With the effects of global warming hitting home and the investment world scurrying to develop products that can offer exposure to what's become a trendy field, a New York-based research firm has warned of possible signs of a bubble in clean technologies.
Estimates suggest spending on the development of 'clean technology' is due to jump 14 per cent this year, hitting US$55billion. And Asia is an increasingly important testing ground, with countries such as Japan, China and South Korea leading the way in terms of government funding, corporate research and development and scientific research.
But sceptical voices are suggesting that too much money may be flooding into certain areas of clean tech, particularly energy research. Venture capital in that area has more than doubled, to US$1.5billion from US$623million, mainly on research into solar power and biofuels.
'The warning signs of a bubble are appearing in the energy segment,' a new study, 'The Cleantech Report,' from New York-based Lux Research, suggests. 'With 930 energy startups operating worldwide - 198 of which are venture-funded - energy technology looks primed for a classic private equity boom and bust.'
The total value of the initial public offerings in clean energy jumped from US$1.6billion in 2005 to US$4.1billion in 2006, and looks set to post another record this year. Besides private funding, energy also commands more than half of the US$26billion in government funding that was devoted to the sector last year.
But energy is only part of the clean technology scope. The report says opportunities are likely to be better in other fields such as clean air, clean water, waste-product reduction and sustainability.