Cleantech

For my fellow tree-huggers out there, there's an interesting article in today's NY Times about the marrying of the capital market and environmental innovation. About a decade ago, Nicholas Parker began the trade group Cleantech Venture Network, which aims to connect venture capitalists with start-up companies developing alternative sources of energy and other environmentally friendly pursuits. At the risk of echoing one of the tenets of the Bush Administration, I've always maintained that the best way to tackle the vast environmental problems we currently face would be to somehow make environmentalism profitable. Profit motive has always been the greatest driving force of mankind. If we could someone encourage a market demand for a cleaner environment, many of our environmental problems would be solved. Fortunately, it seems that one side effect of higher oil prices has been a greater interest in alternative sources of energy. Now that there's the potential that money can be made from protecting the environment maybe we'll see some significant advances in environmental sustainability over the next few years. (As an aside, I've always believed that we should be paying more for gasoline to take into account the negative externalaties in order to reflect the true cost of the gasoline that we consume. But, hey, that's easy for me to say because I've never owned a car and have no intention of getting one anytime soon.)

While profit motive has led to substantial improvments in quality of life, especially since the industrial revolution, economics does have its limits. I believe that it was John Maynard Keynes (or perhaps Adam Smith) who predicted that as a result of the increased interconnectedness of nations, war would be a thing of the past. By its very nature, war disrupts the free flow of capital, and, by their very nature, human beings are extremely reluctant to willingly pass up financial gains. Clearly, he was wrong. Maybe humans' need to conquer is the only thing that surpasses our greed. Although we may be stuck with war through the end of time, I hope at least that our desire for wealth accumulation will lead us to a cleaner, prettier world in a generation's time.