$3 million pledged for fuel research

September 22, 2006|By Cox News Service

NEW YORK -- British entrepreneur Richard Branson said yesterday that over the next decade he will invest $3 billion in expected profits from his Virgin airline and train businesses into alternative fuel research to fight global warming.

It is one of the biggest contributions ever to a specific social cause, and may be the largest for research into avoiding climate change from a private source, charity experts said.

Branson, 56, a billionaire known for his Virgin brand of companies and globe-hopping adventures, made the announcement during the second day of the Clinton Global Initiative, a three-day summit founded by the former president that brings together political, business and nonprofit leaders to combat global ills.

"Our generation has inherited an incredibly beautiful world from our parents and they from their parents," Branson said at a news conference. "We must not be the generation responsible for irreversibly damaging the environment."

Branson's plan would funnel all the profits from his transport businesses into initiatives to come up with alternatives to fuels such as oil and coal, which produce carbon dioxide when burned. Scientists have linked that heat-trapping gas to a warming climate.

Some of Branson's funds would go toward research inside his companies, while other money would be invested in outside projects.

Earlier this month, Branson launched the Virgin Fuels company to invest $400 million in renewable energy over three years. Its first investment was in a California company that plans to build and operate ethanol plants.

Branson said the idea for his $3 billion plan formed after former Vice President Al Gore, who has long warned of the dangers of global warming, visited him in England several months ago.

Branson said Gore told him: "You're in the position where you can make a grand gesture, and maybe that can encourage other companies to make grand gestures as well."

"I've only woken up to the real potential catastrophe this world faces in the last three years," Branson said later at the summit. "We're in the airline business and the train business and do our fair share of damage to the environment."

Airline industry experts questioned whether Branson can follow through on using all his expected profits for this research.

"It's a very admirable idea, but does it mean he's not going to have a rainy day fund?" said Tim Sieber, vice president of the Boyd Group aviation consulting firm.

Boyd said if there is another event like the Sept. 11 attacks or a disease outbreak affecting travel, or "suddenly there is a real revenue hit and he needs the cash flow to maintain the business, then all bets are off."

Branson's pledge brought the commitment total at Clinton's annual summit to $5.7 billion in funds and programs yesterday, more than double the $2.5 billion the summit raised last year. The commitments are intended to help fight poverty, improve global health, resolve religious conflict and combat global warming.

"Richard's commitment is groundbreaking not only because of the price tag - which is phenomenal - but also because of the statement that he is making: `Clean energy is good for the world and it's good for business,'" Clinton said.

Branson's plan would be one of the largest contributions to a specific cause and is part of trend of nontraditional giving, said Stacy Palmer, editor of the Chronicle of Philanthropy. She said the very rich, particularly people in technology industries, have turned toward investing in businesses to do good rather than just writing a check to a charity.

She said Branson's pledge is also unusual for its focus on climate change.

"While certainly there is interest in global warming, it has not received a lot of money," she said. "I can't think of anybody who has committed such a big amount of money to that cause."

The Bush administration said Wednedsay that it is spending $3 billion this year on climate-related technologies.

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