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When Bill Gates is interested in something new, his organizing, capacious intelligence learns everything about it, and he imagines ways it could be better. Now the cofounder of Microsoft and the Bill and Melinda Gates Foundation is interested in energy. At his offices in Kirkland, WA, he spoke to Jason ­Pontin, Technology Review’s editor in chief. Gates called for energy “miracles” and a more rational energy policy, and he explained how being a software “fanatic” prepared him to invest in new ideas.

TR: The Gates Foundation has invested in solutions to big problems like infectious diseases in poor countries. Providing clean energy for the nine billion people the planet will hold in 2050 is a problem that’s civilizational in scale. What can philanthropy contribute to energy research?

Bill Gates: Well, basically not much. The energy market is an absolutely gigantic market, big enough that if you can come up with cheap ways of making electricity, then that should be done with typical big-firm risk taking, small-firm risk taking. On the other hand, the way capitalism works is that it systemically underfunds innovation, because the innovators can’t capture the full benefits [of their innovations]. But there’s a net benefit to society being more R&D-oriented. And that’s why in health research, governments do fund R&D.

TR: You are a member of the American Energy Innovation Council, which calls for a national energy policy that would increase U.S. investment in energy research every year from $5 billion to $16 billion. I was stunned that the U.S. government invests so little.

BG: I was stunned myself. The National Institutes of Health invest a bit more than $30 billion.

TR: So why couldn’t huge, regular, dependable investments from your foundation make a difference?

BG:We might have some involvement where it’s connected to things that wouldn’t happen for poor people otherwise. So there may be some particular biomass approaches for getting local energy out where there’s no roads and infrastructure, where there wouldn’t be a market signal for that type of innovation.

But [as an investor] I’ve put my money into Vinod Khosla’s venture fund. I’ve put money into Nathan Myhrvold [and his Intellectual Ventures fund]. Nathan has this thing that invents ideas broadly, many of which are energy-related. Some of those energy-related things will result in startups. One has so far: this amazing, wild nuclear [reactor design], TerraPower.

TR: If energy research is underfunded by $11 billion, what is a better approach to funding new energy technologies?

BG: It’s not a problem that lends itself to a Manhattan Project-type approach. It has to be low cost and usable in different circumstances. You can’t just get a bunch of smart people together and know which path they should go off and pursue. Actually, it’s amazing that that worked for the Manhattan Project.

TR: It worked because it had a very specific end: they wanted to build the biggest bomb in the world and end the war.

BG: They knew what they wanted to do. I guess in a vague sense we can say that we want energy that costs, say, a quarter of what coal electricity does and emits zero CO2. We can write that down. But there are many paths to get there, each of which a realist would look at and say, “Wow, there’s a lot of difficult things along that path.” So I think it’s very important, both to give poor people cheap energy and to avoid hugely negative climate change, that the U.S. and other governments fund basic research. The irony is that if you actually look at the amount of money that’s been spent on feed-in tariffs and you properly account for it–tax credits, feed-in credits in Spain, solar photovoltaic stuff in Germany–the world has spent a massive amount of money which would have been far better spent on energy research.

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