The Bill Gates Memo: Painful Truth or Climate Betrayal?

The Gates Memo — Saif Hameed & Fesel Tajdar

Transcript:

SAIF: Welcome to another episode of the State of Sustainability. I'm your host Saif Hameed. In this episode, I deep dive into Bill Gates's controversial COP 30 memo. I'm joined by Fesel Tajdar, head of projects at Acasus. Acasus is an impact-focused consultancy that partners with governments around the world on public sector reform. Across his time at Acasus, the Gates Foundation, and McKinsey, Fesel has been involved in healthcare reform work in several countries and multiple continents. I thought he was the ideal person to join me in dissecting this meaty topic.

Fesel, so excited to have you with us on the show. Where do we find you today?

FESEL: I'm in New York.

SAIF: Good stuff. Well, I hope it is not as cold, not as dark, not as depressing as London is right now.

FESEL: I hope so too.

SAIF: All right. Well, on dark and depressing notes — we wanted to jump into the Gates memo. It's at gatesnotes.com, and we'll put it in the show notes as well. This has caused a little bit of a stir in the climate community. So let me just recap context for our listeners. Bill Gates has been a massive proponent of climate change mitigation work — he's done a huge amount to fund innovation in new energy, alternative energy sources, storage, really across the full spectrum of technologies needed to mitigate climate change. What was a little disturbing for some of us who have been following along and have been big supporters of his work is that he wrote this memo just before COP 30, and the memo seemed to qualify what has until this point been fairly full-throated support for the climate change management movement. In the memo, Gates seems to be saying: look, incremental fractions of degrees of mitigation — whether the world is at 2° or 1.9° or 2.1° — that doesn't matter as much as a lot of the collateral damage we're going to be seeing along the way in terms of human life, quality of life, healthcare, and disease. And there's a whole host of social and health causes that need funding, and at this point all good projects are competing with each other for scarce resources. That was my reading of the memo.

There have obviously been a number of responses. One I found quite interesting was from Peter Singer — who is quite close to Altruistiq, since he's one of the main figureheads for the effective altruism movement, and that's one of the things that gave us our name. Our registered business entity is also called Expanding Circle, named after a Peter Singer book. Peter Singer wrote what I thought was a quite nice pithy response to the Gates memo. I thought it'd be super fun to have you here, Fesel, because you've worked for the Gates Foundation, but you're also really at the cutting edge of a number of the interventions that are quite close to Gates's heart when he writes this sort of memo. So I thought we could have a fun conversation — almost like a debate: do we agree with this position? Do we think Gates has lost the plot? Is this political pandering, or is it a fairly legitimate argument?

FESEL: Hopefully it's not oppositional views — I do work in health reform nowadays.

SAIF: Exactly. That's why it's fun — we have health reform and climate change basically duking it out.

FESEL: Well, maybe to start — Bill is not someone who is driven by one agenda or one topic. He genuinely has interests in a diverse range of areas. If you look at his giving, he's stayed close to Microsoft and what they're doing in AI — he predicted a lot of what happened in tech and AI back in the '90s. He spun up the Gates Foundation, which works on improving lives and livelihoods, fundamentally driven by the mission that every human life has equal value. And he spun up Breakthrough Energy to work on climate challenges. So he's someone who genuinely seems to be focusing on all these different problems. What I appreciate about the memo is him saying: I can't be a one-issue person. Rather, if you look at everything in totality — and in particular what's happened as a result of the massive pivot in the US's position on a variety of issues close to his heart — what does he think is important? That's what he's trying to respond to. I found his note compelling. The US is stepping back from climate in a massive way from a government perspective, but I think a lot of what's interesting in the climate space — at least in terms of government spending in the US — will still be driven by states and by what they choose to invest in and regulate. And a lot is actually just being driven by private sector and market forces. There is a need to continue investing in innovation — that's true, and that's why Bill peppers the entire note with examples of things he's invested in that are trying to solve the various problems on the path to net zero. But the US's pivot on climate is not as consequential as its pivot on health. The dismemberment of USAID has very real and immediate consequences. Generational investments like polio eradication — which I used to work on — risk being set back by decades. The US pulling apart the President's Malaria Initiative or PEPFAR has very immediate consequences in terms of lives lost, which various authors have tried to quantify. There is no private sector force that will step in. US aid was so massive in terms of global giving that global development has effectively gone down by a quarter, and on top of that many other traditional donors have also reduced their spending substantially. Health in particular is significantly underfunded relative to what's needed, and the impact is felt now as well as in subsequent years.

SAIF: I want to come back to the funding shortfall question in a moment, Fesel, but first I want to start with a few assumptions I think Gates makes — and which I think really draw the fault line in this argument. One is that the case for climate change is a question of degrees, and that incremental points of warming are on a spectrum rather than binary — rather than triggering some kind of collapse. And I think the Singer response was quite forceful on this: it's not just 2.1 versus 2.2. Two degrees is already quite a lot. And the reason we want to constrain climate change within a certain range is because beyond a certain point, forces get triggered that we no longer have control over — melting ice caps, ocean warming, massive CO2 release — and those represent not just a few decades of setback but irreversible change. Malaria and polio are obviously serious, but there's a difference between moving back a few decades and moving back irreversibly. The second assumption is that Gates seems to give innovation a bit of a blank check — which I agree he has a lot of historical data for — but it's a little troubling to feel like we're passing the buck to the next generation. And the third is that Gates seems to almost assume that certain parts of the world are going to have a really bad time, but that's not most of the world — and I think those parts that will be hardest hit, like Bangladesh, Pakistan, and India, face irreversible impacts. I'd love your views on all of that.

FESEL: To be honest, I'm not sure he's saying these tipping points don't exist. Reading through the memo, I don't think he's dismissing that they might happen. I think what he's saying is the trajectory is good — or at least not as bad as it might appear. It's certainly not as good as he would have wanted when he started giving in this area, and it's not as good as many in the climate movement would aspire to. But I think what he's arguing is that the momentum is there and will sustain. And that's the differentiation he's drawing — within the health and development space, there is nothing to sustain momentum. There is an immediate consequence of the funding cuts. I think that's the core assumption. The US government is formally being incredibly disruptive to a range of things — climate included. But has the pace of climate innovation reduced remarkably? It might be too early to tell. Is electrification with renewables just proceeding because the pricing now favours renewables — the green premium is actually now in favour of clean energy? I think his argument is that the momentum is there, it will sustain, and therefore it's not a sky-falling moment in the way that it genuinely does feel like a sky-falling moment for folks who work in global public health. And actually, on the point of the impact of climate change — the Gates Foundation does work on climate, and will continue to do so, but from the perspective of adaptation. Their large climate investments are all around agriculture, because for low-income countries, that's what's going to hit them first. And it's not a future thing — it's already happening. In Mozambique, which I've been spending a lot of time in over the past year, the cyclone season is already significantly worse than it was in prior decades. And on top of that, the malaria high season is expanding as the climate changes. So I think he's arguing: when it comes to mitigation, the momentum is there, and the incremental investment from the US probably won't pivot things one way or the other — especially if developing countries are still pushing forward on net zero policies. But when it comes to adaptation, that requires a lot of investment in low-income countries, covering agriculture and health. And that's what he thinks you should invest in.

SAIF: That's a lot of food for thought. If we start with the premise that most emissions sit somewhere within corporate value chains — energy use, transportation, agriculture — and that one of the main vehicles for decarbonising right now is corporate action, then I have to say, having interacted with hundreds of sustainability teams over the course of this year, there's a lot of pain and fear right now. And I think that comes from a sense that momentum is significantly flagging. Europe may look resilient in maintaining regulation, but that's by no means a given — we've had recent step-backs with Omnibus, which many of our listeners will be familiar with. And there have been big casualties on the innovation front too. Northvolt, which was supposed to be the big European champion on battery storage, collapsed recently. H2 Green Steel, which was supposed to be a major European response to low-carbon steel, is on the verge of collapse. I think that's because there are two forces propping up this agenda: regulation holding firm and forcing corporate action, and subsidies. And even corporate sustainability teams will acknowledge that without strong regulation, they're unlikely to be doing much. Sustainability needed to be trendy to get momentum. Whereas healthcare, vaccines, malaria, and polio have a long history of progress that's very unlikely to collapse wholesale. Maybe funding takes a step back, but it's unlikely the whole movement collapses within two years — which is not an unrealistic possibility in the sustainability space.

FESEL: So I guess the debate point is: how much will the momentum carry forward? For the companies that may go bankrupt — is what's required further government investment, subsidy, or regulation to make those companies profitable? I don't know enough about them to say yes or no. Maybe you can answer that?

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[Sponsor break – Altruistiq]

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SAIF: I think you really have to piece apart the business cases, because what often makes them work is a combination of: an expectation that there's an offtaker who will pay a premium for low-carbon products; some form of ETS trading scheme credit — similar to how Tesla has been making money for years; and an assumption that demand is there. I know companies that have invested in new types of furnaces making packaging with 60% lower emissions, and to quote one industry association: "We thought customers would be lining up at the factory door and no one came." There's a lot of this in the climate space. And I think the very fact that even Gates is now talking less about the green premium as a value proposition and more as a challenge to be overcome tells you something about how the business case is changing — a sustainability intervention needs to be cheaper now to be viable.

FESEL: I'm glad you mentioned the green premium, because that is language Bill has used for years — even before the current funding crisis. In the book he published a few years ago on climate, his primary framework was the green premium: everything you do — government policy, investment, regulation — is trying to remove it. And that framing makes sense because, as you say, so much of emissions sits in corporate value chains. You're either going to have to bend someone's arm to the point of breaking to get them to decarbonise, or you put the pieces in place such that it's actually in their shareholders' best interest to do so. I think that's a good frame. Fundamentally, it is about decarbonising the economy — where you have more GDP and more transactions, you have more emissions, which is why the developing world has relatively few. So the view of: put things in place to remove the green premium such that the private sector starts marching towards a net zero future — that does make sense to me versus the idea that you need COP 30 for governments to suddenly make big investments and get to net zero. But I do worry about the limits of that argument. I remember chatting with an investor who worked in energy — when the large asset managers said they were going to divest from coal, what he pointed out was that all it would do is force coal mining companies and coal power plants into private equity, where there's less transparency. The people who own those companies will still make a terrific yield — they'll buy them cheaply with battered valuations — and people will still buy their electricity if it's cheaper. All you've done is squirrel it away somewhere else without changing the net picture. In a globalised economy, you can just push the emissions into an unregulated country.

SAIF: I have several concerns with the idea that making sustainable innovation cheap enough to eliminate the green premium is the only way this survives. The example we usually hold up is renewable energy — it's caught on partly because it's cheaper. But there's also a large growing market for renewable energy certificates being purchased by corporations to subsidise renewable projects. That's basically a premium — it's just being covered by another entity, who gets the attribution of the emissions reduction while the renewable energy is sold at a competitive market price. I think that's a somewhat cherry-picked example. And I don't think all these innovations can ever all be cost-competitive, because someone has to pay for the cost of innovation and get a return on the development cost of creating new approaches. I just don't think we can gamble that it happens on its own. I'm fundamentally quite pro-regulation in this space, precisely because it is an externality by nature. I'll try to avoid being boxed into a view that Gates is against these things — because I don't think he is.

FESEL: Yeah, I don't think he is at all. Some of the companies he's invested in will depend on subsidies — they need runway to get to profitability, especially the further-out ideas. His nuclear investment in TerraPower has been more than a decade in the making and I still don't think they have a reactor up and running anywhere. I don't think he's arguing against those things. I think he's responding to the financing crisis that exists now — laying out his prioritisation.

SAIF: And I would say it is intrinsically impossible to figure out how to balance these scales. Even setting aside climate and just looking at the Gates Foundation — how do you weigh whether it's more important to get a child educated and literate versus saving children from dying of malaria versus eradicating polio even when the disease burden right now is quite small? How do you decide which is the better return on investment? Add climate in and I'm not sure. This is actually quite an interesting one though, Fesel — it does seem from the language Gates uses, and I think this is where he and Peter Singer probably do agree, that you should be able to quantify it. You should be able to come up with some index of quality of life, units of suffering, however you call it, to actually balance these. Do you think that's true?

FESEL: I don't. [laughter] Bill does — he has quite an analytical mind and uses things like the human development index as the metric to weigh up these investments. That's fine for him. I would find it incredibly difficult to make any of these trade-offs. I think it is intrinsically difficult. And actually, at the end of the day, the Gates memo is advocacy. Bill has a public-facing role. What he sees across global health is massive disruption — literally massive disruption that will result in hundreds of thousands of lives lost. What he's putting out in the world with his memo is advocacy to try to get the US back in, if not other donors, and also to get philanthropists to come back into the global public health space. Do you think climate change competes with healthcare for funding?

SAIF: That's an interesting question, Fesel. On my side of the fence, all the work we do at Altruistiq is corporate. And I actually think there's an interesting question around whether corporations should be doing more for healthcare. We've effectively said, as a global community, that climate change is at least 50% a private sector problem — the private sector is expected to pay for it and finance it. We don't seem to take that approach for healthcare or other big global causes. When I look at philanthropic funding, my sense is that most of it has assumed over the last several years that climate change has access to many other ways of getting funded, whereas healthcare, agriculture, and education are more worthy of philanthropic giving. And I think that was actually true. The thing I find perhaps most provocative about Gates's position is less that climate needs to compete with healthcare for funding — I don't actually think there's that much competition — and more that we have very limited political attention on climate right now versus what we need. The way it's framed almost hijacks a climate-oriented debate at COP 30 and draws attention to other initiatives and co-benefits, whereas if you're in my spot, you really want the focus to stay on solving the deep long-standing issues that have been lingering at the COPs for the last four or five years.

FESEL: I think you're right. The memo was likely timed to take some political attention that was focused on COP — and the US not showing up to COP — and try to refocus that political energy and attention on global public health. The memo is advocacy. It's to drive news attention but also the attention of politicians and the public to topics that Bill cares about, which he is absolutely allowed to do. The thing that might get me in trouble is: how valuable do you actually think COP is in terms of driving any of this? There is reason to be pessimistic that COP is really going to change the direction of the climate movement. It's the big landmark event every year, but from understanding the news, every COP seems incredibly underwhelming.

SAIF: Trust me, that is definitely true. And I wonder — is it a forum that really deserves all that political attention and energy? Are the more important discussions around climate actually happening in other fora? For climate you need the US to do something, you need China to do something, and you need the EU to regulate — and that's probably most of the battle. COP itself is a bit of a circus. A massive investment junket. So from that perspective — is his shifting political attention away from COP and using the news cycle to bring attention back to public health actually problematic? I don't necessarily think so. If you thought there was some big breakthrough coming out of COP and wanted to protect the political attention, then yes, he's done something that hurts the climate movement. If you were sceptical of what was coming out of COP anyway, he's trying to get some money back into public health. And as context for what's happening this year — this is Gavi's replenishment year. The US has walked away entirely, leaving Gavi with I think two or three billion dollars less.

FESEL: Gavi is the vaccine fund — the vaccine purchasing fund for the developing world, for our listeners. And the Global Fund, which covers AIDS, TB, and malaria, is also in a replenishment cycle this year. The US is making an investment in the Global Fund — which is terrific — but it is $1.5 billion less than had been anticipated. So yes, Bill is trying to drive political attention given that this is quite an important replenishment year for some of these big global health initiatives.

SAIF: So you're agreeing with what it was — and I think you're agreeing with it in better spirit than I am, which is fair. Last question, Fesel. When sustainability was cool — which I'd say was the period between 2018 and, let's say, November 2024 — a number of billionaires jumped into the mix and championed their own causes: the Bezos Earth Fund, and various others. And what we're finding is that a number of them have pulled out since then, retrenched, or started soft-pedalling. Out of the two of us, one of us has actually worked with Gates — and it's not me. So I'd love your view: is he doing the same thing — making a political manoeuvre to manage the current US administration — or is he actually fairly consistent, someone with multiple causes who is in it for the long term across all fronts?

FESEL: I think it's the latter. If you look at his philanthropic giving, it has always gone into the Gates Foundation, and the Gates Foundation's work on climate is purely on the adaptation side for low-income countries. His work in renewable energy has been through venture investments, advocacy, and stitching up a larger coalition through the Breakthrough Energy initiative — but it's not where his philanthropic giving has gone. So I think he's actually quite consistent. Even the framing of the green premium that he uses in this memo is the exact same framing from his book a few years ago.

SAIF: And I think you've said to me before that the thing he really wants to be known for is eradicating polio. I don't know if that's changed, but it's been a fairly consistent mission.

FESEL: It has been, and it's one that isn't in fashion. The world seems to have decided it's no longer a top priority. Bill has been supportive of that agenda for a very long time. And I do think if the world manages to eradicate polio — which I really hope we do — a lot of credit will go to him for basically pushing it through over the last decade.

SAIF: Yeah, I think that's fair. Fesel, thank you so much. Really enjoyed this conversation — a fun free-flowing meander through the Gates memo, a little bit of Mozambique, some Bangladesh and Pakistan and India thrown in, a bit of Peter Singer, and just a really great exploration of some of these topics. We tend to be quite siloed in our sustainability world, and I'm sure it's similar on the healthcare side — everyone is occupied with their own challenges. It's fun to cross the aisle and see what the other side of the fence looks like, given we're all fighting the good fight on different social missions. Thank you so much for joining us.

FESEL: Yeah, it's been a pleasure. Thank you, Saif.

SAIF: Thanks very much for listening to this edition of the State of Sustainability podcast. Please hit follow or subscribe so you get notified as soon as our next episode drops.

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