According to an article from today’s Wall Street Journal, venture capitalists are embracing green technology in a big way. Industry leading VC firm Kleiner Perkins Caufield & Byers is allotting approx. one-third of its investment dollars to green technology. The lions share of this money is going into companies developing alternative fuels, fuel-efficient devices and other “clean” technologies.
The majority of the article is an interview with Kleiner Perkins partner John Doerr with WSJ’s Jeffrey Ball. Interesting read so I thought I would include excerpts from the interview that is actually the rest of the article from the WSJ.
Blind Predictions
JEFFREY BALL: There’s a fascinating statistic from the International Energy Agency, which says that right now, about 80% of the world’s energy supply comes from fossil fuels. And the prediction of the IEA is that in 25 years, it will be 81%, and that’s a statistic that leads a lot of people to think about the word “renewables” and roll their eyes and say, “What’s the point?”
So when you look at where to put money in this space, what are the technologies that environmentally could make a difference, that are big enough to make a difference, and how does that differ, if it does, from the technologies that will make you money now?
JOHN DOERR: That forecast from the IEA is like sitting 
around in 1994 and trying to forecast how many Internet Web browsers would be used. There was no commercial Web browser just 13 years ago. Think about that. And now it’s pervasive.
The IEA is not in the R&D labs in Berkeley that are doing synthetic biology there. They’re not in the R&D labs around Boston that are making photovoltaic cells out of carbon nanotubes. And I think their forecast, I hope, is going to be very wrong.
Having said that, what’s important about what they say is the scale of this problem, and this is of a size and enormity, both the opportunity and the challenge, unlike anything that innovators have ever addressed.
Immediately, in the very short period of time, I like solar thermal energy that you can put together. We have a project that’s a 277-megawatt plant, and it’s paid for, contracted for, with a power-purchase agreement. And it will produce electricity at about the price of electricity from natural gas in California.
Biofuels, innovative biofuels, will scale. They can be adopted very gradually. I personally believe that photovoltaics, while further out, hold a lot more promise than anyone anticipates today. But the greatest, most immediate scale that we can possibly get is from innovation in efficiency, innovations in conservation. One thing I’m fond of saying is that the solutions to this problem are going to all come from cars, from coal, from conservation or efficiency, and then the final source of greenhouse gases is cattle. Those account for some 18% of the greenhouse gases. So, cars, coal, conservation and cattle
Technology and Will
MR. BALL: Correct me on my number if I’m wrong — but you have a portfolio of about $700 million and about $250 million or so is invested in what you call green tech?
MR. DOERR: That’s roughly right, yes.
MR. BALL: Ultimately, is this a technology problem or is this a political-will problem, or is it something else?
MR. DOERR: The answer to that is yes, a definite yes. It’s interesting to think about green technology relative to information technology and biotechnology. Our partnership is one of the few — this is not a commercial — trying under one roof to do well in information technology, green technology and biotechnology. We were very fortunate to back Genentech, [which] started the whole recombinant DNA genomics industry, and in information technology, some great Internet companies.
These Internet companies can get from venture capital to profitable with about $25 million of equity. It depends where you are in time. Electronic Arts was started with $2 million, Amazon with $8 million, Google $25 million of venture capital. The venture capital required to build a biotech company, it’s $1 billion of funding to get you to a drug that’s approved by the FDA and it’s more than 10 years; the Internet, less than five years to get to a profitable, growing business.
Green tech sits between these two.
which is a very advanced fuel-cell provider, [received] $250 million of private capital and it’s been seven years to get to a product. So what’s very attractive about the green technologies is the markets are enormous. The Internet market, $100 billion or so; the energy market, $6 trillion. This is the mother of all markets. The pharmaceutical market, much smaller.
Let’s look at policy and regulation. In green technology, policy matters a lot. Policy is paramount. There’s not an element of the energy industry that’s not regulated, that’s not incentivized, that’s not subsidized, that doesn’t involve every fiber of our nation and our world, whether it’s our defense strategies or the structure of the industry.
Improvements in policy will accelerate the success of all these investments in all these businesses. And I’m a capitalist first. My job is to make a lot of money for our limited partners, who are the endowments of America’s great universities.
But the wonderful thing about working in green technologies is you can do work that’s successful and also significant. You can help engineers and scientists build great companies that will innovate fuels or batteries or storage, or even more immediately, that can enable all of us to conserve, to be more efficient. Now, we haven’t made any investments yet in cattle, in the methane that comes from the cow manure, but with that being 18% of the greenhouse gases, maybe we should check it out.
MR. BALL: Some people are making investments in that area.
MR. DOERR: Some people are; it’s on our list.
MR. BALL: What’s the investment?
MR. DOERR: I haven’t made it yet. I’m doing diligence.
MR. BALL: What’s it going to be?
MR. DOERR: Well, in the Central Valley of California, there are big pig farms, and I’m going to let it lay there.
MR. BALL: We know where the traffic is moving after this conference.
Other interesting articles we’ve written about Green Investing -
Green Investing and Mutual Funds
Green Companies Win
Eco-Friendly & Fair Labor Clothing
http://www.sattlerclothing.com
ures of a product. The new eco-labels will appear first on some HP Deskjet and LaserJet printers but will eventually grace all of the company’s products. The labels, called 
and increasing by 5 percent tomato yields by using hybrid seeds that require less water, fertilizer, pesticides and fuel to harvest.