Cleantech VCs ready for 2008

According to the National Venture Capital Association (NVCA), VCs are going to continue to pour money into Cleantech areas beyond solar and biofuels. There will be consolidation, more venture-backed IPOs and an eventual over-valuation of the sector. See the NVCA Report.

Will the sector really become over-valued though? With global demand increasing everyday from the emerging market – notably the drastic increases seen in the middle classes of India and China – it is very hard to state exactly where an upper boundary exists. Growth these days is not limited to the US, but it is measured in a global framework that is only beginning to be defined by newer business trends and strategies.

Global warming and energy reserves continue to be an issue that becomes more evident everyday. Until realizable change is evident, the cleantech market will continue to grow and expand at obscene CAGRs. We are only at the dawn of a new era in renewable energy and cleantech; hang on for the ride.

Climbing the CN Tower

Global Warming, also called climate change is the single biggest environmental threat facing our world today! In order to help World Wildlife Fund (WWF) Canada fight global warming, I’ve decided to climb the 1,776 steps of the CN Tower. While I will do the climbing, I need you to help me raise needed funds. Remember, for every pledge of $20 or more you will get a tax receipt.

Its ME vs. CN Tower! Place your bets on the winner …

To sponsor me, please go to:

Climate is Changing Now, Business Opportunities

The latest report from the Intergovernmental Panel on Climate Change (IPCC) is one of the first to use observations of the Earth’s climate, as opposed to theoretical models to predict what might happen in the future. The data shows that climate change is real and is happening right now.

Source: IPCC. (Click to enlarge)

Take a look at the different key areas being affected here: water, ecosystems, food, coasts and health. There might be some business opportunity in the new wave of cleantech, biotech, or Blue Gold!

Water, Water Everywhere, But Where to Invest?

Okay, so chances are that you already know that the global water supply is in jeopardy. You probably also know that global warming is going to impact current water conditions in two ways among many. Glacial water run-off, and land-based aquifers are slowly declining in their supplies and the trend looks like it is going to continue.

The harsh reality is that this is going to happen for at least 15-20 more years, and as a consequence, Blue Gold is going to increase in value. So, how are you going to capitalize on water? Do you know your investment opportunities? Quite Contrarian produced a nice little summary entitled Investing in Water Stock: Options for Profiting from ‘Blue Gold’ that discusses a few ways in which you can position yourself to capitalize on water stocks, utilities or ETFs (exchange traded funds). Get in the know.

US Masks Global Warming Consequences

The US administration is being accused with editing out the significance from the scientific proposals made by lead scientists, notably James Hansen who is the director of the NASA Goddard Institute for Space Studies, and a pioneer who first started warning us all about the threats of climate change.

There was a great article that talks about all the hype – from NewScientist, I have highlighted some of the interesting points:

In a 10-year policy plan, Cooney and Brian Hannegan, also at CEQ, made at least 181 edits to emphasize scientific uncertainty regarding the effects of climate change and 113 changes to minimise the importance of human contributions to global warming, according to the committee’s memo.

For example, Cooney replaced “will” with “may” in the sentence: Warming temperatures will also affect Arctic land areas.” He also deleted this sentence: “Climate change has global consequences for human health and the environment.”

Hansen had previously accused political appointees of trying to silence scientists (see US agencies accused of muzzling climate experts). His case came to prominence in 2006 after he had called for cuts in greenhouse gas emissions (see Top climatologist accuses US of trying to gag him).

See full article at: US fudging of climate science – details revealed

Turning Carbon Dioxide into Fuel

It’s been said that we have been polluting the air with billions of tons of carbon dioxide and that its a bad thing. Well … not if you’re Frederic Goettmann, a chemist at the Max Planck Institute for Colloids and Interfaces in Potsdam, Germany. He is designing a catalyst that could help turn CO2 into fuel!

Goettman stated “We have taken the first step towards using carbon dioxide from the atmosphere as a source for chemical synthesis. Future refinements could allow chemists to reduce their dependence on fossil fuels as sources for making chemicals. Liquid fuel could also be made from carbon monoxide split from CO2.”

Here are some highlights from the Goettmann article:

In an attempt to emulate this natural process, Goettmann and colleagues Arne Thomas and Markus Antonietti developed their own nitrogen-based catalyst that can produce carbamates. The graphite-like compound is made from flat layers of carbon and nitrogen atoms arranged in hexagons.

The catalyst’s next useful step was to enable the benzene molecules to grab the oxygen atom from the CO2 in the carbamate, producing phenol and a reactive carbon monoxide (CO) species.

The researchers are now trying to bring their method even closer to photosynthesis. “The benzene reaction currently supplies the energy that splits the CO2,” Goettmann says, “but in plants it is light.” The new catalyst absorbs ultraviolet radiation, so the team is experimenting to see if light can provide the energy instead.

The Max Planck technique has only been demonstrated on a small scale and it has a low yield of 20%, he points out. “But it looks quite promising,” he adds. “The catalyst can be made cheaply and it works at a relatively low temperature.”

Investors, investors? Where are you? This is a disruptive technology in the making. If these guys are really able to turn carbon dioxide into fuel in a way that yields a net energy gain, it is a monumental step for energy sustainability. If they can adapt the technology to breakdown carbon dioxide and convert it to other non-polluting sources such as graphite, it could even be used to fight global warming — albeit, it would have to be used quite broadly!

Banking on Global Warming

Many variables are contributing to the warmth of the world, at at the same time a whole of set of opportunities are arising as a result of the global warming bug.

Opportunities lay in:

  • Biotechnology applications for coal plants to “scrub” emissions before they are released
  • Cleaner oil refinery processing, to emit less carbon dioxide from oil sands particularly in Alberta, Canada
  • Carbon sequestration technologies to capture and store carbon dioxide deep within the Earth (still to be determined if this is a good idea)
  • Real estate and community planning of areas that are either going to become habitable and a lucrative shipping/trading centers (such as Nunavut, Canada described in this article)
  • Places will become flooded as ocean levels rise and entire cities are going to find themselves under 20 feet of water – technologies may be needed in advanced insulation from water, dam building, or something I can’t even imagine right now.
  • Cleantech: as an increasing number of emission laws come into place, there will be an escalating need for cleaner technologies to develop energy efficiently. This is not a new concept, merely a reinforcement of the need. I recently found out that Sustainable Development Technology Canada (SDTC) now has a $550 million not-for-profit foundation that bridges the gap in the innovation chain by fast-tracking groundbreaking clean technologies through development and demonstration in preparation for commercialization. There is certainly incentive for some businesses to consider developing their technologies in Canada, or perhaps, in partnership with Canadian businesses and educational institutions. Interested? Leave me your email in a comment and I’ll put you in touch with some people here in Canada!

The retreat of glaciers and arctic ice sheets are going to open up new shipping routes, key ports and new economic centers. One such gateway community is discussed an interview with a writer from The Atlantic, Gregg Easterbrook. I have to credit Paul Kedrosky for introducing me to this piece from his blog “Paul Kedrosky’s Infectious Greed“. The interview is as follows:

Early in this article you ask, “If the world warms, who will win? Who will lose?” But even the winners in this equation would seem to face grave risks. The Inuit of Canada may come to own valuable ports, for instance, but their traditional ways of feeding themselves and making a living will be decimated as the animals they hunt disappear. I suspect many people will consider the question and answer, “We will all lose.”

No, I don’t think so. In economics we don’t find many zero sum games and I don’t think this is a zero sum game. I think a lot of people and nations will come out ahead. The Inuit–the little semi-nation of Nunavut–is going to become significantly more valuable in a warming world. Right now Nunavut’s a frozen wasteland. I would love to be the guy with the Nunavut promotion account twenty years from now because I’m going to rechristen the place “the gateway to the hemispheres” and invite celebrities, and cruise ships will be stopping by, and the sign on the dock will say, “Welcome to Nunavut, Gateway to the Hemispheres!” We’ll see all kinds of wild economic activity up there. There will be change, yes. The traditional way of life will fade and be replaced with something else, maybe something zany, but change seems an inevitability of human experience. Really no society on earth, maybe the ones in the Amazon basin are the only exception, has been able to insulate itself from change. We can’t insulate ourselves from it and I doubt the Inuit will ever be able to do that, either.

On Technorati:

Global Warming, Cleantech and Canada

The world is ranting about global warming, and it should be. There is a very real problem, and finally politicians are appearing to try to combat them. Is their rationale money, power, influence or an actual regard for the sustainability of Earth?

In recent news President Bush announced an Ethanol deal with Brazil, which will work to increase the development of ethanol; Brazil produces much of its ethanol from sugar cane. Also today, the European Union heads of state agreed on a long-term strategy on energy policy, which followed agreements made in February 2007, when they agreed to cut greenhouse emissions by 20% by 2020. In Canada, Prime Minister Stephen Harper says that Kyoto targets are unattainable, as the former Liberal government committed to a reduction of greenhouse gases to 6% below 1990 levels … Canada is currently 35% over that mark (Vancouver Sun). So … what is Canada going to do to address this issue? Maybe allocate an increase to the investments in startups that are focusing on environmental biotechnology or cleantech solutions? Wow, that sounds like a good idea!

There are currently a number of Canadian company developing cleantech technologies, but certainly not enough. Of those companies innovating that space, most are grossly underfunded as many don’t even have websites! As the Toronto Star tech reporter, Tyler Hamilton, mentions in his cleantech blog – Clean Break – Sustainable Development Technology Canada (SDTC) , a fund created to finance cleantech startups, invested only $43.4 million on 15 new projects in 2005. The Alberta government is currently experiencing massive surpluses in the order of billions, its about time to start financing cleantech and environmental biotech startups so that Canada can remain competitive in the energy, or “Clean Energy” space in the future. Getting an early foothold in the market just seems like a good idea to me …

Canadian technology happens to be some of the most innovative in the world, so says Len Brody, who’s keynote address I saw at the Canadian Venture Forum. Nice guy, I managed to get myself a signed copy of his book Innovation Nation: Canadian Leadership from Java to Jurassic Park. I haven’t had a chance to read it yet, but if your patriotic and want to find out a little more about Canadian business … maybe grab yourself a copy. In any case, if Canadian technology is so innovative, then INVEST IN IT. The lack of funding at the early stage, is crippling the growth and development of Canadian companies. CEOs are constantly chasing money, to stay cashflow positive and burn rates are minimized, which doesn’t allow these start-ups to effectively execute on their business plans.