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So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? What he said was nonsensical and

So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? What he said was nonsensical and innumerate. Perhaps its because he has effectively infinite money? His comment don't really hold up even under basic charity. The dollar in fossil fuels is a dollar not in another industry with a better story for the environment. The rest of us have a limited pile of dollars to decide with.

joe_the_user 7y ago
So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? "Climate innovation" is also going have limited impact on global warming, if by "climate innovation" you mean lower cost power sources like solar or wind. The problem is that lower-cost clean fuel is not drive hydrocarbons away since pumping already-found oil out of the ground pretty much can't be beaten in price. The only that can stop CO2 pollution is states using their regulatory power to stop it. One factor to consider is that pension funds and other funds with social impact would do well to divest if such a regulatory crack-down is to take place. -- "CO2 pollution" is good way to phrase it too, since other pollution problems aren't handled with the kind of worthless half-measures that CO2/greenhouse-gas problem has been mishandled with.
comicjk 7y ago
Imagine a climate innovator that is selling stock worth $1 billion based on expected returns. That stock can be expected to sell for $1 billion, and no more, even if $0.5 billion of that comes from altruistic investors. The altruistic investors can't drive up the price - as long as money from amoral investors is needed, the amoral investors are the price setters, because they won't pay more than what they think the expected returns are worth. They will step aside as the altruistic investors move in. The altruistic investors would do better to just invest for maximum returns and donate money. Note, I don't act according to this advice: I'm invested in sustainable funds despite my own arguments. But I don't expect this to go very far, so I'm also donating to appropriate causes.
- ClumsyPilot 7y ago
  Your argument works well if we are talking about easily quantifiable assets like a wind farm where you can estimate annual returns for the next 20 years. It falls flat when we are talking about genuine inventions and new technologies, where the greater the investment, the faster it can scaled and the more it can be developed/refined. It is not possible, in such case, to say that a specific opportunity is worth $1 billion, just like, as the point of raising the seed round you can't know what will be the valuation at IPO
loeg 7y ago
Markets are flush with cash and there is a huge amount of spending and growth in "green" energy sources like solar and windmills. Not sure anyone is really without sufficient capital to create green technologies, except perhaps lack of funding for nuclear.
rz2k 7y ago
While the statement is nonsensical and innumerate, I think that Bill Gates was making a different point. There are trillions of dollars invested somewhere other than in oil and gas extraction, because the investors believe they are getting a better return, or they simply don't have a signal that somewhere else has better potential. When a dollar leaves fossil fuels and the sticker price of ownership decreases, those investors receive a signal about higher potential yields. The issue is that even Bill and Melinda and the Gates Foundation have a limited pile of cash compared to the effectively infinite money already in oil and gas exploration and extraction and the effectively infinite money haphazardly seeking returns elsewhere regardless of impacts on the planet. That is, the supply of money for those industries is too elastic at the scale of only $100B. I think that Bill Gates is saying that given their limited pile of cash, they have the most impact creating competitors to current energy intensive industries that demand energy and competitors to fossil fuels as alternative suppliers of energy. I don't know why the title and the leade repudiate divestiture. Maybe it is an attempt to sound clever, or maybe it is a bias toward hopelessness. I imagine some readers will simply ape the statement in cocktail party situations, which will miss the opportunity of advocating the proactive solutions Gates was talking about, and counterproductively reinforce the fatalistic idea that no one can do anything.

joe_the_user 7y ago

So where does the dollar to invest in climate innovation come from if you don't take the dollar out of the fossil fuel stock? "Climate innovation" is also going have limited impact on global warming, if by "climate innovation" you mean lower cost power sources like solar or wind. The problem is that lower-cost clean fuel is not drive hydrocarbons away since pumping already-found oil out of the ground pretty much can't be beaten in price. The only that can stop CO2 pollution is states using their regulatory power to stop it. One factor to consider is that pension funds and other funds with social impact would do well to divest if such a regulatory crack-down is to take place. -- "CO2 pollution" is good way to phrase it too, since other pollution problems aren't handled with the kind of worthless half-measures that CO2/greenhouse-gas problem has been mishandled with.

comicjk 7y ago

Imagine a climate innovator that is selling stock worth $1 billion based on expected returns. That stock can be expected to sell for $1 billion, and no more, even if $0.5 billion of that comes from altruistic investors. The altruistic investors can't drive up the price - as long as money from amoral investors is needed, the amoral investors are the price setters, because they won't pay more than what they think the expected returns are worth. They will step aside as the altruistic investors move in. The altruistic investors would do better to just invest for maximum returns and donate money. Note, I don't act according to this advice: I'm invested in sustainable funds despite my own arguments. But I don't expect this to go very far, so I'm also donating to appropriate causes.

ClumsyPilot 7y ago
Your argument works well if we are talking about easily quantifiable assets like a wind farm where you can estimate annual returns for the next 20 years. It falls flat when we are talking about genuine inventions and new technologies, where the greater the investment, the faster it can scaled and the more it can be developed/refined. It is not possible, in such case, to say that a specific opportunity is worth $1 billion, just like, as the point of raising the seed round you can't know what will be the valuation at IPO

loeg 7y ago

Markets are flush with cash and there is a huge amount of spending and growth in "green" energy sources like solar and windmills. Not sure anyone is really without sufficient capital to create green technologies, except perhaps lack of funding for nuclear.

rz2k 7y ago

While the statement is nonsensical and innumerate, I think that Bill Gates was making a different point. There are trillions of dollars invested somewhere other than in oil and gas extraction, because the investors believe they are getting a better return, or they simply don't have a signal that somewhere else has better potential. When a dollar leaves fossil fuels and the sticker price of ownership decreases, those investors receive a signal about higher potential yields. The issue is that even Bill and Melinda and the Gates Foundation have a limited pile of cash compared to the effectively infinite money already in oil and gas exploration and extraction and the effectively infinite money haphazardly seeking returns elsewhere regardless of impacts on the planet. That is, the supply of money for those industries is too elastic at the scale of only $100B. I think that Bill Gates is saying that given their limited pile of cash, they have the most impact creating competitors to current energy intensive industries that demand energy and competitors to fossil fuels as alternative suppliers of energy. I don't know why the title and the leade repudiate divestiture. Maybe it is an attempt to sound clever, or maybe it is a bias toward hopelessness. I imagine some readers will simply ape the statement in cocktail party situations, which will miss the opportunity of advocating the proactive solutions Gates was talking about, and counterproductively reinforce the fatalistic idea that no one can do anything.