Bailout not withstanding the economy is clearly in recession, probably globally. Auto sales are down 15-30% and soaring job losses - 159,000 non-farm payroll jobs lost nationally in September. It's fair to ask where things are headed with the nascent green economy.
A major bright spot is the continued soaring VC investment in clean-tech.
Venture capital investors continue to look beyond the current financial crisis and see clean-technology innovations as a prime place for their money. The segment posted another record period in the third quarter of 2008, with a total of $2.6 billion worth of investments globally.
In fact, a report to be released today by the Cleantech Group reveals that investments in companies working in solar, the smart electrical grid, algae for fuel and other categories so far this year already have topped all of what was invested in 2007. That's $6.6 billion in the first nine months of 2008 compared with $6 billion in all of 2007.
Nearly $419 million in the third quarter (and more than $1 billion so far in 2008) went to companies based in Silicon Valley, the research and financial services company said.
Not all of course is rosy. The credit crunch is having material impact. Lehman Brothers, Goldman Sachs and Morgan Stanley were/are major players in renewable energy financing and that will force reassessment or adjustment of some projects. Greater ROI will be a likely demand as will industry consolidation. But these dynamics are affecting not only the renewable energy industry. Similar dynamics should be expected for sustainability initiatives in other sectors as some of the 'lightweight' greening initiatives fall away and longer-term efforts may be more challenging.
However the continued investment is being driven by a sense of inevitability of peak oil impacts and carbon caps fueling continued optimism about opportunities within clean tech. Environmental Defense Fund just released a new report on California green jobs. The report profiles the many types of jobs and training programs in the state. This comes at the heels of a state report on the economic benefits of AB32, the Global Warming Solutions Act.
By 2020, AB 32 will increase state gross product by $4 billion and economic production by $27 billion compared to the business-as-usual scenario. Per capita income will grow by $200, and more than 100,000 jobs will be added to the economy.
Of course, there remains a lot of fear of increased costs. Further reassurance is needed. But as noted in still another California report, from the Labor Department, Clean Technology and the Green Economy:
As green products and practices permeate the reaches of the economy, the discussion is no longer about the emergence of a new industry; instead it is about the transformation of the entire economy. This transformation is toward an economy that makes more efficient and sustainable use of our limited natural resources.
The challenges - and opportunities - are not going away. They will in fact become more pronounced even in this downturn.