winter, or does it deploy enough solar power for winter days? If they do the latter, they can choose to either produce so much excess power in summer that the price of it becomes zero (or negative), which will make recouping the investment hard, or to switch of some panels, creating a lot of dead capital.
On the scale of countries, Germany already has that problem. It produces roughly 10 times as much solar power in June than in December, dumping excess power in adjacent grids, much to the displeasure of grid operators there.
If you allow for any unusual events in the seasonal cycle, like an especially cloudy summer, requirements on the size of storage growth rapidly.
Gates thinks that batteries might become three times better, but not fifty times. Similarly, he is very skeptical of claims about “exponential scaling”.
Power plants are not like software and not like microchips. They are large, expensive and take some time to build. Computer chips got so cheap so quickly, because people figured out how to cram millions of times more transistors into the same area. There is no equivalent that will make cars use a million times less gas or getting a million times more solar power from a given area of land.

Given this reasoning, Gates seems convinced that firm, zero-carbon energy sources such as CCS and nuclear will make the fight against climate change that much easier.
“In 2018, researchers at the Massachusetts Institute of Technology analyzed nearly 1,000 scenarios for getting to zero in the United States; all the cheapest paths involved using a power source that’s clean and always available—that is, one like nuclear power.” Why nuclear power, you might ask? In Gates’ words: “Here’s the one-sentence case for nuclear power: It’s the only carbon-free energy source that can reliably deliver power day and night, through every season, almost anywhere on earth, that has been proven to work on a large scale.” Given this level of enthusiasm, it is probably not a coincidence that Gates is the founder of a nuclear energy company, TerraPower, that is working on a “peaker” nuclear reactor, called Natrium, which uses molten-salt thermal energy storage to enable the power plant to load (or solar?) follow.
He seems convinced and has a strong argument, that “[w]ithout a source like that, getting to zero-carbon electricity would cost a lot more.”
I think it’s the concerned citizens and father, rather than the egoistic entrepreneur speaking, when he says: “What’s most important is that the world get serious once again about advancing the field of nuclear energy. It’s just too promising to ignore.”

Policies

Of course, Bill Gates also offers a set of policy recommendations. They are not too dissimilar from what Björn Lomborg or the Breakthrough Institute (or me) are advocating for. He advises to increase innovation by quintupling clean energy and climate-related R&D over the next decade. Also, he wants to make the government put bigger bets on high-risk, high-reward R&D projects, because government investments tend to skew towards investments safe enough for private funding. Gates also recommends matching R&D with real needs, i.e. considering how research could be used in commercial products and to work with industry from the beginning on tough technology.
These policies are aimed at increasing the supply of clean energy products to choose from.

The other side of the equation it the acceleration of demand for these products.
There are different ways to achieve that. For technologies with low maturity levels, the government could use its procurement power to drive emerging technologies into the market at rather low costs. An example of this could be the Department of Defense buying some low-carbon liquid fuels for planes.
Tax credits, loan guarantees and other tools can reduce the Green Premium and drive demand for new technologies from the private sector.
The government can also play a large role in providing the necessary infrastructure, like grids and charging stations. Gates has funded a project to build a computer model of the power grids in the USA. This model was used to study what it takes states to get to 60% renewable energy in 2030.
They found that there is no way to do it, without improving the power grid. They also showed that a national grid strategy could help the states to meet their goals with 30% fewer renewable energies. Building renewable power in the best places and building a national grid is cheaper than just building out renewable power.

After new zero-carbon products have entered the market and the companies producing them have scaled up, the demand has to come from the private sector. This means that private actors have to be incentivized to buy these products. A great way to do this according to Gates is to put a price on carbon. Another good way are clean electricity standards, which mandate the usage of a certain percentage of clean power sources. Clean certificates can be traded. In contrast to renewable energy standards, which are narrowly benefiting a certain set of technologies, clean standards are measuring what we really want: getting to zero. The same principle can be used on clean fuels and products.
Gates proposes to use the financial strength of the public sector to lengthen the investment horizon of private investments.

Adaption

Gates also sees the need for adaption for adverse climate events, probably drawing the ire of some “purists” on climate change.
Adaption has three stages: the first stage is to reduce risks, like climate proofing buildings, protecting wetlands, relocating people from flood prone areas, but also building seawalls or cold and warm rooms in cities. Tangible, often immediately beneficial investments, mostly on a local level.
The second stage is preparing and responding to emergencies. This includes better weather forecasts and early-warning systems as well as well-equipped and well-trained first responders. This is probably best done on the scale of states. The third stage is the recovery period after a disaster has hit for displaced people, providing health insurance, and education to children, enforcing building standards and so on. This probably done best on a national scale.

Geoengineering

An especially controversial form of adaption is geoengineering, which Gates sees as valuable backup, when the world becomes convinced that worst case scenarios, like tipping points might be reached. Geoengineering technologies pose thorny ethical questions and are a “Break glass in case of emergency” type of action. They just buy time, but don’t solve the problem. They are rather cheap (on the order of 10 billion $US), often reversible in a matter of weeks and the only known way to lower temperatures in a matter of years or decades without crippling the economy. But they would be a(nother) experiment with our climate on a global scale. I agree with Gates that it’s far preferable to make sure we will not need this technology – but I also agree that we know as much as we need to know, if we have to use it.

Summary

Bill Gates has written a very readable summary of his position on climate change. He is able to compress the complex debates about climate change into easily digestible concepts and pictures. He makes it very clear why it is probably the largest problem we have ever faced and what we need to do, if we want to have fighting chance.
He delivers on the subtitle of the book an shows which ” solutions we have and the breakthroughs we need”. I think it is a great introduction for a lay audience and gives them many handy tools to better understand the debates on climate change, like the concept of the Green Premium. For attentive followers of the climate debate, it offers few fresh ideas, but I think it is well worth your time.

The Book

Bill Gates, How to Avoid a Climate Disaster. The Solutions We Have and the Breakthroughs We Need. Penguin Books Ltd. Kindle-Version.