Over-investment in green tech, is money being lost?

Boston: Following the dot-com boom, there have been several questions asked on whether new sectors, such as clean-energy technologies, are in danger of over-investment. As the green-tech category has attracted billions of money in venture capital over the past decade, there's concern that money will be lost, particularly since there are so many relatively new investors in energy technology, reports Martin LaMonica of CNET.

If there was a consensus among panelists comprising of thinkers and investors at AlwaysOn GoingGreen East conference, it was that there have already been "mini bubbles," driven either by overzealous investors or government subsidies. The most recent examples are solar, where dozens of companies were formed over the past few years, and corn ethanol, an industry which grew rapidly based on supportive government policies.

The usual assumption is that people should avoid speculative investment bubbles, since they're bound to lose money. But Ethernet Inventor Bob Metcalfe, who is now a venture capitalist at Polaris Ventures, argues that bubbles and even "boondoggles" are an important "source of innovation." The role of government is central to the discussion of investment bubbles in energy because power and fuel markets are far more regulated than the Internet. Also, governments around the world, in general, seek policies that encourage domestic and clean sources of energy.

The role of government is central to the discussion of investment bubbles in energy because power and fuel markets are far more regulated than the Internet. Also, governments around the world, in general, seek policies that encourage domestic and clean sources of energy. Governments around the world are now more actively encouraging domestic and low-carbon energy sources.