Written by Katie Daigle

WASHINGTON (Reuters) – When it comes to climate change, Bill Gates considers himself a realist — even if that means acknowledging that the world has no chance of limiting warming to 1.5°C.

“Given the overall size of our industrialized economy…we’re going to have to do an incredible job of staying below 2 degrees,” he said.

But about achieving the 1.5C target of the Paris Agreement? No one wants to be “the first to say it,” Gates said in a video interview with Reuters, but the math shows it’s no longer within reach.

However, the software developer-turned-philanthropist has been bullish about climate innovation — launching several domains developing low-carbon technologies with funding from Breakthrough Energy Group, which Gates founded in 2015.

Gates has invested more than $2 billion in climate technologies, including direct air capture, solar energy, and nuclear fission. The 14-year-old fission company under the Breakthrough umbrella, TerraPower, aims to have an experimental reactor operational by 2030.

said Gates, co-founder Microsoft Corporation (NASDAQ:).

Gates spoke with Reuters ahead of the release of his annual letter – which reflects on 2022 and describes what he’s most excited about in the coming year.

He has funneled $20 billion of his money into an endowment for the Gates Foundation, which plans to increase philanthropic spending on public health and education from $6 billion to $9 billion in the coming years.

He also paid tribute to Warren Buffett for his contribution, which Gates said has totaled $45 billion since 2006, after shares of Berkshire Hathaway (NYSE:NYSE) soared.

However, Breakthrough Energy operates separately from the Gates Foundation. In his letter to shareholders, Gates made it clear that the climate problem is too big for philanthropy alone to address.

“There is not enough money, so you have to have some creativity,” he told Reuters. “The idea that this can be done with brute force, there is no chance.”

Companies need investment and technical support to prove their low-carbon ideas beyond the pilot stage — and then to scale up manufacturing, he says. However, any profits from Breakthrough Energy are channeled back to the group or the Foundation.

Some of the companies under Breakthrough that are developing Direct Air Capture (DAC) technology — a technology designed to pull carbon dioxide directly from the atmosphere — have their sights set on nearly $3.5 billion in newly announced US contracts to build DAC plants and fund research grants.

“We have a number of Direct Air Capture companies that will be bidding to be part of those projects,” he said, noting that the recent inflationary reduction law has boosted prospects for climate innovation. He did not elaborate on the DAC companies’ plans.

In manufacturing, he said, the steel and cement industries have made “fantastic” progress, a change from his concerns about the sector just two years ago.

Manufacturing is responsible for about a third of global warming emissions.

Now, “There’s no room for climate change mitigation. I feel like, ‘Oh, that’s totally exposed,'” he said.

Instead, with the world poised to exceed 1.5°C of warming, he said the challenge is shifting toward helping people adapt to a harsher, hotter future.

“In addition to mitigation, which will continue to be the bulk (of the Breakthrough Energy investment), we will also be financing work related to adaptation.” This could include technology to help control wildfires, using reef-type structures to create barriers against floods, or developing crop strains that can withstand drought.

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