Global Warming Ventures

Is global warming heating up the U.S. job market?

I spent the last few weeks asking that question, and found a trove of answers. Yes, experts explained, the way our country is beginning to confront climate change is spurring jobs now, and has the capacity to create more in the future.

But how and when they'll shake out is yet to be seen.

One of the clearest signals of growth is that venture capitalists are backing "cleantech" industries--those that use new technology that performs better while reducing costs and negative impacts on the environment.

A May 2006 report by the Natural Resources Defense Council and the Cleantech Venture Network LLC says venture capital investing in U.S. cleantech startups was $1.4 billion in 2005, meaning it was tied as the sixth biggest investment sector among venture capitalists.

Also according to the report:

... every $100 million of VC money invested could help spur the creation of 2,700 direct jobs at venture-backed companies, many more indirect jobs, and $500 million in incremental annual revenue over the subsequent two decades, while also benefiting the environment.

MarketWatch, New York Times Coverage

A Feb. 20 article from MarketWatch.com pointed to venture capitalists' growing interest in the cleantech arena:

In what could eventually become the biggest economic groundswell since the dot-com craze, venture capitalists and entrepreneurs have doubled their attendance to about 1,000 at this year's Cleantech Forum as investment interest in alternative energy and other related industries continues to rise. ...

Nicholas Parker, chairman of the Cleantech Group, a venture capital network based in Ann Arbor, Mich., said clean technology "may be the biggest job and wealth creation opportunity of the 21st century."

Drivers for growth include carbon emissions trading, the growth of China, interest in biofuels, concern about global warming, job creation, Internet technology, the need for more clean water, and executives at Fortune 500 companies pushing for uniform regulations to improve efficiency.

A March 14 New York Times article looks at how venture capitalists are focusing on energy startups and compares the momentum to the dot-com era:

Out of the ashes of the Internet bust, many technology veterans have regrouped and found a new mission in alternative energy: developing wind power, solar panels, ethanol plants and hydrogen-powered cars.

It is no secret that venture capitalists have begun pouring billions into energy-related start-ups with names like SunPower, Nanosolar and Lilliputian Systems. ...

This time around, entrepreneurs say they are not expecting such quick returns. In the Internet boom, the mantra was to change the world and get rich quick. This time, given the size and scope of the energy market, the idea is to change the world and get even richer — but somewhat more slowly.

Those drawn to the alternative-energy industry say that they need time to understand the energy technology, and to turn ideas into solid companies. After all, in contrast to the Internet boom, this time the companies will need actual manufactured products and customers.

Experts in both stories advise caution, pointing to hurdles and potential risks involved in backing cleantech.

On the Brink of a Climate-Change-Job-Boom?

I have a sense we're riding a wave still in its infancy.

Many experts I interviewed spoke with a sense of urgency. They underscored the tremendous opportunity that awaits, particularly on the job market, as America continues to respond to challenges presented by global warming. 

There likely will be letdowns along the way. There probably are still more questions than answers. And a future climate-change-job-boom might not be as speedy as the dot-com mad dash.

But lessons from the dot-com era could help make a climate-change-job-boom stronger and more lasting, as the above articles suggest.

Our fast-forward culture may want results yesterday, but after all, it took longer than a day to build Rome.

Stay tuned for my upcoming coverage of climate-and-jobs on PayScale.com and, as always, share your thoughts.
--kc

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