Green-tech investment falls 50%, but it’s no time to worry

The first quarter of 2009 saw a sharp decline in all forms of investment in clean-tech and energy both compared with a year ago, as well as the fourth quarter of 2008. Overall, the $13.3 billion invested was down 53% from the previous year and 44% from the last quarter. Investments in new renewable-energy projects led the decline, with venture capital investments also dropping 22% and a near evaporation of all investment in pure-play clean energy companies. However, this raw figure does not tell the entire story for the industry, nor is it necessarily indicative of a trend.

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Crunching Sustainability Pt. 1: Iceland

Smash the Mirror tries to bring solid economic and rational thinking to sustainability, geopolitics, and current events. To that end, this is a pilot post for a new series on how the Credit Crunch of 08-09 will impact the environmental sustainability of human life. Posts in this series will appear under the tag “Crunching Sustainability“.

By now, the collapse of Iceland’s governing coalition has been circulating through the media for a while. To sum it up in a single phrase, the cause of the fall was the economic crisis and monetary policy. That is why, according to the Washington Post article, there is a new push by some citizens and the country’s Democratic Socialist Party to join the European Union.

Fishing Boats

Fishing boats tied up along a pier.

The Euro has rapidly cemented its reputation as a stable currency, and that appeals to the Icelanders who feel they have been betrayed by inadequate policy-making. Unfortunately, the EU also has its failures, and the fishery management policies are foremost among them. Continue reading

Bill Gross on CNBC (1/8/2009)

William Gross, founder of Pimco was interviewed on CNBC today about the federal government’s role in solving the financial crisis. Obviously, Mr. Gross is a very smart man, and he discussed a number of issues.  I do, however, have to take issue with one of his points:

If you have to put 20% down on a new home, that becomes a struggle in these times and to the extent that the FHA can come in there and allow a 3 or a 4% down payment, then that combination–I think–can support the housing market.

Certainly it is true that there must be liquidity for the economy to come back, and many leading economic thinkers such as Paul Krugman believe the US Economy is in a liquidity trap and needs a sustained, extremely loose money supply. Even so, it is difficult to accept that the solution to the mortgage crisis is to create new, unconventional mortgages with little payment upfront and huge amounts of debt. Gross is certainly right that loosening the standards for loans will keep housing prices high, but perhaps prices before the crash were just unrealistic, the product of fervor and lax appraising standards. Does chasing these inflated prices risk another wave of foreclosures in the future?

The Myth of Being Too Poor for Sustainability

One myth regarding sustainability just never seems to go away: the notion that it is expensive. It came to the forefront again during this past US Presidential Campaign. Mr. Obama has expressed strong support for environment, something for which he should be commended. Instead, he was attacked for being impractical.

The American voters subsequently choose Obama in huge numbers, giving him a 365-173 electoral college victory and a mandate to follow through on his agenda. Now in seemingly every interview, the Obama team is being asked what they will sacrifice from their agenda in order to cope with the Economic Crisis, as if to say “we won’t really waste money worrying about the planet, right?”
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The Barrier to an Economic Recovery

As retirement accounts shrink, jobs become more difficult to find, houses are foreclosed upon and the nightly news is dominated by talk of recession, the price of energy has been one bright spot for people struggling to pay their bills.  While prices of gasoline have fallen by 50% since the middle of the summer, the ultimate cause has not been any below-ground factors but rather the economic slowdown itself.

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Why Shortsellers Aren’t Villains

A ban expired today that had prohibited the shortselling of certain stocks in the financial sector. Unfortunately, it is common practice to villainize  those who short a struggling stock, and in this case to actually ban it. This mentality is so pervasive that Jim Cramer actually jumped on board on his popular show, Mad Money on CNBC. Jim Cramer is pretty popular around these parts for his preaching of solid fundamentals like diversification and his harsh criticism of the creation, packaging, and evaluating of subprime mortgages that led to the crisis, but on this issue at least, his position doesn’t make much sense.

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Sustainability During the Credit Crisis

With a sudden rash of failures and dirt-cheap buyouts of investment banks and consumer lending institutions, the credit crisis is dominating the mainstream media, and rightly so. Let us consider for a moment, the effect it might have on sustainability.

The old stereotype is that environmentalism is a luxury good, and that if people get poorer in real terms, they will have to sacrifice it. Of course, this simply is not true. Environmental responsibility can save money, in the form of lower energy bills, lower water bills, or offsetting material costs through recycling, to name a few. So one might expect even more sustainable behavior in order to cut costs. Unfortunately, this is probably not true either.

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