Is “CleanTech” the New “Green”?
By Jacqueline Libster (New York City)
Is “CleanTech” the new, hot buzzword for 2010? It’s on the lips of everyone in finance, banking, law, public policy, economics, regulatory and urban planning. CleanTech is the umbrella term for all clean forms of generating energy. It encompasses all the ways to improve efficiency and performance while reducing waste and saving money.
On December 1, the Women’s Network for a Sustainable Future (WNSF) hosted a panel discussion on CleanTech for women in business, addressing CleanTech from a local, national and global perspective, and where it might go in the future.
From “Oil Addiction” to Massive CleanTech Investment
Ann Goodman, Ph.D., the Executive Director of WNSF, said in her opening remarks that we all need to look for “greener, cleaner energy offerings” to reduce waste and improve efficiency. She added that, although innovations in CleanTech can save money in the long run, there needs to be a big financial investment upfront to bring this technology to the market.
Diana Propper, a Partner at Expansion Capital Partners, LLC, a clean technology venture capital firm, was the moderator of the event. She gave an overview of how CleanTech evolved. In her opinion, it all started in earnest around 2006 when crude oil was trading at over one hundred dollars per barrel and President Bush declared that the US was “addicted” to oil. This prompted widespread oil conservation, the likes of which we had not seen since the 1970s. At this point, Propper noticed the clean energy sector “began to engage.’ Investments increased, venture capitalists and investment funds began to raise money. Between 2004 and 2006 for example, Propper said that investments in CleanTech ballooned from $33 billion to $92 billion.
The Local Focus on CleanTech
Maria Gotsch of the NYC Investment Fund spoke about local CleanTech initiatives. NYCIF’s civic mission is to create jobs in the five boroughs of New York City by partnering with entrepreneurs, investing in clean technology companies that offer improvements in resource efficiency while creating more economic value with less energy. NYCIF focuses on thinking and investing strategically to help build new technology sectors.
Gotsch described some of the areas where New York City needs to improve in the CleanTech field. She said that it is very expensive to do business in New York City, a big part of the talent pool goes into high paying fields like banking and law, and that there is not a top-ten engineering school in the city.
On the positive side, she noted that both New York City and New York State have progressive public policy and that there is a huge market for products here.
Gotsch explained that one of the best things New York City can do is to better control and manage energy use in large buildings. Improving energy efficiency and auditing technology can vastly improve New York City’s carbon footprint and these energy reduction and auditing solutions can then be used in large buildings in other big cities. One example of urban-focused CleanTech is the idea of putting wind turbines on top of buildings in New York. Gotsch said that while there are still hurdles to cross with this plan, similar innovations in urban sustainability could further expand and advance the reputation of New York City as a big city leader, while moving the economy forward, creating CleanTech sector jobs for New Yorkers.
The Bottom Line: Maximizing the Public Good
Lauren Bigelow, Commercial Director, North America for New Energy Finance spoke about CleanTech from a national perspective. She said her clients are starting to see real opportunities to focus on conserving energy, energy security, and are lobbying Congress for a new energy bill. She estimated that, from now until 2020, there is roughly $450 billion in project finance capital available for CleanTech investments. The Obama administration’s influx of stimulus money and policy initiatives for wind and solar energy in particular will help benefit CleanTech efforts over the next few years.
When asked about how the bottom line affects the big picture of CleanTech, Bigelow explained that it is possible to incentivize the efforts of the private sector with government involvement. While the public sector is willing to absorb more risk, the private sector can be more innovative, thereby maximizing the public good.
Gisele Everett, Director at Deutsche Bank Climate Change Advisors, provided the panel with a global perspective on CleanTech by describing the differences that exist between industrialized and developing nations. Industrialized nations have better ability to protect intellectual property rights, access to much more investment capital and much less regulatory volatility. Developing markets, on the other hand, are seeing faster rates of energy needs and energy growth, a greater need to focus on cost, lower labor costs, and a willingness to produce dirtier energy to keep up with demand.
These differences affect how the world will develop and use CleanTech solutions to solving very global problems. Everett said it is important to focus on value-added CleanTech, an example being incentivized recycling. Recycling can be very profitable especially when the end product is worth as much, or more, than the original. Recycling plastic garbage into plastic polymers used in computer manufacturing is an example of CleanTech in action – it reduces waste, increases efficiency and can be profitable.
While the panelists each had different perspectives on what the future of CleanTech holds, it seemed they agreed about the way to get there – we need political will, creativity, innovation and process implementation to transform the future of clean technology.