Green blues

The Economist, a newspaper which only reletively recently came around to the idea of climate change as a significant global threat, leads this week with fears that 'the flood of money into clean energy is better news for society than it is for investors'. 'Displays of excessive enthusiasm for particular new technologies often end in tears', and the risks of boom turning to bust are especially acute with industries that will remain heavily dependant on government subsidy for much of the foreseeable future. Yet the idea that this will prove 'excellent news for society' as a whole should current rapid increases in investment (up from $500m in 2004 to over $2 billion this year thus far) in green technologies prove foolhardy for investors is woefully short term. Should many investors get burnt this will most likely be due to a political climate that has begun to chafe at the costs associated with containing global warming, which a collapse in the industry would no doubt reinforce, leaving cheaper clean energy and lower fossil-fuel consumption over the next few years more than offset by the subseqeunt loss of green momentum. It thus falls to governments, and perhaps of equal importance over the medium term the oppositions in the demoncratic world which hope to replace them, not to disappoint. It is vital that current momentum in countries such as Britain is not alowed to wane, and attempts are made to reach out to facilitate the distant dream of a global carbon tax.