The Green Bubble Will Not Be Like Past Bubbles

Last week we argued that a green bubble will not take shape. We were talking from an investment perspective. If we were talking about a marketing/hype perspective we’d say we’re in the middle of a gigantic green bubble. That hype, though, might get one to thinking that investment will follow and a bubble will be inflated.

The reason we don’t think there will be a great green bubble: There is not enough capital to inflate it. To belabor our point, we pulled these charts from the National Venture Capital Association’s website to compare clean tech investment with the Internet’s bubble in the late nineties. We also include a housing prices chart. As is clearly demonstrated, investors are not anywhere near as excited about green as they were about the web or homes. And with the world’s financial system grinding to a halt we see no reason for this to change. There is less money to dump into expensive and risky green ventures that take time to develop.

Investment in clean tech is trending upward, but it’s not yet statospheric. Once it gets into the upper reaches, we’ll see a bubble. Till then, it’s proceeding in a rather orderly manner.

And let’s throw in this chart of housing prices to remind ourselves what a monstrous bubble really looks like:

And if those charts weren’t enough to sate your chart-fetish, here’s two more. Look at the monster jump in IPOs from the Internet and compare it to clean tech. It’s possible we could see jump in IPOs like this with clean tech, but highly unlikely. Banks don’t have money to take companies public now.

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Raw Data for these charts:

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