Climate Red - News and Views on Climate Change Issues.

FOR more than 20 years many have emphasised the money to be made in cleaning up the environment. The theory's been right, though, with some notable exceptions at relatively small scale, the timing's been wrong. The reality is that investing in good old-fashioned polluters such as ExxonMobil has generally made better, larger and more reliable returns than acting with your heart. So with the arrival of climate change into the mainstream economy, and the increasing shakiness of traditionally safe investments such as banks, is now finally the time? Is there serious money in doing good at last and if so, where are the best bets?


The answer to the first question is easy. Yes, this is the time. And while the risk is still considerable, tomorrow's equivalents of Microsoft and Google are likely to be in this space and they are probably already in business and looking for capital. The reason this is such a reliable forecast is that, unlike most other investment propositions, this one is not driven at its core by the vagaries of technology, regulation or consumer preference. In this case the science gives us the clear overarching trend against which to invest. Yes, there are still many uncertainties in the science but not in the basic nature of the risk, the causes of the problem or the required response. So whatever the ups and downs of international negotiations, whether the price of carbon is $10 or $40 a tonne and whether our ETS starts in 2010 or 2012, the traffic is going one way: we're going to dramatically cut greenhouse gas emissions for many decades and there's big bucks involved.


The numbers in achieving this are dramatic and are getting the market excited, with billions now flowing from some of the world's most accomplished investors such as Kleiner Perkins and Khosla Ventures. According to the Cleantech Group, while overall venture capital investment was drying up over the past quarter, clean technology investments increased by 48percent, building on their annual increase over the past five years of 47percent compound annual growth rate. While this is early days, the growth forecast is breathtaking.