Cleantech investments rising


As world markets stagger under a financial crisis, climbing energy costs and commodity shortages, one climate-friendly market appears on the rise: cleantech.

A report released Thursday by accounting firm Ernst & Young says the global clean technology market is poised to grab one-tenth of the world’s venture capital this year — up from just 1.6 percent in 2003 — and that it is taking hold in major markets around the world.

"Cleantech has passed an important investment tipping point," Gil Forer, who directs low-carbon technology investment for Ernst & Young, said in a press release.

"Demand for cleantech solutions is increasing due to higher energy and resource costs, regulatory requirements and the desire for corporations to pursue climate change related market opportunities," he said.

Oil prices that have broken the $140-per-barrel barrier have helped drive investment in new energy technologies, the report says. But just as important are the regulations that major countries are increasingly using to promote alternative energy.

In Europe, for example, countries have used a range of policies, including feed-in tariffs, tax incentives and tradable permits. In the United States, the report says, state renewable portfolio standards and regional emissions trading blocs have pushed investment in greener technologies.

Wind and solar are king among the world’s clean technologies: Of the top 10 cleantech initial public offerings worldwide in the last year, seven companies were focused on wind and solar. The report projects that the world market for renewable energy, largely paced by these two technologies, will more than triple from $77 billion in 2007 to $254 billion in 2017.

In three of the world’s major markets — the United States, Europe and China — solar leads the way in attracting investment. But after solar, each country has a very different profile for cleantech dollars. While the United States and Europe have invested in the full range of technologies, from biofuels to consumer products, China’s cleantech companies have focused on fewer technologies, emphasizing materials and agriculture.

Stock markets are tumbling worldwide, but cleantech may offer a promising alternative. The report says cleantech stocks outperform major stock indexes in both the United States and Europe. The WilderHill New Energy Global Innovation Index, which includes domestic and foreign cleantech firms, has outperformed the S&P 500 and Russell 3000 indexes since 2006.

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