The Battle Against Global Warming Is the New Cold War

There is now a broad movement afoot to return the venture capital model to its philanthropic roots, specifically where climate change is concerned.

Bill Gates’ Breakthrough Energy Ventures and, more recently, Jeff Bezos’ Earth Fund are both multibillion-dollar philanthropic entities that act, essentially, like very risk-tolerant angel investors. There are others, too, including Arati Prabhakar’s Actuate, which plans to use philanthropic funds to do interdisciplinary research with a social payoff. The Cambridge, Massachusetts-based Prime Impact Fund, which draws from multiple sources of philanthropic wealth, issues long-term loans to startups that promise to launch “gigaton-scale emissions projects” like extracting lithium sustainably, pulling carbon dioxide from the atmosphere, and heating and cooling in environmentally friendly ways. If a single investment yields returns, those can be reinvested or contributed to another philanthropic cause. If investments don’t work out (they are high-risk, so of course some go bust), the contribution will be viewed much the same as a traditional grant.

If the idea of giving billionaires tax breaks while they decide which climate technologies get angel funding makes you nervous, there is a more democratic option—green banks, which use public capital as seed money to make low-interest loans to companies with emissions-reducing technology. Green banks have some bipartisan support, and a recent House proposal suggested endowing a nonprofit national climate bank with $35 billion in federal funds. Reed Hundt, founder of the Green Capital Coalition, says that such a public investment would be leveraged to borrow $350 billion, which could then be loaned to projects that have the potential to reduce carbon emissions significantly. By reinvesting this money as the loans are paid off, he says, the scheme could put $1 trillion into early-stage technology over the next 30 years.

Green banks could be coupled with other public initiatives like government-backed green bonds, or even something like war bonds, which would allow individual investors to put their retirement money to work supporting an environment they wouldn’t mind growing old in. Hundt sees green capital expansively: “The goal here is to have renewables provide cheap and clean power to 100 percent of humanity really, really quickly, while at the same time shoving the carbon industry into the past.”

This sounds wonderful, doesn’t it? We already have the tools, we have the people and the programs, we even have a decent amount of capital. So why aren’t we already making the future happen faster and shoving carbon into the past?

It’s ironic, but in many ways all these Cold War institutions and the relatively exotic new sources of philanthropic and green capital are more shovel-ready than the mind of the American voter. What’s wrong with us? The answer, I think, is that we have been conditioned to be passive about technological growth, and after years of arguing over whether climate change is occurring, we’ve also become resigned to the idea that tackling it in a robust way is politically impossible. It is time for us to reexamine these myths—and also to design a new innovation system that benefits more people more directly.

Blame a legacy of Cold War secrecy, as well as a much more recent dogma that relentlessly celebrates individual entrepreneurs. The economist Mariana Mazzucato, director of the Institute for Innovation and Public Purpose at University College London, has spent years studying the way the US government uses taxpayer funding for innovation. She points out that the system has long socialized the risks of bringing technology to market while privatizing the gains when entrepreneurs such as Steve Jobs applied that technology to consumer goods. In other words, a lot of innovative tech that has made some people rich was built on public investment, but taxpayers have no idea they underwrote the whole thing.

Mazzucato suggests that taxpayer-funded innovation should instead put us in control—by including ways for citizens to influence policy, transparency in funding, and ways for the funders—us—to profit. And politicians should start talking about taxpayer investments in technology as a source of pride. “You’re part of this massive shift in global capitalism, greening production, distribution, consumption patterns—it kind of makes you happy to be alive!”