Will Green Technologies Exceed the Internet as the "Mother of All Markets"?

"We're talking about nothing less than the reindustrialization of the whole planet."

Venture Capitalist, John Doerr,

The legendary venture capitalist, John Doerr is fond of white-boarding the difference in the Internet boom and the coming boom in green technology as follows:

Internet made of: Bits, Pixels vs. Green Technology made of: Atoms, molecules

What is at stake: Finding Friends on FaceBook vs. Life on the Planet

Capital needed: Low, Google needed $25 million vs. High, Hundreds of millions

Time to success: Quick, 3 to 5 years vs. Longer, 5 to 10 years

Market Potential: Large Billions vs. Enormous Trillions

Alternative energy development of more energy-efficient products will create the next great boom cycle. Green tech development will include viable alternatives to oil, including wind, solar, and geothermal power, along with the use of nuclear energy to produce sustainable oil substitutes, such as liquefied hydrogen from water.

More valuable than campaign rhetoric, however, is legislation. The Energy Policy Act of 2005, a massive bill known to morning commuters for extending daylight savings time, contained provisions guaranteeing loans for alternative-energy businesses, including nuclear-power technology. The bill authorizes $200 million annually for clean-coal initiatives, repeals the current 160-acre cap on coal leases, offers subsidies for wind energy and other alternative-energy producers, and promises $50 million annually, over the life of the bill, for a biomass grant program.

Loan guarantees for “innovative technologies” such as advanced nuclear-reactor designs are also at hand; a kindler, gentler nuclear industry appears to be imminent. The Price-Anderson Nuclear Industries Indemnity Act has been extended through 2025; the secretary of energy was ordered to implement the 2001 nuclear power “roadmap,” and $1.25 billion was set aside by the Department of Energy to develop a nuclear reactor that will generate both electricity and hydrogen.

The future of transportation may be neither solar- nor ethanol-powered but instead rely on numerous small nuclear power plants generating electricity and, for local transportation, hydrogen. At the state and local levels, related bills have been passed or are under consideration.

Green tech isn't a bubble destined to burst. Energy is as necessary as water and food. In fact, as  Doerr points out,  it's the biggest business in the world, with $5 trillion in annual revenues. Demand for alternative energy is exploding, and it will not only create fortunes but also save the planet. "Anyone who doesn't get the differences between the last new thing and the next one will watch this 'mother of all markets,' as Doerr calls it, "pass them by."

The venture-capital industry is expected to invest about $27 billion in the clean-tech industry, according to the consensus estimate of 170 venture capitalists polled by the National Venture Capital Association. The news is good for budding green-leaning technology companies, as some in the investor expect even bigger numbers. The study found 25 percent of survey respondents forecast investments of $30 billion to $39 billion. That would be the most VC money poured into the tech sector since the 2000 bubble year.

However, as has been demonstrated in the IT and life science arenas, investing in new technologies can be fraught with risk and is not for the inexperienced or the faint of heart.

Posted by Casey Kazan.

Source links:

http://www.harpers.org/archive/2008/02/0081908
http://www.tmcnet.com/green/articles/16763-green-technology-investments-boom-2008.htm
http://www.fastcompany.com/magazine/124/the-mother-lode.html

Comments

[Ryan]

My dad owns a green company which just recently saved AT&T 130,000 tons of Co2 in one year. It also had 82% Water conservation. I really think that this new green revolution is going to help my dads company take off. He works on cooling towers for non chemical water treatment. He had the potential to save billions of tons of co2. You can check out his website at Eh2o.com