The global financial crisis that took hold in 2008 was a wake-up call for business and government leaders worldwide. It's no longer realistic to pursue a business model that promotes growth at all costs. Unsustainable growth, after all, was at the heart of the U.S. real estate bubble that triggered the collapse. Unfettered expansion, scientists also warn, only increases our appetite for oil and other fossil fuels that contribute to global climate change. In the post-crisis economy, business and government leaders around the world have rallied around a new flag: sustainability.
By now, you've certainly heard of "going green." Well, green energy is sustainable energy. Also known as clean energy or renewable energy, green energy refers to electricity or fuel that is derived from renewable sources like the sun, wind, water, geothermal energy and biomass. Green energy, unlike fossil fuels, does not damage the environment to capture it or use it [source: ACORE]. But green energy is more than just a feel-good environmental movement. It is also widely viewed as the best prospect for business and job growth over the next decade.
U.S. President Barack Obama has identified the green energy sector -- he calls it "clean technology" -- as the catalyst for domestic job creation and long-term economic growth. United Nations Secretary-General Ban Ki-Moon has also stated that sustainable energy will drive global economic growth in the near future. Even if investors don't buy the hype, they can't ignore the headlines. Oil prices are skyrocketing, thanks in part to Middle East unrest, the BP oil spill in the Gulf of Mexico and the near meltdown of several Japanese nuclear reactors have further soured investors on the safety and viability of conventional energy production [source: Shell].
As a result, money is pouring into the green energy sector from governments, institutional investors and individual investors worldwide.
- Global investment in green energy in 2010 totaled $243 billion, an increase of 30 percent over 2009 [source: Pew Charitable Trusts]
- In the first quarter of 2010, venture capital investment in clean technology, which includes green energy, was up 68 percent from the previous year [source: Zwilling]
- In the first quarter of 2011, stock market funds tied to green energy rose almost 14 percent [source: Shell]
While the United States government has promised $172 billion in green energy investments over the next five years, those numbers are eclipsed by China, which plans to invest $397 billion over that same period [source: Jenkins].
Where, exactly, is all of this money going? On the next page, we'll talk about the major green energy industries that are expected to carry the economy of the future.