The Biggest Economic Opportunity of This Century!

Venture capitalists are people, just like you and me. They put their pants on one leg at a time, and they're prone to making investing mistakes just like the rest of us. That said, it's hard to deny that some VCs are clearly better than others. And one of Silicon Valley's more successful and higher-profile VCs is John Doerr. Among his big wins are early investments in Symantec,, and more recently, Google.

This success, I believe, gives his words some weight. So when he says, as he did in November, that global warming is real and that "cleantech" is "the biggest economic opportunity of this century," my ears -- and yours -- should perk up.

It's not that the idea of cleantech being a big investment opportunity is new. The Motley Fool, myself, and others have been writing about it for some time. Instead, it was Doerr's explanation of how cleantech can help address global warming that I found so interesting. He laid out four steps for solving global warming, which, when viewed in aggregate, can provide investors with a useful framework for thinking about how to invest in cleantech.

First, Doerr said the U.S. government should adopt a mandatory goal of reducing greenhouse gas by 25% by 2010. This is an ambitious goal and, even with Democrats now in control of both houses of Congress, I feel it is unlikely to be achieved. Nevertheless, I do believe some controls are coming, and investors can profit by understanding which companies are getting ahead of the curve and positioning themselves to benefit from government mandates. For instance, I have written before about Duke Energy's willingness to embrace mandates and explained how this progressive position -- when backed with strategic investments in cleaner coal-burning technologies and large-scale carbon sequestration and alternative fuel energy projects -- could position it ahead of its peers if and when government mandates on carbon emissions are imposed.

More recently, General Electric (NYSE: GE  ) , Alcoa (NYSE: AA  ) , PG&E (NYSE: PCG  ) , and Lehman Brothers (NYSE: LEH  ) have also jumped on board the bandwagon and are now supporting a cap-and-trade approach to controlling carbon emission.

Second, Doerr called for the adoption of renewable sources like solar and wind. This is hardly a bold call, but investors should give serious consideration to investments such as Motley Fool Rule Breakers recommendation Suntech Power. The company's big plans to buy $5 billion worth of solar wafers from MEMC Electronic Materials over the next 10 years is just one indication that it expects to be a leader in the growing solar cell market. Other companies with solar resources worth considering are BP (NYSE: BP  ) and Kyocera (NYSE: KYO  ) .

Third, he said the United States needs to reinvigorate its biofuels industry. To a degree, this is already happening. Archer Daniels Midland now has a 50-million-gallon facility in production, and a couple of months ago, VeraSun announced plans to begin building a new, large-scale 30-million-gallon biodiesel facility. With the advent of new, tougher EPA regulations requiring cleaner-burning diesel -- which biodiesel meets -- the demand for biofuels could grow stronger in the near future. And both companies, by positioning themselves at the forefront of this biofuels "reinvigoration," could profit nicely from its expansion.

Finally, Doerr said there needs to be more investment in technologies that can remove existing carbon dioxide from the atmosphere. I am unaware of companies that are doing this now, but I do know that Headwaters is actively working to develop unique nanoparticle catalysts that might soon help in this quest.

There will be no shortage of other companies working on such technologies, but I encourage investors to keep an eye on the big boys such as DuPont (NYSE: DD  ) . Cleaning up vast amounts of carbon dioxide is a big problem, and it could well take a big company to deliver the resources necessary to make a dent.

Investors looking for a more diversified approach to investing in alternative energy might want to consider the PowerShares WilderHill Clean Energy ETF, which counts American Superconductor, SunPower, and Zoltek among its core holdings.

The bottom line is that, like Doerr, I believe cleantech will be huge. I also believe there will be many technologies and companies taking part in the solution. But before they invest in the field, Fools should be strategic about how they want to approach the opportunity. After all, just because the opportunity is big doesn't mean everyone's profits will be, too.

Interested in more alternative energy Foolishness?

Want to keep abreast of the latest cleantech investment plays? Consider a subscription to the Motley Fool Rule Breakers newsletter. You can sign up for a free 30-day trial here.

This article was originally published on Nov. 17, 2006. It has been updated.

Fool contributor Jack Uldrich still puts his pants on one leg at a time, but he does wear nano-pants that easily repel liquids and prevent staining. He owns shares of GE, Suntech Power, and Headwaters. Symantec is an Inside Value recommendation. is a Stock Advisor pick. Duke Energy is an Income Investor choice. Headwaters, Suntech Power and PowerShares WilderHill Clean Energy are Rule Breakers selections. The Fool has a strict disclosure policy.

Read/Post Comments (0) | Recommend This Article (34)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 521170, ~/Articles/ArticleHandler.aspx, 10/26/2016 1:16:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,219.67 50.40 0.28%
S&P 500 2,142.55 -0.61 -0.03%
NASD 5,266.50 -16.90 -0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 1:00 PM
AA $27.63 Up +0.34 +1.23%
Alcoa CAPS Rating: ***
BP $35.74 Down -0.30 -0.83%
BP CAPS Rating: ****
DD $68.74 Down -0.88 -1.26%
DuPont CAPS Rating: ****
GE $29.03 Up +0.38 +1.31%
General Electric CAPS Rating: ****
KYO $49.21 Down -0.26 -0.53%
Kyocera CAPS Rating: ***
LEH $0.13 Down +0.00 +0.00%
Lehman Brothers Ho… CAPS Rating: *
PCG $60.74 Down -0.05 -0.08%
PG and E CAPS Rating: **