Green Technologies and Business Models
Friday 11th September 2009 - 3:30pm - 4:30pm
Annual Meeting of the New Champions 2009
Green Technologies and Business Models
Dalian, People’s Republic of China 10-12 September
Venture capital firms in the US, Europe and China poured a record US$ 6 billion into “green tech” companies last year. This session discussed the game-changing technologies and business models that are attracting these investments.
• New forms of financing are required that link public policies with unlocking more private capital, such as specialized private equity funds for green tech, responding to a clear price signal for carbon
Participants agreed that exciting long-term opportunities to invest in green tech are strong despite the economic slowdown. However, some government actions could accelerate investments. These include creating a level playing field for all energy technologies, especially through the removal of subsidies, and the deployment of the right incentives, in particular creating a price signal for carbon. Deployment of these policies will enable true competition to take place and the market to take off.
While some participants felt that the financial crisis offers an opportunity for economic and environmental stimuli to catalyse a green tech take-off, others felt that green tech investments would not jump to scale unless there is an environmental catastrophe.
Further issues raised:
• Systemic risk – ways to share the risk and offer a better framework to invest in green tech need to be found.
• Subsidies – over US$ 300 million a year is spent globally on energy subsidies. This is both economically and environmentally suboptimal. Can high carbon subsidies be phased out? Subsidies also stifle innovation and blunt companies’ competitive edge. This is particularly the case in the energy sector, where R&D spending lags far behind other sectors, such as pharmaceuticals and ICT.
• Regulations – a combination of cap and trade, regulation and progressive taxation can create the right kind of enabling policy environment but is dependent on effective integration between different government departments (energy, trade, environment, state, etc.).
• While some think a generally agreed-upon global expression of a carbon price is possible by around 2014, others fear that legislation at the speed and scale needed around the world to make this happen is not possible. Yet capital for green technology solutions will only be released if and when an international price for carbon emerges.
• Against this background of uncertainty on carbon pricing, given the need to push green tech down the cost curve, new forms of financing which use public monies to buy down risk and unlock more private capital are required.
Michael Biddle, President and Founder, MBA Polymers, USA; Technology Pioneer
James Cameron, Vice-Chairman, Climate Change Capital, United Kingdom; Global Agenda Council on Climate Change
Richard Hausmann, President and Chief Executive Officer, Siemens, People's Republic of China
Song Jiajing, Chairman, DHI•DCW Group, People's Republic of China
Indira V. Samarasekera, President, University of Alberta, Canada
DisclosuresThis summary was written by Dominic Waughray. The views expressed are those of certain participants in the discussion and do not necessarily reflect the views of all participants or of the World Economic Forum.
Copyright 2009 World Economic Forum
No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of the World Economic Forum.
11 September 2009
Keywords: green technology, investors, low carbon, opportunities
Recommended reading for: investors, green tech companies
Indira V. Samarasekera
President, University of Alberta, Canada
BSc, University of Ceylon; MSc, University of California; PhD in Materials Engineering, University o...
Executive Chairman, J&J Group, South Africa
1981-94, Trade Union Leader; 1991, led ANC-Alliance team in negotiating National Peace Accord; 1992,...
President and Chief Executive Officer, Siemens, People's Republic of China
Studies in Physics, Regensburg University and State University of New York, Stony Brook; 1988, docto...
Chair of the Board, Overseas Development Institute, United Kingdom
Non-Executive Chairman, Climate Change Capital. Chairman, Overseas Development Institute (ODI). Memb...
Chairman, DHI·DCW Group, People's Republic of China
2001, MBA, Dalian University of Technology, China; 2008, Executive MBA course, Institute Of Technolo...
Michael B. Biddle
President and Founder, MBA Polymers, USA
1978, BSc in Chemical Engineering, University of Louisville; 1991, Master's in Management Science, S...