Global Cleantech Venture Investment Dips 33% to $6.45 Billion
Yesterday I spent an hour taking in a terrific webinar from the Cleantech Group, conducted by what I’m sure must have been one of its most senior consultants, Sheeraz Haji, who ably walked us through some of the 2012 numbers associated with global cleantech venture investment. As it happens, these figures were down about 33% from 2011, and came in at $6.46 billion. Deal count, i.e., the total number of such transactions, was also down, off 15% from the year before.
I’ve noticed that these numbers really do pop around year to year, and I normally don’t make too big a deal out of each year’s changes. Obviously, they collapsed with everything else in 2008, but then steadily regained ground, only to see last year’s drop-off.
Here’s my personal interpretation: almost 80% of the deals discussed here were in the U.S., the home of the 2012 election year from hell. (The Cleantech Group has numbers from Europe, as well as from China and India, but they admit that they have very little visibility in the Asian geographies.)
The way I recall 2012 here in the U.S., a guy who received nearly half the popular vote in the presidential election ran on the platform that global warming is a hoax, that Solyndra is illustrative of what happens when government is involved in energy policy, and that cleantech is a fad. So, yes, almost half of Americans believe this – and we’re unique in this respect. Try running on that platform anywhere else in the world and see what happens. But, returning to the point, is it any wonder that the constant bombardment of these messages caused a downturn in confidence of cleantech?
Even with all this, cleantech’s overall performance in terms of publicly traded issues for the year wasn’t abysmal, though it was disappointing. The S&P 500 gained a little over 13% in 2012, and the cleantech sector was up approximately half that, about 7%.
But what comes next? Haji’s job is presenting history, not predicting the future, and there wasn’t too much talk about the direction in which 2013 will take us. Having said that, he sees extended losses in the mature areas like wind and solar, balanced out by areas in which he feels particularly bullish:
• Water / waste-water treatment
• Telematics / IT and communications technology that help improve the efficiency of transportation
• Efficiency in fossil fuel exploration and extraction
• Waste-to-energy
• Agriculture and food – using IT to improve these processes
These are savvy observations that show real sophistication in looking at this subject. When Haji dismissed his audience after an hour, I’m confident in saying that every single member felt like me: we were, to a person, truly satisfied with the use of the hour we had spent.
But to me, there is a far more potent ingredient in all this: Do we really care about sustainability? If the answer is fundamentally no, as it’s been in the U.S., Haji is right; we’ll continue to show no real trend in cleantech; each year, certain arenas may be up, while others will be down.
But what happens when we decide, for whatever reason – perhaps even stronger evidence about global climate change or another form of ecological destruction, maybe a new set of wars over oil, maybe more healthcare issues related to childhood asthma or lung cancer – that sustainability and environmentalism actually mean something? At that point, the investment in cleantech will look like the ultimate hockey stick.
In the wake of “Superstorm” Sandy, polls are showing just exactly what a decent dose of reality can do against untold millions of dollars’ worth of fossilized hoaxer “messaging”. You’ll excuse the pun but, a sea-change occurred practically overnight with the national top-story airing of that historically unprecedented storm surge flooding New York and New Jersey. It was a highly graphic illustration of the risks that climate disruption presents to numerous heavily populated coastal communities here in our nation and around the world. It served as a badly needed cold slap in the face for a sleeping American People. That thunderous message is a far greater challenge to ignore than the parched crackling of that 60% of the country still baking in persistent drought.
So, what will be the moving forces behind a paradigm shift in statecraft and investing that favors renewables in a stable and long-term strategy here in America?
National energy security is an excellent motivation, global financial security is another. Reuters reveals that, following on a new World Bank climate impact report, “A coalition of the world’s largest investors called on governments to ramp up action on climate change and boost clean-energy investment, or risk trillions of dollars in investments and disruption to economies.” These investors, who together manage $22.5 trillion in assets, said, “The investments and retirement savings of millions of people are being jeopardized because governments were delaying tougher emissions cuts or more generous support for greener energy.”
Truthdig.org discussed the World Bank report, Turn Down the Heat: Why a 4°C Warmer World Must Be Avoided. “A bleak new report by the World Bank says no nation will be immune to the impacts of climate change. However, the distribution of impacts is likely to be inherently unequal, and tilted against many of the world’s poorest regions.”
“The World Bank warns that temperatures on Earth could rise more than 7 degrees Fahrenheit (4 degrees Celsius) by 2100, bringing along with them some catastrophic consequences. It warns of ecological harms and increased human suffering, noting that the effects of climate change will counteract benefits seen from economic growth and development initiatives.”
So, even the bankers now say we must act to minimize climate disruption. It’s a deadly reality denied only by head burying sand breathers, and by those few denial funders with a heavily vested fiscal interest in the fossil status quo. The UN World Meteorological Organization (WMO) reports that. “Between 1990 and 2011 there was a 30% increase in radiative forcing – the warming effect on our climate – because of carbon dioxide (CO2) and other heat-trapping long-lived gases.” The WMO’s research shows that human activities – including fossil fuel use, cattle breeding, rice agriculture, landfills and biomass burning – all emit the five major gases that account for 96% of the warming climate. The worst of the five – carbon dioxide, methane and nitrous oxide – all broke new records in 2011.
What will it take for people to stand up and demand that paradigm shift? That’s an open question. I hope it won’t take too many such weather events to get people moving powerfully in the correct direction, for it will doubtless require the unwaveringly forceful demand of We the People – nothing less will move the fossil captains of fossil industry or their bribed behemoths in our statehouses and the District of Columbia.