Here’s why climate tech can prevent the mistakes of clean tech from being repeated – Vidak For Congress

Here's why climate tech can prevent the mistakes of clean tech from being repeated - Vidak For Congress 1

About a decade ago the cleantech boom broke down. Industry enthusiasts fell like flies. Solyndra, the most famous, quit after taking a $500 million loan from the US government. The German Q-Cells also went bankrupt and was bought by the South Korean Hanwha. A123 Systems, a battery manufacturer, was bought cheaply by Wanxiang, a Chinese auto parts company. That’s only a partial list.

There are countless reasons why so many companies went bankrupt. Some had the right technology at the wrong time. Many relied on venture capital, which typically seeks returns on a timeline that is brutally short for deep tech companies. Others were undercut by foreign competitors. Still others succumbed to the general market forces that swept across the world during the Great Recession. Whatever the reason, the collapse deterred venture capitalists, who avoided the sector for years despite the potential for huge long-term profits.

But in recent years, venture capital has returned, investing tens of billions of dollars in companies hoping to solve environmental problems. What changed? First up is the name: clean technology is out. Climate technology is in.

Cynics might mock the change as marketing fluff designed to shed the sins of the past. They are not entirely wrong. After the last boom-bust cycle, the clean tech label was tarnished. Founders, for all their talk about failing quickly and learning from failure, generally don’t like to be associated with that kind of failure, even by semantic association.

Climate technology has an added value that can apply to any startup in the vertical: carbon reduction.

But if you dig a little deeper, it’s clear that climate technology is more than just clean technology 2.0. It is both a natural development and a bottom-up rethinking of establishing and investing in eco-friendly startups. Climate technology is how founders and investors can work together to bring promising technologies and ideas to market in ways that generate significant profits while addressing climate change in a meaningful way.

For those deep into climate technology, that shouldn’t come as a surprise. But with the recent downturn in the finance world, it’s time to sort out the similarities and differences to see if they suggest things will be different this time around.

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