No 2007/2: Why the Climate Change Debate has not Created more Cleantech Funds in Sweden

Abstract: There are a number of long-term global trends driving the demand for more environmentally friendly technologies. This area, referred as “cleantech”, was coined in the United States during this century and described as “new technology and related business models offering competitive returns for investors and customers while providing solutions to global challenges” ( Cleantech Network, 2007). This and others like it represent broad definitions of technology that can replace old technology with new and improved solutions that offer a reduced impact on the environment.

Urbanization and growing world population are strong drivers for technologies that offer solutions in the area of transportation, water supply and treatment, air pollution and energy (Nutek, 2006). As mentioned in reports by Stern and International Panel of Climate Change (IPCC) the consequences of over 150 years of mainly western industrialization have resulted in imbalances of the global ecosystem. The unsustainable production and consumption of non-renewable energies have caused a global increase in green house gas emissions and the emerging threat of climate change (Stern, 2006). The depletion of energy resources calls for a need to develop even more effective ways of combustion of fossil fuels or renewable energies. The uncertainty of global fossil fuel supply is causing non-renewable energy price to move up. This has a destabilizing effect on national security as governments grow dependent on oil & natural gas imports (Nutek, 2006).

For these reasons there are strong incentives for investors to receive attractive returns for investments in cleantech industries. So far the interest from the investment community has been by far greater in the United States than in Europe and especially Scandinavia. This by itself is remarkable as US is many times portrayed as unwilling to take on and bare responsibility for its contribution towards climate change. In spite global trends driving demand for cleantech companies this paper looks at reasons why Swedish fund managers have not until now launched a few products for private investors on the Swedish fund market.

Keywords: No; Keywords

23 pages, November 20, 2007

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