(Bloomberg) – US government incentives to encourage investment in emerging technologies like green hydrogen will have “healthy” effects even if they risk distorting trade in electric cars between Europe and the US, Bill Gates said.
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In a podcast interview with Nicolai Tangen, the head of Norway’s $1.3 trillion sovereign wealth fund, Gates praised the government’s policies to spur the green transition.
“There is essentially no green hydrogen market today,” said the Microsoft co-founder and philanthropist. The idea that for the next decade “European governments will fund some projects in Europe, the US will fund some – I think that’s healthy. It will create a market,” he said. “For the next ten years, it’s great for the whole world to have that there.”
Although technologies such as solar and wind power now provide cheaper energy than alternatives to fossil fuels, they are not always available. To ensure a successful green transition, they need to be combined with technologies such as green hydrogen, carbon capture and storage, and industrial battery systems, which are still in their infancy.
The $374 billion provided by the US Inflation Reduction Act to support climate and energy-related technologies is intended to drive innovation aimed at addressing the emissions reduction challenge.
Green hydrogen is “still about four times more expensive than it needs to be,” Gates said, adding that tax credits in the IRA will “drive massive activity” and reduce the “green premium” — the price difference between an existing product and its future carbon-neutral counterpart .
“If we innovate to make that green bounty very small, ideally zero or even negative, then adoption on a global basis, not just in rich countries but in middle-income countries as well, will happen fairly naturally,” Gates said .
Still, Gates expressed disappointment that the IRA “slightly distorts” trade in electric vehicles and components between Europe and the US.
“We should have free trade in everything to do with cars,” Gates said. “This competition is good for both regions and I hope this thing can be refined so it doesn’t distort anything about the electric car market.”
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