Why Investors Are Bearish on Clean Energy

My posts at 2GreenEnergy somehow wind up on CleanTechies Blog where an entirely new set of readers post comments. Here’s a cogent response from a certain David Dunn to my piece “Why Are Investors Bearish on Clean Energy?”

Investment in alternative energy will remain limited until everyone knows the real costs involved.

All the economics of processes and manufacturing at present are distorted by huge grants, subsidies and the huge amount of pollution and environmental controls, and not to mention all the moral and ethical regulations governing labour employment.

The field that everyone is playing on in the alternative energy market is so distorted by all these issues and until a simpler, more equal and fair way of applying incentives, no real way forward will occur, as it will be continually tripped up by the real distortion caused by the highly complex system we have in place at present.

This is exactly right. We say we want a free market economy with its invisible hand to guide the development of cleantech, yet we are a million miles from such an environment, with our:

1) large and predictable subsidies to the oil companies, vs. our small and erratic subsidies for renewable energy, and

2) refusal to include the externalities in the pricing of energy sources

Until we can address these issues, there will be no mystery associated with investors’ feeble appetite for this sector.