Estimated $148B Invested by Venture/PE in Green for 2007

Pensions & Investments has a story out about the amount of private capital flowing into green investments:

According to New Energy Finance, a London-based global clean-energy research firm, $148.4 billion in new private equity, venture, government and corporate capital was invested in clean technology in 2007, up 60% from $92.6 billion in 2006. During the same period, total assets of global private equity and venture capital specialist clean-tech firms grew to $23 billion in October 2007 from $15.9 billion in October 2006, according to data from New Energy Finance.

There are some estimates here about amounts of capital committed, invested, etc., for those that like that kind of thing.

The general tone of the piece is about how investors are waiting on the sideline to put more money into this group given the imbalance between interested money and investable ideas. This, it should be pointed out, is not a problem restricted to green investing. Across most of the alt investment sectors, (hedge funds, venture, private equity), there is generally too much money chasing too few ideas regardless of the industry.

Of course, this begs the question, with so many poorly or underfunded green ideas out there, why aren’t more them getting capital if the market is awash in dollars looking for these kind of investments?

I think part of this can be attributed to the unique role that subsidies play in the industry - and the uncertainty that those subsidies (both for green technologies, and more importantly for entrenched competing fossil technologies) inject into private capital investment ideas that play outo over a number of years - particularly when in many cases, those subsidies - (e.g., solar tax credits) - are critical to making the green business viable.

Of course, if the true costs of fossil fuels were borne by their manufacturers and users, many of those green ideas would look a great deal more attractive - even without tax breaks to encourage their use…