Bill Gates reveals major problem with Australia's climate plan

Billionaire philanthropist and Microsoft founder Bill Gates has outlined what he thinks the world must do to avoid a climate catastrophe.

And it highlights why the assumptions underpinning Australia's plan to reduce emissions are facing some major obstacles.

The Federal Government's plan to reach net-zero carbon emissions by 2050 relies significantly on the future development of technology. While the Morrison Government is assuming greater uptake of solar power and electric vehicles, it is also relying on largely unproven technologies such as carbon capture and storage and unspecified future "technology breakthroughs" to achieve the target.

That's not going to be easy, according to Gates.

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Writing for the Financial Times on the eve of the COP26 global climate change summit, the fourth-richest person in the world explained how it would be "excruciatingly" hard to build the new technologies the world so desperately needs.

"It is incredibly challenging for any start-up to commercialise its product, but it is uniquely so for energy companies," he wrote.

Software companies like Microsoft can begin with very little overheads and are able to scale up quickly and cheaply because they are built on the back of computer code, which can be easily tweaked and replicated.

"Climate-smart technologies are much more difficult to navigate. Once you can make green hydrogen in a lab, you have to prove that it works — safely and reliably — at scale," Gates wrote.

"That means building an enormous physical plant, ironing out engineering, supply chain and distribution issues, repeating them over and over again and steadily cutting costs.

"Demonstration projects like this are hugely complicated, extremely risky, and extraordinarily expensive — and it’s very hard to finance them."

Australian mining magnate and Fortescue boss Andrew Forrest understands this, saying last month on ABC radio that "carbon capture and storage fails 19 out of 20 times" – much to the chagrin of federal Energy Minister Angus Taylor.

Cheap financing required to accelerate green innovation: Gates

Even once the breakthroughs are achieved, it typically takes a while for the price to make them commercially viable.

"In clean technology, there is yet another complication," Gates wrote.

"When all that complicated, risky, expensive work is finished, you end up with a product that does more or less the same thing as the one it’s intended to replace — green steel has pretty much the same functionality as today’s steel — but costs more, at least for a while.

"Naturally, it’s hard to find buyers, which means banks charge more for loans. The high cost of capital, in turn, increases the price of the products. Because financing is so hard to come by, commercial demonstration can be an excruciatingly slow process."

When Scott Morrison announced Australia's net-zero plan, he called the future technologies it was predicated on "a given". But unless world leaders were able to massively accelerate investment into clean technologies to speed up their development, they likely wouldn't come soon enough, Gates said.

Morrison himself has been driving this point home when arguing against criticism of developing nations relying on fossil fuels.

"Unless the technologies are both affordable and scalable in developing countries, then you will not see emissions fall in those countries," he told reporters overnight as he left for the UN climate summit.

"The way that is achieved for them is ensuring that we can get those technology costs as low as possible."

When that happens, remains to be seen.

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