Red Herring, in the wake of Sir Richard Branson’s $3 billion investment commitment to renewable fuels, asks in this story whether the huge amount of money now flowing into cleantech is creating a bubble that — like we saw with the dot-com bubble — is poised to burst. Is there too much money chasing too few deals, leading to investments in companies that don’t deserve it? Or, are concerns about climate change and peak oil and all the regulatory drivers that follow enough to justify the hype around cleantech?

These questions are timely given the poll I’ve had on this site for the past month. Of the 132 visitors to this blog who voted, 55 per cent said cleantech isn’t an investment bubble waiting to burst, compared to 18 per cent who said it was. The rest — 27 per cent — conceded there may be some areas of cleantech, such as solar or biofuels, that risk meltdown but feel that generally the cleantech sector is healthy and warrants the investment attention.

I think some kind of pullback is inevitable, and we’re already seeing a bit of it. But as the leaders in this sector begin to emerge and start showing profits those who made the right bets will win large. What’s encouraging is that money — large sums of money — are finally flowing to technologies that could truly help our planet/economy/society and in doing so create the next Microsofts and Ciscos of the world. Branson’s commitment may wow us because of its size, but what’s more important for me is that he’s just the latest high-profile business leader to throw his name and riches behind a cause and technologies that can benefit from his profile.

But let’s be absolutely clear: Branson’s $3 billion commitment is not a donation; it’s not charity. This is money he has set aside for investment that, presumably, is going to have a payback for him if he bets right. The Virgin Group, over time, may be faced with carbon taxes/caps that force it to look for emission-free energy alternatives, and like any company it can surely benefit by investing in technologies that make its operations more efficient. Fact is, I don’t want Branson giving a $3 billion handout, because you can’t battle something as massive as climate change on charity. It requires a change in the way we think, live and do business, and by pleding this massive investment Branson is deciding to influence change while making a sound business decision.

For another cleantech bubble perspective, check out this post on Cleantech Investing.

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