Written By: Emma Websdale
According to new research, clean technology investment took nearly a quarter of 2012’s available venture capital and is set to increase rapidly as cities and companies look for more efficient and sustainable ways of providing services and products.
The study entitled, ‘Cleantech Redefined‘, published by cleantech research firm Kachan & Co. and non-profit foundation As You Sow and the Responsible Endowments Coalition, reveals that ever-increasing demand on governments and businesses to become more efficient, particularly during periods of declining revenue, is establishing clean technology (cleantech) in both developing and emerging markets.
The report, intended to be a framework to help investors understand the abundant opportunities in cleantech, says, “The global economy is undergoing a fundamental change. Companies are under increasing pressure to produce and consume more efficiently. This pressure is creating innovation and, above all, opportunity in cleantech.”
The report suggests that the pressure from increasing populations and threats of climate change will further drive the need for more efficient services and goods to mitigate the associated risks.
“The fundamental drivers behind cleantech will only intensify. Resource scarcity, energy and resource independence, climate change, as well as changing policy and regulatory requirements are not passing fads, but are now part of our global framework. The markets for clean products and services will therefore only grow”, the report says.
Highlighting that some of the largest companies in the world have discovered the opportunities and cost savings associated with facilitating cleantech, the report suggests that cleantech is set for an even larger rapid expansion as large companies add clean products and services to their portfolios in an attempt to remain competitive.
“The pragmatic, undeniable opportunity for savings and efficiencies that are driving cleantech’s adoption today will continue to propel mass market acceptance and mainstream adoption”, says the report.
According to the report, cleantech attracted $6.4 billion in 2012 – nearly a quarter of the venture capital (VC) available, as businesses, states, venture capital, universities, cities and individuals invested in cleantech products and services.
Clean energy accounts for a large percentage of this investment, with solar and biofuels sitting at the top. The report estimates that biofuel revenues are expected to grow to $177.7 billion by 2022 (up from $95.2 billion last year), while wind revenues could reach $124.7 billion (an increase from $73.8 in 2012).
An additional benefit associated with increasing cleantech investment is job growth. The report cites how the U.S solar industry now employs nearly twice as many people as the country’s mature coal industry. Massachusetts employment alone has been boosted by 24% since 2011.
Also spreading optimism for the growth of cleantech is Bloomberg New Energy Finance, who last week launched a new initiative designed to accelerate the flow of investment into clean energy, climate adaptation and green growth.