University of Penn: Global Warming
Green from Green: Rising Energy Costs May be Good News for 'Clean Tech' Firms and Their Investors - 08/06/08
The amount of venture capital invested in "clean tech" the raft of technologies that would create a greener economy nearly doubled from 2005 to 2006, reaching about $3 billion, according to a study conducted at the University of California at Berkeley. Figures like these have some analysts warning that clean tech is in the throes of a bubble, which could end just like the Internet and real estate booms did badly.
Michael DeRosa, managing director of Element Partners, based in Radnor, Pa., doesn't buy that. A venture capitalist specializing in clean-tech investing, he sees significant differences.
Unlike many of the dot-coms, clean-tech companies don't always depend on unproven technologies or untested ways of doing business. Instead, they are often offering the latest iterations of technologies, such as solar and wind power, that have existed for decades, he pointed out at a recent Wharton conference called "Winners and Losers in Green Technologies," sponsored by the William & Phyllis Mack Center for Technological Innovation.
"We see gas prices only getting worse," with oil reserves diminishing just as demand burgeons in China, India and other developing nations, he said. "And fuel costs feed into just about everything, which means that raw-materials prices and food prices should continue to stay high, too."
All of those lofty levies should keep the attention of investors, consumers and policymakers focused on ways to make the transition to a less fossil-fuel-dependent economy. "Clean tech isn't just environmental," DeRosa noted. "Investing in efficiencies can relieve pricing and competitive pressures for businesses." In theory, a company that's paying less for fuel or electricity could see higher profit margins.
