What’s behind Jeff Bezos’ $10 billion climate plan?

There aren’t many details yet on Jeff Bezos’ Earth Fund — the $10 billion he pledged last week to address climate change. But it’s easily the largest philanthropic commitment that isn’t from a government. Other investors in climate tech say that while we need policies, will and unity, we also need a whole lot of money.

I spoke with Jay Koh, a managing director of the private equity firm The Lightsmith Group, which focuses on adaptation technology, and I asked him where this $10 billion fits in the landscape of climate investment. The following is an edited transcript of our conversation.

Jay Koh: $10 billion is a big number. How you apply that $10 billion can dramatically change the scale of capital that actually is moved as a result. There’s a few initiatives, like the Rockefeller Foundation and MacArthur Foundation, that focus on something called catalytic capital, where small amounts of concessional investment or even grant funding can reduce the potential or perceived risk for commercial investors and encourage them in much larger scale to come in to a different, new investment strategy.

Molly Wood: This announcement was met with a lot of skepticism and a lot of Monday morning quarterbacking about other things that Jeff Bezos could do or should be doing. Do you think that’s fair?

Koh: I’m an all-the-above kind of guy. I think right now, if you really take the climate change problems seriously — and I think we all should — we face an enormous and potentially existential challenge to the way that life operates here, so I applaud this commitment. The scale of it is something that’s designed to signal that kind of seriousness. What I think would be great would be to use it, not simply just to double down on everything that we have now, but to be thoughtful about how it could mobilize even more funding, how we could actually support targeted kinds of innovation, how we could actually particularly support the disadvantaged populations in developing countries out there that are really going to be taking it on the chin here.

Wood: I want to ask you about priority setting. What I’m curious about is whether this amount of money by its sheer heft and weight has the potential to create almost like a SoftBank effect. What if Jeff Bezos said, “I’m going to use this fund for cricket meal“? Will a bunch of other things get neglected and cricket meal would take off?

Koh: If I could wave a magic wand with the $10 billion, I would say that it should be done over a number of different years, and then you should pick a variety of strategies where maybe half of it, you doubled down on everything that’s working best right now, just accelerate it. Then, I would take a bunch of it and try to think about exactly what you’re talking about, which is: Are there one or two really important long-shot ideas or long-shot areas or areas of really important focus where this could have a dramatically important effect, by pulling back in time some of these innovations or developments that we otherwise are not going to see? One of these, for example, is health care. I think the impact on human health from climate change is going to be dramatic, profound and very complex. We’re seeing some of that right now. Three years ago, you would not have said childhood asthma is a big climate change problem. But if it turns out you light half of California on fire, most of Australia, you instantly have a lot more childhood asthma. The knock-on effects on human health from respiratory ailment and so on are things we’re now just really beginning to understand. There’s work being done on this at the Chan School of Public Health at Harvard, but I think we’re at the beginning, not the end, of understanding how that’s going to happen and the need for technologies and solutions to understand the path of that impact on people and ways to address it over time.

Related links: More insight from Molly Wood

Fortune, Bloomberg and The Atlantic all wondered a little more about how much influence Bezos could end up having on what direction our future climate efforts take, including the idea that he could end up funding lobbying or even political candidates and potentially end up with an outsized influence on what solutions or policies do come about over the next … however long it takes him to disburse $10 billion. Basically what Jay Koh said about catalytic capital. It’s the kind of money that could kick-start a lot of things, and investors and donors will follow where that money goes. But inevitably, some things could get uncatalyzed as a result.

You may remember a few months back we visited X, Alphabet’s moonshot factory, to find out what it is developing in terms of climate innovation. Well, one of those climate-related moonshots is done.

Alphabet announced it is shutting down Makani, a wind energy company that used basically giant kites to harvest wind energy more cheaply and efficiently than windmills. Shell was an investor, but X said commercializing the tech was still a long way away. Makani is part of Alphabet’s “Other Bets” division, which lost $4.8 billion in 2019.

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Here’s some good news from the world of artificial intelligence. For the first time, machine learning and AI have discovered a brand-new antibiotic that was able to kill all kinds of disease-causing bacteria, even some that couldn’t be killed by any other drugs. It could be an entirely new model for using computers to sort through millions of chemical compounds and come up with precisely targeted medicines, which is amazing, actually.

In other amazing news, I’d also like to report that billionaire investor Warren Buffett has at long last traded in his $20 flip phone for an iPhone. I think we can agree these events are of roughly similar consequence.