Climate Crisis: a special conversation with Bill Gates

In this Yahoo Finance special presentation, Andy Serwer is joined by former Microsoft CEO Bill Gates as they discuss the threat of climate change and what could happen to our planet if we don't address the problem.

Video Transcript

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ANDY SERWER: Hello, everyone. I'm Andy Serwer, and welcome to a Yahoo Finance special, "Climate Crisis." I'm joined now by Bill Gates, co-chair of the Bill and Melinda Gates Foundation, former CEO of Microsoft, and author of the new book "How to Avoid a Climate Disaster." Bill, welcome.

BILL GATES: Great to be with you.

ANDY SERWER: So I want to start off by asking you about the weather. And right now, the US is experiencing a massive, highly unusual deep freeze. Is this due to climate change, do you think?

BILL GATES: Well, these events become more likely because of climate change because the normal wind patterns are broken down. And so a cold front can go further south more often than we would expect. So yeah, the extreme events are coming more often and with more force, including hurricanes, than before we started warming the Earth.

ANDY SERWER: This recent storm has caused massive power outages in Texas. And the state's governor, Greg Abbott, blamed frozen wind turbines and said it shows the Green New Deal would, quote, "be a deadly deal for the United States." How would you respond to that, Bill?

BILL GATES: Well, in terms of the current situation, he's actually wrong. The wind turbines-- you can make sure they can deal with the cold. It probably wasn't anticipated for the wind turbines that far south, but the ones up in Iowa and North Dakota do have the ability to not freeze up. Actually, the main capacity that's gone out in Texas is not the wind. It's actually some of the natural gas plants that were also not ready for these super-cold temperatures. So even though viewing this as an attack on renewable energy in this case is wrong, in fact, the point he's making, which is that as you rely more and more on wind and solar, that reliability will be a challenge.

And you'll need three things to maintain reliability while driving renewables over 80%. One is more transmission. So we have an open source model. We're going to show that if Texas had had slightly more in a connection, they wouldn't have had a problem. The second is energy storage. It's still hard to store these amounts of energy. And finally, sources of energy that aren't weather-dependent but are green like nuclear. And so those three will be an important part of the zero emission electricity system.

ANDY SERWER: Bill, how do we explain climate change so people understand that the threat is real?

BILL GATES: Yeah. Sadly, the effects accumulate over time. And they're worse in natural ecosystems like coral reefs that are dying off or at the poles where the ice melting is accelerating a great deal. And so giving people a direct experience of the wildfires or that sea level rise and then helping them extrapolate that heat waves are going to kill a lot of people-- you won't be able to do outdoor work, including farming and construction, and that nature just can't adjust as fast as we're causing this warming-- that's a communications challenge.

I will say that during the pandemic, it's a huge crisis. And normally, people-- their interest in things that are longer term goes away. But in fact, the interest in climate particularly amongst the young generation, has stayed very strong, enough so that all these build back better plans in the US, the UK, the European Union, all of them are climate-themed so that a lot of it will go to these breakthrough projects to get emissions dramatically reduced.

ANDY SERWER: I want to get back to that point you're making about the links between the COVID pandemic and climate change in a minute. But in your book, you talked about 51 billion tons of greenhouse gas being released in the atmosphere every year, and we need to get to 0. Is there a tipping point from where we can't recover?

BILL GATES: We don't know of a specific tipping point. So 2050 is the earliest that you can imagine the manufacturing, electric grid, transport, farming, building, heating, all five sectors making these big changes. The more CO2 you put in-- because it stays for thousands of years-- that all sums up, and you get a temperature increase, which sadly causes the hurricane severity and the overall inability to grow crops like we used to.

There may be tipping points, like when the permafrost melts so much and releases even more greenhouse gas. So that's a positive feedback loop. In the Arctic, the fact that the ice, when it goes away-- that when the sun hits the water, it's darker, and so it captures more heat-- that's a positive feedback effect. But that one's already in the models.

And so if we could do it by 2040, that would be better. But the warming overall, we know, even without those surprises, will be very bad. So we'll have to help with adaptation while we do the reductions, which is called mitigation.

ANDY SERWER: Let's get to that point again about the links between COVID and climate change. What are some of those links? For instance, people talk about zoonotic diseases being a possibility, which are diseases that jump species. Is that the case, perhaps?

BILL GATES: Yeah. Most all diseases, infectious diseases, are things that were in other species but were somehow stable there because they were benign. So HIV crosses over from chimps through some bushmeat event that may have been as early as 1900. Measles is zoonotic. And coronavirus, we're a little unsure. Did it go through an intermediate species coming from the bats? But it starts out in bats.

So yes, as we're encroaching on nature in places like Africa more and more, that ability of things to cross over is very significant. And climate means that, sadly, we'll be destroying more natural habitat, and the overlap between humans and the animals will be that much greater. So this time, we should take our lesson. Knowing that the chance of a natural pandemic is 2% or 3% a year, we should make the billions of investment to avoid the trillions and trillions of damage that we've seen.

ANDY SERWER: So you talk about those lessons at the end of the book learned from COVID that could be applied to climate change. And that would be one of them, I guess.

BILL GATES: Yeah. Counting on government to think ahead-- that's their role. They tell us to do building codes because of earthquakes. They have the Defense Department do war games to appreciate how they can be ready. The two things governments didn't invest enough in are, number one, pandemics, and number two is getting us ready for climate change.

ANDY SERWER: Asking a question from a Yahoo Finance perspective, Bill, have the financial markets priced in climate change, say, in terms of real estate or the value of oil stocks, just to name two?

BILL GATES: You know, I'm not an expert on those valuations. The oil stocks have come down partly because the demand during the pandemic has been super low. Greenhouse gases went down about 8%, which, in a way, it's kind of stunning given the change in travel and activity that it's so low. It kind of reminds us that we're still making cement and steel, and there's so many different areas of emission that travel alone didn't give us a dramatic cut there.

There's probably some Teslas out there, but identifying who they are in advance-- you know, people are going to take the industrial problems or transmission problems or food problems. The market's looking positively at people like Beyond Meat, QuantumScape. Those are investments I made for climate reasons that at least so far have been profitable investments. So it's nice to see the willingness to reward those companies and appreciate they'll have a strong future.

Some of the oil companies are transferring their skills over to things like CO2 removable or biofuels. Some are saying saying, no, we're going to just stay specialized and see how it goes. And I think the market is drawing a distinction between those two strategies.

ANDY SERWER: One thing you talked about, one concept in your book, Bill, is green premiums and the notion that green things cost more. How are we going to get over that problem, really, in society?

BILL GATES: Yeah. Given that your audience thinks about finance, I think this is a very important metric that will help them appreciate any climate-related advance to see how impactful it is. We emit 51 billion tons a year right now in CO2 equivalents. And if we invent a way to withdraw a ton from the air for $100 a ton, which there's a good chance we'll have that in the next decade, the brute force approach would be to say, fine, just pay that industry $100 times $51 billion, and so $5 trillion a year.

And you have to say is, the world willing to come up with that type of money? And the answer is not a chance. In fact, the way I look at it is in 2050 when we're talking to India, that will still be building buildings and providing light and air conditioning at a very basic level for their people-- when we say to them, please use the green stuff-- the green cement, the green steel, the green electricity, the green transport-- they're going to say to us, look, you did most of these emissions.

You're richer than us. You're extravagant compared to what we're trying to provide. And so unless you subsidize most of this green premium, which over decades would be trillions of dollars, we're just going to do it the normal way and expect you to solve it.

Now, if you get the green premium down 95% from $5 trillion a year to $250 billion a year, then the world's rich governments, I think, both in terms of their own subsidies and helping other countries, that is definitely within reason. And so we would be willing to help India out, and they would make that decision. Because their emissions are rising.

So our responsibility as a country is not just to zero out our 15% of emissions. If we do that in a brute-force, expensive way, nobody else can follow along, or very few, whereas if we do it in an innovative way where we're, every year, saying, OK, who can help bring this green premium down, how do we bootstrap the demand for that product, how do we accelerate innovation, then we're really talking about the real problem. And the US has the majority of the world's innovation power. And if we do innovate, then we get world-class companies like Tesla that are helping to solve the problem globally.

ANDY SERWER: Even assuming that we can get the US economy onboard with these ideas, Bill, how sanguine are you about getting the Chinese to be a part of this kind of endeavor?

BILL GATES: Well, it's super important because they're also a source of innovation. Their universities are not as good as ours, but they've gotten a lot better. They are huge in the industrial economy. Almost half the world's cement, half the world's steel is made in that one country, some of it embedded in exports that they make. And they also finance coal plants not just domestically, but as part of the Belt and Road Initiative in other countries as well.

Their current commitment is 0 by 2060. And so how can we, in a win-win kind of way, get them to bring that date earlier and not have them promoting coal in such a big way? The remaining coal-- although there's a few plants in rich countries, and we need to get rid of those, it's really about China and India. And it's tricky because we have a complex relationship with China. John Kerry is going to do his best to see if this isn't an area that we're helping each other.

ANDY SERWER: And speaking of John Kerry, what sort of communication, Bill, have you had with the Biden administration when it comes to climate change?

BILL GATES: Yeah. I had a chance to talk to the President-elect several times. And the two topics we talked about were pandemic, ending this one and avoiding the next one, and then also climate change. So right up there in his top priorities is climate. And it's such a hard problem. That's what it's going to take.

The team of people he's picking, from Gina McCarthy, John Kerry-- even in the non-climate-type jobs like National Economic Council, Brian Deese, he's got a lot of great experience. And so our dialogue with both the president, but now in terms of more specifics, the team that's creating his plan-- and he's really given them a lot of delegated authority because he picked the right people. That's really coming into focus. They're going to have events, probably in April. And then for the world in November in Glasgow is this COP26 meeting that will be very, very important.

ANDY SERWER: Last time we talked-- we were talking only about COVID at that point, and you said we wouldn't be completely back to normal until this coming fall. Does that still feel right to you? And if so, when do you think we'll be completely back, maybe, more specifically?

BILL GATES: Well, the good news since we last talked is the progress in the vaccines. And although in a few cases, the manufacturing volumes have been hard to ramp up, overall, most the vaccine constructs worked well. The only negative news since then is the rise of the variants. And the Gates Foundation funded all these trials in South Africa. We did that not because we knew in advance some variant would show up during those trials, but we wanted safety data in Africa to convince Africans that they should consider taking the vaccine. And we wanted a population of people living with HIV to see how the vaccine worked there.

Now, it turned out that as we ran that trial, we could see the variant coming in. And we saw that two of the three vaccines we were testing, Novavax and Johnson & Johnson, retained a lot of strength. And so now the discussion about do you need a third dose-- if so, is it a different vaccine than the first two? Do we need to tune the vaccine? Our vaccine team is working with the government now to figure out that plan.

So that is going to extend things a bit and cause us to be careful in our behavior. But overall, I'd still say by the fall, the US, particularly if we can get the message out to encourage wide acceptance of the vaccine, will avoid a fall wave, which will be fantastic.

Now, we need to help the whole world. And that's where the Gates Foundation funding of these Indian factories and getting huge capacity up so the disease isn't coming back to the US, so we have a world economy that's going full speed that creates jobs here, and just to save lives.

ANDY SERWER: Bill, forgive me if you did this on national television last week, but have you gotten vaccinated?

BILL GATES: I did. I'm very lucky. It's the first time I've been pleased to be such an old man at 65. So I just made the cutoff. So last Friday, I had my second dose of Moderna. And I was lucky to have very modest side effects.

ANDY SERWER: That's good to hear. What about the vaccine to doses and the distribution when it comes to the developing world and the non-developing world?

BILL GATES: Yeah. So we've had five vaccines that have received gold-standard approval. Pfizer and Moderna are the first two, which are both mRNA, and then AstraZeneca, Johnson & Johnson, and now Novavax is coming along. All five of those vaccines are amazing vaccines. And sadly, those first two are fairly expensive to make and hard to scale up the volume.

So although for the rich world, they'll be the primary vaccines, for the developing world, it'll be numbers three through five. And targeting those based on which variant is where and ramping up that capacity, that is our obsessive focus now. Because if that all goes well, it's only about a six-month delta between the rich world reaching a certain vaccination level and, say-- India or South Africa or South America have had a terrible epidemic. If that doesn't go well, it could be as much as 18 months. And so the whole world be reinfected.

Right now, I'm optimistic that the pieces are coming into place even though we're going to have to be a little more targeted about where the AstraZeneca gets used and how we might actually-- this will surprise people-- combine it so you're taking one dose of one vaccine and a second dose of another one. We have trials out to see if that would avoid any of these limitations.

ANDY SERWER: Do we have the wherewithal and the supply chain and the ability to even execute something like that, though?

BILL GATES: Yeah. Our foundation worked with the big Indian manufacturers, who we do a lot with because they always do cost-reduced vaccines. Once a Western company invents a vaccine, they have no real incentive to bring the cost of manufacture down. Say it's $30, but they're selling the vaccine for $100.

Then we often go to India, and it can take 5 to 10 years, and we get a $2 version of that vaccine. In this case, we can't wait to have it re-engineered at low cost. And fortunately, vaccines 3 through 5 can be made for less than $3 a dose. So we've reserved big capacity. And these are much bigger factories than the West has. Serum by volume sells five times as many vaccines as anyone. They just happen to be mostly $2 vaccines. And there's two competitors to Serum which we are a key partner of.

So we've been getting those factories going. Serum is making AstraZeneca today. Serum will be making Novavax as that gets approved. And another one of the companies, [INAUDIBLE], will make Johnson & Johnson. And so those factories will be the primary supply to the developing countries because the numbers are just so big, and the rich countries aren't going to cede their capacity.

Now, the US by summer may have spare doses to send to the developing world as we meet US demand, depending on do we go for a third dose or exactly how that works. Sometime in the summer, the US can start those donations that'll help the developing world catch up.

ANDY SERWER: Bill, I want to go back to climate change for a minute because I wanted to ask you about your projections. And you remain hopeful that we can tackle climate change before it's too late. But do you worry that being too optimistic can undercut the urgency and the difficulty of the task, and how do you balance that?

BILL GATES: Yeah, I tried to strike the right balance in the book. There are people who think it's going to be easy, and that's really a problem. There are people who don't think it's important. That's a problem. There's people who think it's impossible. That's a problem.

And so how do you get all those people and say, very important, very hard, very doable? And I bring my optimism from other endeavors, from the magic of software at Microsoft and the magic of new vaccines that have saved tens of millions of lives through my foundation work. But I can't guarantee we'll solve it. It's a tougher space.

It's a larger-scale thing than anything I've ever engaged in, or really humanity has this as a challenge. So I'm not trying to be too negative, which can turn people off, and yet the damage of climate change cannot really be overstated. It'll be a death rate five times the pandemic per year and going up every year, and there won't be a single thing like a vaccine that can magically get rid of it.

ANDY SERWER: Yeah. That's a chilling metaphor, but maybe that is part of the urgency balance that you're talking about, right?

BILL GATES: Exactly.

ANDY SERWER: While I have you here, I have to ask you a tech question. In a recent interview in "The New York Times," you said you would advise Mark Zuckerberg to implement an advisory board. Were you referring to the oversight board that just came out with its first ruling and will decide in a couple of months about whether President Trump should be allowed back on? And do you think he should be allowed back on?

BILL GATES: Mark is, I think, a great person really trying to maintain the great things about digital social networking and curb the hard ones. Most people don't have a really good solution of how you separate out the good and the bad and the role of government in the company. The oversight board, which he might have been planning to do without, was something that I suggested to him to get it out of, OK, what does Mark think. Rather, these are some eminent thinkers. And in each country, they may reflect the cultural values of that country. And so you're bringing them in with a sense of responsibility there.

I don't think banning somebody who actually did get a fair number of votes-- well less than a majority, but I don't think having him off forever would be that good. If he's spreading lies about the integrity of the election, does that need to be labeled? Is he actually less important in terms of causing trouble in the future than he was in the past? But it'd be kind of a shame if they have to use such an extreme measure when there are people who want to see debates around his views. And splitting the digital world into, OK, here's this site that's for one party or part of one party, and here's another site for another one-- that kind of polarization is probably not a good thing.

ANDY SERWER: Right. Bill, you're one of the world's wealthiest people, and you speak on these hot-button issues at a time when people do distrust what wealthy people say on just about everything. Do you worry that public advocacy actually could, could backfire in your case?

BILL GATES: Yeah, I have to be careful. I mean, I do have an extremely high carbon footprint, although I'm paying $7 million a year to use green aviation fuel and do direct air capture and fund low-cost housing to not use natural gas and use electric heat pumps. So there's a lot of ways that I more than offset my emissions. Of course, everything I say, people should study on their own.

If they have other ways to solve the climate problem, God bless them. I hope I missed some ways to solve it in my book. And that's the beauty of having young people care so much about it. And I've got programs like a thing called Fellows to draw in the smartest young kids, whether they're currently in academia or in a big company, to encourage them to take a few years and figure out is their idea fundable so that we can get more breakthrough companies that are funded and, with a certain success rate, give us a variety of solutions.

And so I wish some of the topics I talked about, there were more voices. When it comes to malaria, let's have more people saying, let's do this. Even warning about the risk of a pandemic, that talk-- 98% of the viewership is after the pandemic started. Well, it was supposed to be the other way around. We were supposed to watch it before the pandemic and then have every country be more like Australia, where less than 10% of the damage and deaths and educational deficits have been suffered there. So I do want people to talk about climate, but I don't mind if they come up with better approaches.

ANDY SERWER: You work so hard when it comes to COVID and climate change, and people still beat you up for your trouble sometimes. Have you ever thought, why not just buy a news organization like a Jeff Bezos or Marc Benioff or start one yourself? Have you thought about that?

BILL GATES: No. I'm not going to do that. I think Jeff Bezos buying "The Washington Post" has allowed them to continue to be aggressive and be an important voice in the media space. But I don't think his goal there was to affect their message in some particular way. I think that would destroy the asset despite the wild claims that get made. So I'm glad somebody is providing long-term capital for great interactive news, but I don't see myself.

I've gone pretty full up. Just finishing this pandemic and preparing for the next one and all those global health challenges, that's a full-time job. I still spend a bit of time talking to Microsoft about that product roadmap. And now with climate, this is just such a special year with all this new money that can make a difference with the big conference.

I decided waiting to put the book out would miss an opportunity to set the framework for how we discuss it-- really understanding all the sources, thinking about the green premium, appreciating the miracle of the industrial economy and the scale of it and the low cost of it. That's what we've got to go and change. And so I decided, OK, this year, I'll have to do both the pandemic, global health, and climate discussion so I don't miss this special time.

ANDY SERWER: You certainly have a lot on your plate, Bill, and we really appreciate the time you've given us today. Bill Gates, thanks very much.

BILL GATES: Great to talk to you.