Wall Street Invests Big in Green Technologies

You know a cultural movement is real when the money men get on board. In just the past year a broad swath of financiers -- venture capitalists, hedge funds, investment banks, public pension funds, and even stodgy insurers -- have begun sinking billions of dollars into producers of ethanol, fuel cell superbatteries, microscopic bugs that turn glucose into plastic, environmentally friendly pesticides, anything that might tap into the green craze.

Last year, $17 billion poured into clean-energy projects in the U.S. -- 89% more than in 2004, estimates researcher New Energy Finance Ltd. Worldwide, the $49 billion collected in 2005 was up 62% from 2004.

Of course, the green gains of the past few years are directly related to the price of oil, which has doubled since 2003. Oil remains the main lens through which all energy is viewed, and it takes high prices to stir demand for alternatives. Some economists are forecasting $100 a barrel for the foreseeable future. Others say it would take only the briefest of global recessions to push the price of oil below $40. Certainly the big payoffs for alternative energy would vanish in a second if oil prices were to plummet suddenly.

As they say, the solution to high prices is high prices. While some complain about the huge profits the oil companies are making, those profits entice Wall Street to invest in alternative energy companies in hopes of making some huge profits for themselves.

via Business Week