The multinational program, known as "Mission Innovation," was announced at the United Nations Climate Summit in Paris.
Along with public funding, the high-profile investors -- known as the Breakthrough Energy Coalition -- also plan to provide money for the development of zero-emission energy technology. The group, being lead by Microsoft co-founder and philanthropist Bill Gates, includes Salesforce.com founder and CEO Marc Benioff, Amazon founder and CEO Jeff Bezos, Virgin Group founder Richard Branson and LinkedIn founder Reid Hoffman.
In a research paper published today, Gates pointed out that the ratio of government spending on research and development compared to total spending in energy is 0.4%. In health, the ratio is more than twice that.
"In defense [spending], it is more than 22 times higher." Gates noted.
The International Energy Agency (IEA) has estimated that wind and solar photovoltaic energy could cut the world's annual emissions from electricity generation 22% by 2050. However, because solar and wind are "intermittent" energy sources, what is needed to cut the world's annual emissions further are advances in energy storage technology, Gates said.
The Breatkthrough Energy Coalition will focus on early stage, clean energy innovation. For example, in his research paper, Gates identified flow batteries and solar paint as two high-risk technologies that merit more private-sector investment. Solar paint could be applied to any surface to create a photovoltaic energy-producing layer.
Flow batteries get their name because they use liquid chemicals (electrolytes) that are separated by a membrane. The reaction between the two chemicals frees up electrons, creating electricity. Flow batteries have an advantage over today's most popular energy storage technology -- lithium-ion batteries -- in that they can scale more easily because all that's needed to grow capacity is more liquid; the hardware remains the same. As a result, flow batteries have the potential to be more cost effective than lithium-ion batteries.
Another option, Gates said, would be to deploy wind and solar power technology wherever sun and wind are plentiful and connect them to other places using a high-voltage grid. These options are already being used in some places, but need to be cheaper and better performing to be useful on a larger scale.
Among the 20 nations participating in Mission Innovation are the the world's five most populous countries: China, India, the United States, Indonesia and Brazil.
"They stretch across five continents. And when you add all partner countries together, they represent 75% of the world's CO2 emissions from electricity, and more than 80% of the world's clean energy R&D investment," the White House said in a statement.
The 20 participating nations in Mission Innovation will provide about $20 billion in the next five years. The U.S., which spends about $5 billion now on clean energy research, would provide $10 billion between now and 2020, according to the pact.
The U.S. government spending will include programs at 11 agencies with the largest investment at the Department of Energy (DOE). Those programs will focus on low carbon technologies, including energy efficiency, renewable energy, nuclear energy, electric grid technologies, carbon capture and storage and advanced transportation systems and fuels.
At the DOE, the programs are implemented through a number of mechanisms including cost-shared projects with the private sector, research and development activities at the National Laboratories, grants to universities, and support for collaborative research centers aimed at key energy technology frontiers. Obama said he will also use "suites of policy tools" including regulatory, spending, credit support and tax incentives to support clean energy technology.
Helping the adoption of clean energy has been a dramatic drop in prices for technology, such as photovoltaic modules -- the units that collect energy from sunlight and convert it into electricity.
From 2008 to 2014, solar photovoltaic module prices declined by 80%, LED prices declined nearly 90%, and wind and battery prices declined by more than 40%, according to a statement. The U.S. today generates three times as much wind energy and 20 times as much solar power as it did in 2008.
"This also means that thousands of private sector renewable energy projects are now employing tens of thousands of Americans; last year, for example, the solar industry added jobs 10 times faster than the rest of the economy," the White House said.