Economic turmoil and sustainable investments
EcoGeek – a reference website on all green technologies, gizmos and investments – proposed an article last week that allow us to better grasp the situation currently at hand.
So I’ve been spending the last few days combing through all of my favorite investment resources, trying to figure out exactly what this “worst crash since the great depression” really means. How will it affect this burgeoning revolution…and what does that mean for the planet.
It seems that the news is mixed. Many have speculated that cleantech investments are one of the best places to be right now. And I have indeed seen that in my own portfolio. While there have been losses across the board, my cleantech and energy investments have lost the least. It seems that investors see clean energy as one place that will continue to grow despite an economic downturn.
This has, of course, been helped by the Senates approval (finally) of an energy bill that includes tax incentives for clean technologies (mostly solar and carbon sequestration.)
But there’s bad news too. Two articles I read today have got me believing that there simply will not be enough money to go around for the sector to grow as fast as it should. CNET’s Greentech blog is saying that talk of a clean technology bubble is, in fact, a red herring distracting us from the true problem of not enough capital to get companies to full scale.
The problem, they say, isn’t getting the startups funded initially. In fact, VC investment has never been stronger. The problem is bridging the gap from startup to full commercialization. That requires strong investment in the form of IPOs or acquisitions. And in this climate, investors aren’t looking to invest, and even the biggest corporations are having trouble getting loans for big purchases.
(…) While it’s undeniable that cleantech offers the most obvious path toward continued economic growth, there’s just no way to get people spending in a significant economic downturn.
The ultra-rich will keep their venture investments going, but they will likely be disappointed when it comes to IPOs or acquisitions in the next couple of years, and the value of little alternative energy companies who’s stock prices are based on projected growth, not current revenue, will probably flounder for a few years.
I’m calling this some pretty bad news, especially since we can’t afford a delay on a lot of this stuff…as investors yes…but as inhabitants of the planet earth as well. If the government isn’t able to take a leadership stance on carbon markets and subsidies because of the current turmoil…that would be a true disaster.
If they do, then I can see clean technology leading us out of this mess a lot sooner than most people are predicting. If they don’t, then we’re going to have to wait far too long for the rise of clean technology…and it’s possible that stronger foreign markets will beat us to that particular punch, possibly making American markets (and a lot of our companies) surprisingly obsolete.