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: : What is Clean Technology

Clean is more than green

Clean technology, or "cleantech," should not be confused with the terms environmental technology or "green tech" popularized in the 1970s and 80s. Cleantech is new technology and related business models that offer competitive returns for investors and customers while providing solutions to global challenges.

While greentech, or envirotech, has represented "end-of-pipe" technology of the past (for instance, smokestack scrubbers) with limited opportunity for attractive returns, cleantech addresses the roots of ecological problems with new science, emphasizing natural approaches such as biomimicry and biology. Greentech has traditionally only represented small, regulatory-driven markets. Cleantech is driven by productivity-based purchasing, and therefore enjoys broader market economics, with greater financial upside and sustainability.

Cleantech represents a diverse range of products, services, and processes, all intended to:

  • Provide superior performance at lower costs, while
  • Greatly reducing or eliminating negative ecological impact, at the same time as
  • Improving the productive and responsible use of natural resources

Why is CleanTech important for Louisiana ?

Many states and countries are aggressively pursuing CleanTech investors and entrepreneurs through a variety of programs that Louisiana could emulate. Connecticut, Massachusetts, Texas, New Mexico, New York, New Jersey, Florida, and Pennsylvania were all mentioned by CleanTech VCs as having proactive CleanTech public policies. Europe and Japan are also successfully building CleanTech clusters. For instance, Germany and Japan have even usurped California’s once-leading position in solar and wind energy through targeted policies and initiatives. Most states’ and countries’ CleanTech efforts are focused on renewable energy, to the exclusion of other CleanTech sectors. This presents an opportunity for Louisiana to establish itself in other fields, such as information technology, materials science, and transportation.

Technology research and development should be at the heart of Louisiana's efforts to establish a CleanTech cluster. Yet private early-stage funding often is hard to come by for CleanTech companies. The state can play a valuable role in helping them bring their technologies and products to market by increasing public spending for CleanTech research and development activities. A key step will be to encourage the University system to focus more of its research on CleanTech. The state should also consider expanding funding for existing programs and creating new programs to support under funded sectors in the CleanTech industry.

Why is CleanTech good for the environment ?

CleanTech as a distinct industry is still in its formative years. The industry encompasses a broad range of products and services, from alternative energy generation to wastewater treatment to environmentally friendly consumer products. Although some of these industries are very different, all share a common thread: They use new, innovative technology to create products and services that compete favorably on price and performance, while reducing mankind's impact on the environment.

Some CleanTech sectors, such as wind power, solar power, and air pollution control equipment, have long pedigrees, boasting billions of dollars of research expended and hundreds of successful companies. Other technologies and industries are more nascent: Environmentally focused nanotechnology and solid oxide fuel cells, for instance, are promising fields but have yet to achieve widespread commercial acceptance.

What is the growth potential for CleanTech ?

Venture capital interest in CleanTech has surged in the last several years, largely because of a fundamental change in the economics of the environmental industry. Advances in technology, research methods, manufacturing, and communications have lowered the costs of environmentally sensitive technologies, bringing many into the economic mainstream. At the same time, worldwide efforts to address environmental problems such as global warming, air pollution, water pollution, and increased energy use are on the rise. This confluence of forces-the simultaneous maturity of both environmental technology and impetus- makes CleanTech a promising sector for future growth.

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