Sunday, March 02, 2008

The Next Bubble

We are in the midst of the collapse of the housing market, and the ensuing credit market's turbulence. It seems, however, that the next bubble is already starting to build. This is hard to admit for me, as the build up appears to be coming in an industry near and dear to my heart: the environment.

There is a definite push of investment into the field; estimates point to circa $3.0bn of investments in 2007. But I am skeptical about many of these investments - just how many different solar cell manufacturers are sustainable? and how many community bike sharing projects will actually work?

This push of investment is again creating a wave of fictitious wealth based on valuations which may not pan out. While there is certainly a place for many of these technologies, and I am a huge supporter of environmental improvement through technology, it is concerning to see dollars chasing these investments in a fad like manner, especially when considering the vital importance of these technologies panning out in an effective manner.

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