Bill Gates is so worried about the prospect of global warming that he has pledged $2 billion of his own fortune to spur research and development (R&D) projects to, according to The Atlantic, “invent [our] way out of the coming collision with planetary climate change.”

He wants other billionaires to join the effort by ponying up some of their own wealth, but he also wants governments to impose taxes on carbon substantial enough to wean humankind off coal and natural gas. Mr. Gates thinks that the private sector is so “inept” that it cannot or will not rise to the challenge for two reasons.

For one, “there’s no fortune to be made” by investing in alternative energy sources. Second, most of the companies in which private venture capitalists invest “go poorly,” whereas “since World War II, U.S. government R&D has defined the state of the art in almost every area.”

That last statement is breathtaking and, by the accounts of many economists who have studied the wellsprings of innovation, simply wrong. Even a blind squirrel eventually finds an acorn, so it is not surprising that throwing tons of money at government-sponsored research projects sometimes pays off. But the public sector is too distant from markets and too much influenced by special interests to innovate routinely. History is littered with failed public investments in search of the next new thing. Remember President Carter’s taxpayer-financed push to develop a synthetic fuel to replace gasoline?

It is of course true that most startups financed by venture capitalists bomb, as do most privately funded R&D projects. Experimentation and disappointment are the hallmarks of a vibrant, market economy. Only by learning what doesn’t work can entrepreneurs learn what does. Freedom to fail is as key to innovation and progress as is the freedom to succeed. The pace may be slow, as Mr. Gates opines; it takes time, money and effort to figure out what investments ultimately will be profitable because no one person, especially so a politician or bureaucrat, possesses that knowledge at the outset.

Moreover, as documented in Matt Ridley’s new book, The Evolution of Everything, echoing Terence Kealey’s earlier The Economic Laws of Scientific Research, most of the major inventions of the past 150 years have originated not from scientific advances or from taxpayer-financed R&D, but from the private sector’s engineering departments and shop floors as people on the ground encountered and solved practical production problems. The steam engine, for example, preceded the discovery of the second law of thermodynamics, not vice versa.

According to the Energy Information Administration, although total annual carbon emissions in the United States rose somewhat in intervening years, they are now approaching levels not seen since 1990. And if one looks only at the CO2 produced by burning coal, emissions in 2012 are close to what they were in the early 1980s. That is a consequence of utilities responding to environmental concerns and, perhaps more so, because the shale gas revolution made switching from coal to natural gas a rational (profitable) economic calculation.

Improvements in environmental quality track economic growth in every nation on Earth, once annual incomes per capita reach and then exceed about $8,000. The best recipe for clean air and clean water is market-driven economic progress, not government intervention.

Although Mr. Gates deserves applause for putting his own money where his mouth is, he is mendacious in maligning the economic system that made him the richest man on the planet. He is properly concerned that action against global warming will come to naught unless joined by China, India and other developing nations. That is unlikely, at least until they have become rich enough to worry about their own environments.

Climate change is not “settled science”—no science ever is. Even if we assume that global temperatures are climbing and that rising temperatures are caused primarily by the burning of fossil fuels, people like eminent physicist Freeman Dyson are correct to point out that the “consensus” ignores the benefits of CO2 emissions for, among other things, global food production.

Market forces triggered by changes in relative prices explain why coal is being replaced by natural gas in generating electricity. Such Schumpeterian “creative destruction” and the incentives thus unleashed are far more reliable than rule by climate change “experts” and the unholy alliances between the private and public sectors (“crony capitalism”) to which government intervention always gives rise.