Clean technology

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Clean technology is any process, product, or service that reduces negative environmental impacts through significant energy efficiency improvements, the sustainable use of resources, or environmental protection activities. Clean technology includes a broad range of technology related to recycling, renewable energy (wind energy, solar energy, biomass, hydropower, biofuels, etc.), information technology, green transportation, electric motors, green chemistry, lighting, Greywater, and more. Environmental finance is a method by which new clean technology projects that have proven that they are "additional" or "beyond business as usual" can obtain financing through the generation of carbon credits. A project that is developed with concern for climate change mitigation (such as a Kyoto Clean Development Mechanism project) is also known as a carbon project.

Clean Edge, a clean technology research firm, describes clean technology "a diverse range of products, services, and processes that harness renewable materials and energy sources, dramatically reduce the use of natural resources, and cut or eliminate emissions and wastes." Clean Edge notes that, "Clean technologies are competitive with, if not superior to, their conventional counterparts. Many also offer significant additional benefits, notably their ability to improve the lives of those in both developed and developing countries".

Investments in clean technology have grown considerably since coming into the spotlight around 2000. According to the United Nations Environment Program, wind, solar, and biofuel companies received a record $148 billion in new funding in 2007 as rising oil prices and climate change policies encouraged investment in renewable energy. $50 billion of that funding went to wind power. Overall, investment in clean-energy and energy-efficiency industries rose 60 percent from 2006 to 2007.[1] In 2009, it was forecast that the three main clean technology sectors, solar photovoltaics, wind power, and biofuels, will have revenues of $325.1 billion by 2018.[2]

According to an MIT Energy Initiative Working Paper published in July 2016, about a half of over $25 billion funding provided by venture capital to cleantech from 2006 to 2011 was never recovered.[3]


Cleantech products or services are those that improve operational performance, productivity, or efficiency while reducing costs, inputs, energy consumption, waste, or environmental pollution. Its origin is the increased consumer, regulatory, and industry interest in clean forms of energy generation—specifically, perhaps, the rise in awareness of global warming, climate change, and the impact on the natural environment from the burning of fossil fuels. Cleantech is often associated with venture capital funds and land use organizations. The term has historically been differentiated from various definitions of green business, sustainability, or triple bottom line industries by its origins in the venture capital investment community and has grown to define a business sector that includes significant and high growth industries such as solar, wind, water purification, and biofuels.[4]


While the expanding industry has grown rapidly in recent years and attracted billions of dollars of capital, the clean technology space has not settled on an agreed-upon term. Cleantech, is used fairly widely, although variant spellings include ⟨clean-tech⟩ and ⟨clean tech⟩. In recent years, some clean technology companies have de-emphasized that aspect of their business to tap into broader trends, such as smart cities.[5].

Origins of the concept[edit]

The idea of cleantech first emerged among a group of emerging technologies and industries, based on principles of biology, resource efficiency, and second-generation production concepts in basic industries. Examples include: energy efficiency, selective catalytic reduction, non-toxic materials, water purification, solar energy, wind energy, and new paradigms in energy conservation. Since the 1990s, interest in these technologies has increased with two trends: a decline in the relative cost of these technologies and a growing understanding of the link between industrial design used in the 19th century and early 20th century, such as fossil fuel power plants, the internal combustion engine, and chemical manufacturing, and an emerging understanding of human-caused impact on earth systems resulting from their use (see articles: ozone hole, acid rain, desertification, climate change and global warming).

Investment worldwide[edit]

Annual cleantech investment in North America, Europe, Israel, China, India
Year Investment ($mil)
*2008 data preliminary
Source: Cleantech Group[6]

In 2008, clean technology venture investments in North America, Europe, China, and India totaled a record $8.4 billion. Cleantech Venture Capital firms include NTEC, Cleantech Ventures, and Foundation Capital. The preliminary 2008 total represents the seventh consecutive year of growth in venture investing, widely recognized as a leading indicator of overall investment patterns.[6] China is seen as a major growth market for cleantech investments currently, with a focus on renewable energy technologies.[7] In 2014, Israel, Finland and the US were leading the Global Cleantech Innovation Index, out of 40 countries assessed, while Russia and Greece were last.[8] With regards to private investments, the investment group Element 8 has received the 2014 CleanTech Achievement award from the CleanTech Alliance, a trade association focused on clean tech in the State of Washington, for its contribution in Washington State's cleantech industry.[9]

According to the published research, the top clean technology sectors in 2008 were solar, biofuels, transportation, and wind. Solar accounted for almost 40% of total clean technology investment dollars in 2008, followed by biofuels at 11%.

The 2009 United Nations Climate Change Conference in Copenhagen, Denmark was expected to create a framework whereby limits would eventually be placed on greenhouse gas emissions. Many proponents of the cleantech industry hoped for an agreement to be established there to replace the Kyoto Protocol. As this treaty was expected, scholars had suggested a profound and inevitable shift from "business as usual."[10] However, the participating States failed to provide a global framework for clean technologies. The outburst of the 2008 economic crisis then hampered private investments in clean technologies, which were back at their 2007 level only in 2014. The 2015 United Nations Climate Change Conference in Paris is expected to achieve a universal agreement on climate, which would foster clean technologies development.[11] On 23 September 2019, the Secretary-General of the United Nations will host a Climate Action Summit in New York.[12]

See also[edit]


  1. ^ "Archived copy". Archived from the original on 2010-05-25. Retrieved 2017-03-06.CS1 maint: Archived copy as title (link)
  2. ^ Addison, John (2009-03-11). "Solar, Wind and Biofuels' Impressive Growth Surge in '08". Seeking Alpha. Retrieved 2018-01-03.
  3. ^ Gaddy, Benjamin; Sivaram, Varun; O’Sullivan, Dr. Francis (2016). "Venture Capital and Cleantech: The Wrong Model for Clean Energy Innovation" (PDF). 77 Massachusetts Ave., Cambridge, MA 02139, USA: MIT Energy Initiative.
  4. ^ "What is Cleantech?" – via
  5. ^ "Cleantech Rebrands as 'Smart City' to Attract Venture Dollars". 28 October 2016 – via
  6. ^ a b "Clean technology venture investment reaches record $8.4 billion in 2008 despite credit crisis and broadening recession" (HTML). Insights. 2009-01-06. Archived from the original on 2013-10-21. Retrieved 2018-10-25.
  7. ^ Caprotti F (2009). "China's Cleantech Landscape: The Renewable Energy Technology Paradox" (PDF). Sustainable Development Law & Policy. pp. 6–10. Archived from the original (PDF) on 2011-06-09.
  8. ^ "Israel, Finland and the US top the Global Cleantech Innovation Index 2014 | FPA Patent Attorneys". 2014-11-13. Retrieved 2016-12-29.
  9. ^ "Element 8 Wins 2014 CleanTech Achievement Award". 2014-11-12. Retrieved 2016-12-29.
  10. ^ "Climate Change Congress". University of Copenhagen. 2009-12-03. Archived from the original on 2009-03-16.
  11. ^ "European Cleantech Innovation: 13 Future Energy System Gamechangers". 2014-11-12. Retrieved 2016-12-29.
  12. ^ "UN Climate Action Summit 2019". 2018-11-28.

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