Bookshelf: The Clean Tech Revolution: The Next Big Growth And Investment Opportunity

February 15, 2008

 

The Clean Tech Revolution: the Next Big Growth And Investment Opportunity
by Ron  Pernick and Clint Wilder

 Reviewed by SUSAN MORAN

Ron Pernick caught the "cleantech" wave well before it crested. In fact it's safe to say he helped shape it, or at least frame it. A former Internet maven, Pernick co-founded Clean Edge, a research and consulting firm, in 2000, just as the dot-com boom was revealing signs of a bust. One of the first research and consulting firms to track the "clean technology" sector, Clean Edge juggles research, conference organizing, consulting for companies and cities, and it creates sustainability indices for stock exchanges.

This new book defines clean tech as "any product, service, or process that delivers value using limited or no nonrenewable resources and/or creates significantly less waste than conventional offerings. (The authors exclude nuclear energy.)

As its subtitle suggests, "Clean Tech Revolution" is aimed at investors, entrepreneurs and to a lesser extent public policy officials. But any journalist wanting to follow solar, wind, biofuel, biopolymers, green building, electric and hybrid-type vehicles, electricity distribution, portable technology and water filtration will learn plenty from the book. Consider it a primer.

The authors have a history in following emerging technologies. Pernick worked in marketing and communications for many years for Internet companies. His co-author and Clean Tech employee Clint Wilder was previously a business journalist with Information Week. As Pernick did, many of today's clean-tech entrepreneurs and investors migrated in recent years from Internet and high-tech companies. One example is Japan's Sharp Corp., a major consumer electronics manufacturer, which has become the leading maker of solar PV panels. The company plans to make up to 710 megawatts worth of solar modules this year.

What the book does best is follow the money trail. The trail is getting more trodden, as prominent venture capitalists are channeling their dotcom fortunes (and losses) into cleantech startups and funds ranging from ethanol to nanotechnology. Some of the more notable and well-heeled investors include Kleiner Perkins Caufield & Byers, with its Greentech investment fund; Vinod Khosla, cofounder of Sun Microsystems, an ethanol evangelist and investor; and the Carlyle Group, a huge global private equity firm with close ties to the Bush administration and stakes in Middle East oil that has invested in bio-ethanol and solar power.

The money trail is also crowded with mutual funds and index-based funds focused on clean-tech-related companies, which include multinational corporations. The authors do not make recommendations on individual stocks or companies.

The authors warn companies that hawk "green" products that they will not win over mainstream consumers by just appealing to their do-good and eco-conscious minds; products and services must ultimately be high quality and cost-competitive, they write. (This hits close to home. I've finally given up on Seventh Generation laundry detergent after seeing my oncewhite socks and underwear turn grayer with each wash.)

Echoing the investors they track, the authors predict renewable resource-based technology will help wean us from fossil fuels. Wind, solar, hydrogen and biofuels sectors will grow fourfold to more than $226 billion in 2016, up from $55.4 billion in 2006, they say.

A skeptical journalist might say the predictions in the book are selfmotivated, given that Clean Edge makes its money directly and indirectly off many of the companies involved. Another weak spot in the book: Little input from environmentalists and public health experts.

Furthermore, the authors devote limited space to public policy measures to promote clean technology, such as statewide and federal subsidies, tax incentives, "sin" taxes (such as a carbon tax) and cap-and-trade schemes.

The book concludes with a sixpoint investment plan for city or state policy makers. The plan suggests ways cities and regions can build a regional technology cluster, shift subsidies from conventional to clean technology, launch a clean-tech fund (modeled after former President Bill Clinton's Clinton Global Initiative), and implement a carbon tax or trading scheme.

Susan Moran is a freelance reporter based in Boulder, Colo.

 

RON RERNICK and CLINT WILDER