The billionaire and Microsoft co-founder explained during an interview with CNBC that although global economies cannot immediately discard oil and gas, current shortages in the European energy market will prompt a faster transition away from fossil fuels.
“Now, without the Russian natural gas being available in Europe, it’s a setback. We need to find non-Russian hydrocarbon sources to substitute for those,” Gates explained. “Keeping those economies in decent shape is a priority. Now on the other hand, it’s good for the long run, because people won’t want to be dependent on Russian natural gas, so they’ll move to these new approaches more rapidly.”
Natural gas shipments from Russia, which had already paused exports to Germany through Nord Stream 1 before the pipeline system witnessed massive damage, provided 40% of the continent’s natural gas supply last year. European Commission President Ursula von der Leyen acknowledged that low hydropower generation, which emerged from low river capacity, is partially responsible for soaring energy prices, although she said the “effects of climate change” were responsible for the low water levels.
Gates is the founder of Breakthrough Energy, which aims to catalyze technological development to decrease greenhouse gas emissions. The organization raised funds from several corporate partners last year, including BlackRock, Boston Consulting Group, General Motors, and American Airlines.
In the United States, where winter power bills are slated to rise 28% or more, members of the Biden administration have similarly claimed that high energy prices will facilitate a shift toward renewable sources. Transportation Secretary Pete Buttigieg, for instance, told the House Transportation and Infrastructure Committee that the “pain we are all experiencing from the high price of gas” would cause more Americans to seek benefits from electric vehicles.
Gates also commented on environmental, social, and governance investing, also known as ESG, and responded to criticism from those who argue that the movement blends nonpartisan business operations with progressive social causes. He called BlackRock CEO Larry Fink a “great example of private-sector leadership” for his work in promoting renewable energy.
“Anyone who says that climate shouldn’t be a factor in how you evaluate the future of a company, that’s not capitalism, because companies that have emissions are going to be subject to border adjustment tariffs or taxes. If you’re dealing with severe weather events, that’s got to be factored in,” Gates remarked. “The attacks are kind of illogical, because climate does affect the economy, which does affect investments.”
Fink has indeed claimed on numerous occasions that “climate risk is investment risk.” BlackRock said in a recent letter to conservative state attorneys general that ESG does not constitute a departure from the maximization of profits and claimed that entities adopting a “forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes.”
Multiple conservative states, including Missouri, South Carolina, and Louisiana, have since pulled more than $1 billion from BlackRock, which often presses portfolio companies to deprioritize fossil fuels. Texas concluded that BlackRock and nine other firms had violated state law by “refusing to deal with” or “terminating business activities with” companies involved in the production of oil and gas “without an ordinary business purpose.”