Is Bill Gates Pulling a Fast One?

posted by Dr. James G. Hood
Thursday, July 1, 2010

 

Bill Gates backs grossly misleading ad on clean energy R&D

June 11, 2010 

This is an outright falsehood*: 

 

*Actually, it is still false with or without the asterisk — even if the ad is well-meaning in a far-too-little, far-too-late sort of way. 

In fact, the asterisk goes to a statement in the bottom half of the ad (see below) that is also false:  “In 2007, American consumers spent $6 billion on potato chips; U.S. spending on clean energy R&D that year was $1.8 billion.” 

Here’s why those statements are both false and misleading: 

The ad — sponsored by the American Energy Innovation Council — compares what all of Americans spend on potato chips with what the federal government spent on clean energy R&D (narrowly defined) in 2007

Now the authors of the ad — big name folks like Bill Gates and John Doerr (of the top venture capital firm in the country) and Norman Augustine and Jeff Immelt — know better than most that the entire country as a whole (aka “America“) spends far more than $1.8 billion on clean energy R&D.  As I reported 2 years ago, Clean Edge calculates, “U.S.-based venture capital investments in energy technologies more than quadrupled from $599 million in 2000 to $2.7 billion in 2007.”  Now VC money is virtually all dedicated to R&D.  And that doesn’t even count what big businesses — like say GE or DuPont (whose former chairman and CEO signed this too) — spend on clean energy R&D, a number that is both large and growing. 

I would also note that in 2008, the Cleantech Group estimated that North American clean tech VC spending, the vast majority of which is in the United States and for clean energy innovation, was some $6 billion, a number that did drop to about $3.5 billion in 2009 because of the global economic downturn. 

The authors also know that, under Obama, the federal government has sharply increased funding for clean energy innovation (defined in the broad manner that the AEIC does in its own report).  Indeed, the AEIC says on its website: 

In order to maintain America’s competitive edge and keep our economy strong, the United States needs sizable, sustained investments in clean energy innovation. We believe that $16 billion per year – an increase of $11 billion over current annual investments of about $5 billion – is the minimum level required 

So what is it — $5 billion or $1.8 billion? 

The report defines RD&D as “research, development, and deployment” — but the federal government is now spending a staggering amount of money in the stimulus bill on RD&D in clean energy.  McKinsey said in a 2009 new report on the stimulus that it “appropriates $97 billion in energy-related funding,” money mostly spent over a two-year period.  And that doesn’t count the many clean energy tax credits that were funded prior to the stimulus or the funding in the regular federal budget. 

It is completely inappropriate that the signatories of the ad would use numbers that they know are triply deceptive: 

  1. Using federal spending, rather than actual U.S. or American spending
  2. Using R&D narrowly defined
  3. Using 2007 numbers

Of course, this is what we have come to expect from Bill Gates [see Bill Gates disses energy efficiency, renewables, and near-term climate action while embracing the magical thinking of Bjorn Lomborg (and George Bush) and Bill Gates is wrong about “energy miracles”].  But I confess to be puzzled why the other folks signed such a misleading ad. 

UPDATE:  To be clear, I’m not puzzled why they endorse much more federal RD&D spending — who wouldn’t? — just why they’d sign off on this deceptive ad.  I would note that most of the other signatories almost certainly endorse comprehensive climate and energy legislation — aka cap and trade (see John Doerr and Jeff Immelt: To become the green tech leader, “We must put a price on carbon and a cap on carbon emissions”).  In fact, GE and DuPont are members of USCAP, which basically designed the Waxman-Markey bill. 

Now I certainly endorse the call for far more federal spending on clean energy R&D&D (deployment).  Indeed, I have been advocating that both inside and outside of government for two decades now.  My 1996 cover story in the Atlantic Monthly — published when I was principal deputy assistant secretary of energy (coauthored with the Deputy Secretary) — “MidEast Oil Forever?” Drifting Toward Disaster was subtitled: 

Congressional budget-cutters threaten to end America’s leadership in new energy technologies that could generate hundreds of thousands of high-wage jobs, reduce damage to the environment, and limit our costly, dangerous dependency on oil from the unstable Persian Gulf region. 

Sound familiar? 

Where the heck were all of these CEOs when Newt Gingrich and company were blocking President Clinton’s efforts to increase clean energy R&D?  Where were these guys when Bush was cutting funding for energy efficiency and renewable energy  deployment? 

The problem with the AEIC ad and report is that while more R&D is certainly needed now, what they propose is simply too little, too late for the climate crisis we now face.  We need total U.S. spending on clean energy RD&D of at least $100 billion a year — and most of that is needs to come from the private sector and that requires passing comprehensive energy and climate legislation with a shrinking cap and rising price for carbon (see “The only way to win the clean energy race is to pass the clean energy bill“). 

The report barely mentions climate change and simply can’t bring itself to endorse strong legislation with a specific carbon target.  And it offers no obvious way to pay for this new $11 billion a year federal spending in a time when conservatives demagogue against spending far less money on the most obvious things like efforts to create jobs in the midst of the biggest economic downturn since the great Depression. 

So from a political perspective, it is a non-starter.  For CP readers, it is just another missed opportunity for credible mainstream business leaders to spell out the true nature of the challenge we face and the true scope of the solution we need. 

 

No, guys, it’s time to get off the damn couch, put a shrinking cap and rising price on carbon, deploy the low-carbon technologies we have now at a massive scale, while, sure doing some more federal R&D, but mostly deployment (see “The breakthrough technology illusion“). 

UPDATE:  To repeat and expand on all that is wrong with this ad: 

  1. It is factually wrong and I think, given who wrote it, intentionally misleading.
  2. The ad never explains that Democrats and the Obama administration in particular are aggressively working to “get off the couch and invent our future” — and the main obstacle to doing even more isn’t American laziness but conservative obstructionism.
  3. The potato chip analogy trivializes the issue.  OK, once you learn about Americans actually spend more on clean energy R&D than we do on potato chips — and considerably more on RD&D — should you lose interest?  No, because the correct comparison is to, say, the nation’s entire energy bill, which is several hundred billion dollars a year, or the likely consequences of failing to take action on climate change, which is a lot, lot more:  Scientists find “net present value of climate change impacts” of $1240 TRILLION on current emissions path, making mitigation to under 450 ppm a must.
  4. The ad talks about a “once-in-a-generation opportunity.”  Huh?  We’ve had three decades of opportunity to dramatically increase clean energy R&D, thwarted time and time again by conservatives.  Indeed, Pres. Reagan by himself cut clean energy RD&D from levels these guys wanted.  Where have they — and big business — been for those three decades?  Answer:  Mainly either doing nothing politically on energy or supporting conservatives.
  5. The “solution” they propose would certainly be very useful, but ultimately far too little and far too late for the problem at hand — global warming, a problem that you may notice never gets mentioned at all directly in this ad.  Moreover, the solution they propose is not “paid for,” to use DC lingo and thus will be squashed by, yes, you guessed it, conservatives in Congress.   We need leaders like this stepping up to explain bluntly to the public what really needs to be done to solve our energy problems, not half one-tenth measures.
  6. And yes, Bill Gates has been pushing dubious messages on clean energy for a while:

Error-riddled ‘Superfreakonomics’, Part 2: Who else have Nathan Myhrvold and the Groupthinkers at Intellectual Ventures duped and confused? Would you believe Bill Gates and Warren Buffett? 

Article courtesy of  http://climateprogress.org 



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