A couple weeks ago, I discussed some trends in VC investments regarding Cleantech. For the G20 summit early April, the Postdam Institute for Climate Impact Research and the Grantham Institute on Climate Change and the Environment published a very interesting document about the potential for a green recovery from the current recession. (Towards a global Green Recovery)
The report shows that “Public spending aimed at stimulating private investments that help reducing greenhouse gas emissions can perform very well against criteria for an effective stimulus while providing the additional benefits of lower energy costs and increased energy security. By focusing on correcting well known market failures in energy use and R&D, it can avoid crowding out private sector activity. In fact, green recovery programs have the potential to stimulate private investment in low carbon technologies, thereby developing new opportunities for employment, innovation, and wealth creation.” The report also highlighted key measures that the G20 could take, including physical infrastructure upgrades, energy efficiency increases, and potential flagship project investments.
So what happened? The G20 communique included $1.1B in plan pledges – $750B for the IMF, $250B for trade and financing – as well as motions for stricter regulations on hedge funds and banks. While many groups are arguing that a larger GDP share should go towards green initiatives, others are satisfied that those notions have become mainstream. Personally, I think that the economic situation is such that priorities will focus on the fastest way to accelerate the recovery, possibly at the expense, at least initially, of green.