As President Trump takes even more steps to pull back on climate action, Bill Gates is emphasizing how crucial government policies are crucial to addressing climate change.
In his annual year-ahead letter, the billionaire Microsoft cofounder and philanthropist warns that the market alone is not enough to change our climate reality.
“Without a large global carbon tax (which is, unfortunately, politically unachievable), market forces do not properly incentivize the creation of technologies to reduce climate-related emissions,” Gates writes.
To stop global temperatures from increasing, we need to replace all emissions-emitting activities with affordable alternatives, Gates says. He particularly calls out industrial emissions and aviation as areas that need innovation.
And government policies—“in rich countries,” he notes—are crucial to bringing about that innovation, “because unless innovations reach scale, the costs won’t come down and we won’t achieve the impact we need.”
Climate change is linked to poverty and health
Gates’s annual letter comes just a few months after he wrote a blog arguing that the world is too focused on cutting short-term emissions, and that focusing on climate change risks getting in the way of addressing global poverty.
That post sparked some backlash from environmental activists and experts who noted that climate and development goals are interconnected.
“If you look around the world right now, climate change is directly undermining human development goals, poverty eradication, and health goals,” Rachel Cleetus, senior policy director for the climate and energy program at the Union of Concerned Scientists, told Fast Company back in October.
In his annual letter, Gates said that, “If we don’t limit climate change, it will join poverty and infectious disease in causing enormous suffering, especially for the world’s poorest people.”
Climate change will also worsen both those hardships: Experts have long said that climate change exacerbates disease outbreaks and pandemics, and that it is expected to push up to 132 million people into extreme poverty by 2030.
‘Investing more than ever to climate work’
In his October post, Gates said that “although climate change will hurt poor people more than anyone else,” the biggest problems to poor people are poverty and disease.
“Understanding this,” he wrote, “will let us focus our limited resources on interventions that will have the greatest impact for the most vulnerable people.
In his year-ahead letter, though, Gates emphasized climate change as a critical area for the world to focus on. He added that he will be “investing and giving more than ever to climate work in the years ahead while also continuing to give more to children’s health.”
Some of his investments around climate change will use AI. His foundation has committed $1.4 billion to helping farmers adapt to climate extremes, and in his annual letter, he says that with AI, “we will soon be able to provide poor farmers with better advice about weather, prices, crop diseases, and soil than even the richest farmers get today.”
How Trump has devastated climate action
The Trump administration has taken multiple steps to inhibit America’s climate progress. Most recently, Trump pulled the country out of a a landmark climate treaty, the U.N. Framework Convention on Climate Change.
Trump has also canceled billions in green energy projects, rolled back Biden-era government incentives for clean technologies, and cut hundreds of millions of dollars from climate and renewable energy research.
At the same time, Trump has rapidly increased the government’s support of greenhouse gas-emitting fossil fuels, opening new mining leases, loosening coal plant emissions standards, and forcing coal plants that were going to close to keep operating.
Trump’s actions have devastated multiple climate companies. Even Gates’s own climate actions faced a challenging 2025: In March, Breakthrough Energy, a climate group Gates started 10 years ago, laid off dozens in its U.S. and Europe policy teams.
But Gates will continue to “put billions” into climate innovation, he writes—while also focusing on health and education. And all three of those areas, he notes, “can improve rapidly with the right government focus.”