Green Energy-Green Business: New Financial and Policy Instruments for Sustainable Growth in the EU
capital. The creation of an attractive investment climate will, therefore, be crucial for the future competitiveness of the European eco-industry.52 Unlike the European eco-industry, economic considerations in the eco-industries of the US and Japan have played a more important role and public funds primarily serve to finance investment proposals. Especially in the US, private investments and venture capitalists are showing growing interest and readiness to invest in the eco-industry. In Japan, too, institutional investors, financial institutions and numerous third-party organisations have been increasingly cooperating to develop capital markets for the country’s green industry. According to Ernst and Young, the total US and EU venture capital in clean technologies was almost $3 billion in 2007. No less than 80% of this amount was invested in the US. Although these investments account for a small share of total venture capital investments (5.4% of total US venture capital investments and 4.4% of EU venture capital investments), one should take into account that this share is increasing. From a European point of view, moreover, it should be observed that in the US energy and infrastructure projects have access to debt capital. Developers there make extensive use of investments from institutional market participants (investment trusts, insurance companies, retirement and pension funds, hedge funds etc.), whereas the depth of the European institutional market is relatively shallow. In Europe, the banking sector has been the main financer of debt.53 52 ECOFYS, Financing Renewable Energy in European Markets (Utrecht, 2011), accessed at http://ec.europa.eu/energy/renewables/studies/doc/renewables/2011_financing_ renewable.pdf on 10 January 2012. 53 Ernst & Young, Comparative Advantage and Green Business (London, 2008), accessed at http://webarchive.nationalarchives.gov.uk/+/http://www.bis.gov.uk/files/file46793.pdf on 10 January 2012.
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