research & data

Cleantech 2009: The emergence of a low carbon economy

The year 2008 was a banner year for Cleantech which for the first time led all other sectors in venture investment, with $5.9 billion committed in North America. The sector’s first boom, beginning in 2004, was supported by national and state policies that focused on improving efficiency, increasing the availability of clean energy and reducing global warming pollution. The boom ended with the sector’s sharp declines in Q4 2008 and Q1 2009, paralleling declines in the macro economy. 

Despite this downturn, cleantech may recover quickly, as attention shifts to economic stimulus monies. Over $200B in government funding worldwide is likely to be spent on cleantech in 2009, an amount that is larger than the total private capital expenditures of $150B in 2008.

The long term drivers for cleantech are still intact. These include (1) the growing demand for energy services as per capita incomes increase, (2) the stress on water supplies, (3) the urgent need to reduce greenhouse gas emissions to mitigate the worst effects of climate change, and (4) the long term supply issues of traditional fossil fuels. 

Upcoming policy decisions on climate, energy and transportation will play a significant role in determining not only short term recovery but the long term growth of a new low carbon economy, ushered in by expansion and job generation in the cleantech sector.

 

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