A climate summit at Duke University earlier this year brought together clean energy leaders from the upper ranks of business, finance, and public policy to discuss ways the private sector can decarbonize the world’s economy.
The event, “From Billions to Trillions: The Inflation Reduction Act (IRA) as a Catalyst for Private Investment,” was held in February at the Geneen Auditorium in the Fuqua School of Business. It was co-hosted by Fuqua, the Nicholas Institute for Energy, Environment & Sustainability, Fuqua’s Center for Energy, Development and the Global Environment, and Duke Innovation & Entrepreneur.
Photo Courtesy Duke’s Fuqua School of Business
According to The Chronicle, Duke’s student news site, 14 industry leaders attended the event and featured opening remarks by Duke University President Vincent Price and Dean of Fuqua Bill Boulding. According to the Nicholas Institute, it was aligned with the Duke Climate Commitment, a joint effort between the university’s education, research, operations, and public service missions to address the climate crisis.
“The importance of this topic reaches across so many divides,” Price said in his remarks to the gathering. “We know that switching on finance via policy is essential for accelerating this energy transition. It will require unprecedented levels of cooperation and thoughtful engagement.”
One of the main themes addressed by industry leaders was how to develop climate solutions by strategically deploying private capital.
As The Chronicle reported, the program consisted of six panels and two conversations, each centered around climate finance, the 2022 IRA, and the role of private capital in the renewable energy transition.
John Podesta, senior advisor to the president for clean energy innovation and implementation, talked with Fuqua professors about how the IRA can encourage private investment in clean energy.
Photo Courtesy Duke
“What the IRA did was it tackled every sector, every emitting sector — not just power — but transportation, industry, agriculture, and forestry, [and] buildings, so as to provide the support to go from an energy system built on dirty fossil fuels to one built on clean energy,” Podesta said. “And that’s a remarkable sweep of interventions across a broad range of sectors of the economy.”
Private capital is considered an essential element of U.S. efforts to transition to clean energy and meet the administration’s climate goals.
These include achieving a carbon pollution-free power sector by 2035 and a net-zero emissions economy by no later than 2050.
There has been a good deal of progress regarding private investment in clean energy. An August 2023 research report from the American Clean Power Association found that “unprecedented federal support” helped spur private investment announcements totaling $271 billion in domestic clean energy projects and manufacturing facilities during the preceding 12 months. That figure exceeded the combined clean energy investments made during the prior eight years.
There’s still a long way to go in terms of the amount of private equity needed to bolster the global clean energy economy.
Photo Courtesy Clean Power/ACP’s Clean Energy Investing in America report
A blog on the website of Washington, D.C.-based law firm Akin Gump Strauss Hauer & Feld LLP cited McKinsey & Company research estimating that the transformation of the global economy from fossil fuels to clean energy will require about $9.2 trillion of annual investment in physical assets through 2050. That represents a $3.5 trillion yearly increase compared with the current investing rate.
This topic was addressed at the Duke Climate Summit during a panel discussion on “The Role of Early-Stage Capital in the Transition to Net Zero.” According to The Chronicle, the discussion explored a “need for early-stage venture and growth capital to engage with various other types of capital sources, building a suite of financial solutions to intentionally scale climate technologies.”
“We really believe in a sort of re-globalization that you’re seeing,” panelist Genevieve Kinney, principal at General Catalyst, said during the discussion. “Part of that is countries and regions wanting to build defensibility and resiliency in their critical systems — whether it be defense, industrial automation, supply chains, or energy production — and I think you’re going to see a lot more cooperation for countries and regions in trying to achieve those goals.”