Private sector investment in green technology falls but governments pick up the slack
The bad economy and liquidity issues have been affecting the green sector for some time now. Investment firms are finding it more difficult to acquire the necessary credit or cash needed to finance new or even old ventures.
According to Cleantech Group, who pioneered the clean technology sector, private investment in green technology is down in the first quarter of 2009 by 41 percent from last quarter and 48 percent from this time last year. Right now investment is down to its lowest level in two years.
Luckily governments globally have increased spending for green technology programs “through stimulus packages, loan guarantees and tax incentives.” While private investing has fallen from $20 million to $12.3 million, $400 billion of the $2.6 trillion allocated to stimulus packages by G20 countries will be going to green technologies like cleaner cars, electric grids and renewable energy.
Utilities and corporations are also investing in green tech like solar and wind technology to expand the percentage of energy that is generated from renewable energy.
Investments by sector are:
- Solar – $346 million
- Biofuels – $96 million
- Advanced Batteries – $94 million
- Electric Vehicles – $78 million
Clean technology funding is shifting from the private sector to the public sector. Without investments by governments and utilities, green technology companies would be finding financing difficult.
Looking at green technology investment world wide, North America accounted for 68 percent, Europe and Israel for 28 percent, China 2 percent and India 1 percent. Indian companies like Tata, the maker of the world’s cheapest car, are looking to invest in more in green technology than they currently are.
In a recent story in The New York Times, China has a plan to take the lead in producing hybrid and electric vehicles. The country expects to overtake Japan, the leading manufacturer of hybrids, within the next three years. Forget about Detroit’s automakers. China doesn’t even consider them to be competition.
With all of this investment by global governments, green technology should become cheaper, cleaner, and easier to purchase than ever before. Current technologies should continue to improve. With the increasing pressure that China and India intend to place on North America and Europe, green technology place both countries on par or above the leading industrialized nations.
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