Technology Investment and the US Inflation Reduction Act - Ep109: Ion Yadigaroglu and Dipender Saluja
Dec 7, 2022
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Dipender Saluja and Ion Yadigaroglu, partners at Capricorn Investment Group, discuss the importance of capital in climate change investments, US subsidies and their implications for developing countries, the response to the US Inflation Reduction Act from portfolio companies, the role of young lobbyists in promoting clean technologies, and Europe's advantages in clean energy.
The Inflation Reduction Act (IRA) in the US, by tying funding and subsidies to job creation and manufacturing, can drive significant investment in the clean tech sector and create millions of jobs.
Europe needs to adopt subsidy regimes similar to the IRA in the US to stimulate innovation, create jobs, and build competitive industries in the low-carbon economy.
Venture capital plays a critical role in bridging the gap between innovation and manufacturing, enabling faster deployment of clean technologies and addressing key climate challenges.
Deep dives
Accelerating Action on Climate Change through Venture Capital
Ayanja Digaroglu and Dipender Saluja from Capricorn Investment Group join the podcast to discuss the role of venture capital in addressing climate change. They explain how their focus on technology-centric investments has enabled the merging of traditional industries with semiconductors and software, leading to innovations in energy, transportation, and more. The conversation highlights the need for rapid deployment of clean and green infrastructure and the importance of financing and subsidies in achieving this. The guests express optimism about the Inflation Reduction Act (IRA) in the US, which ties funding to job creation and manufacturing, potentially driving significant investment in the clean tech sector. While there are concerns about potential trade conflicts, the IRA offers a way to subsidize critical climate technologies and accelerate global deployment. The guests also emphasize the need for effective leadership and international cooperation to address the urgent challenge of climate change.
The Promise of the Inflation Reduction Act (IRA)
The podcast delves into the Inflation Reduction Act (IRA) as a game-changing legislative initiative in the US. The IRA aims to address the pressing need for rapid deployment of green infrastructure and accelerate action on climate change. The guests discuss how the IRA, by tying funding and subsidies to job creation and manufacturing, can incentivize companies to accelerate their manufacturing plans and scale up clean technologies. While acknowledging concerns about potential trade disputes and the risk of subsidy distortion, the conversation highlights the potential positive impact of the IRA in driving significant investment in the clean tech sector and creating millions of jobs. The guests also emphasize the importance of international cooperation and effective leadership in achieving global climate goals.
Challenges and Opportunities in European Climate Leadership
The podcast highlights the challenges and opportunities for Europe in the context of global climate leadership. While acknowledging Europe's strong educational and industrial infrastructure, the guests express concerns about the lack of effective leadership and political will in driving climate action. The conversation emphasizes the need for Europe to move beyond cajoling and regulation and adopt subsidy regimes similar to the IRA in the US. By providing massive subsidies for critical climate technologies, Europe can stimulate innovation, create jobs, and build competitive industries. The guests stress that Europe needs to act decisively and focus on sound objective programs to accelerate its transition to a low-carbon economy.
The Role of Venture Capital in Accelerating Clean Technology Innovation
The podcast explores the crucial role of venture capital in driving innovation in clean technology. The guests discuss how venture capital investments have been instrumental in bridging the gap between innovation and manufacturing, enabling faster deployment of clean technologies. They highlight the challenge of financing in this space and the need for venture capital to enable companies to scale from innovation to manufacturing. The conversation emphasizes that venture capital plays a critical role in accelerating the development and scaling up of clean technologies, thereby addressing key climate challenges.
The Need for Global Arms Race on Subsidies for Climate Technologies
The podcast emphasizes the need for a global arms race on subsidies for climate technologies to accelerate the transition to clean energy globally. The guests discuss how subsidies, such as those proposed in the IRA, can help drive down the costs of clean technologies and make them more competitive with incumbent industries. They argue that subsidies should be tied to job creation and manufacturing, ensuring that the benefits of clean technology deployment are widespread. The conversation highlights the potential of subsidies to create millions of jobs and stimulate investment in the clean tech sector, both domestically and internationally. The guests stress the importance of leadership and cooperation in scaling up clean technology deployment and addressing climate change at a global scale.
Dipender Saluja and Ion Yadigaroglu are Partners at Capricorn Investment Group. Capricorn is a sustainable investment group, one of the largest mission-aligned investment firms in the world, and our sponsor on Cleaning Up.
Dipender Saluja is a Partner of Capricorn Investment Group, and a Managing Director of Capricorn’s Technology Impact Fund. Prior to Capricorn, Saluja was Chief of Staff at Cadence, a global market leader in electronic design. Prior to Cadence, he worked at Data General (EMC), Honeywell, ROLM (IBM), and the GF Energy Research Center. Saluja is an electrical engineer by training, and attended UND, University of Minnesota and Stanford University.
Ion Yadigaroglu has been Managing Partner at Capricorn Investment Group since 2004. Prior to Capricorn, Ion was Director of Business Development with Koch Industries, and a Founder and Chief Executive Officer at Bivio, a software startup in Colorado. Yadigaroglu was a research fellow at Columbia University and holds a master’s in physics from ETH Zürich in Switzerland and a Ph.D. in Astrophysics from Stanford University. Yadigaroglu was a founding member in 2007 of GIIN, the Global Impact Investor Network.
Capricorn was born from the desire to demonstrate the huge investment potential that resides in breakthrough commercial solutions to the world’s most pressing problems, and as such is one of the original impact investors.
Ion appeared on Episode 89 of Cleaning Up: https://www.cleaningup.live/ep89-ion-yadigaroglu-pioneering-impact-investor/
Take a closer look at Capricorn's portfolio: https://capricornllc.com/technology-impact-fund/
Watch Episode 84 with Mark Carney here: https://www.youtube.com/watch?v=HtA5ufMzKAU
Watch Episode 48 with Lord Stern here: https://www.youtube.com/watch?v=6O5Ge_wRmPA
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