As green power investments rise, a fear they are being misguided

PARIS: Long considered marginal and even quixotic, energy from sources like the wind, sun and plants is turning into one of the world’s most highly valued industries. And while power generated by “green” sources remains tiny compared with fossil fuels, the sector has begun to attract the attention of big-league investors seeking to profit from a new wave of growth in alternative energy.

But even as the amount of cash swells, environmental officials warn that financing is flowing to projects that may be doomed to failure.

Once-trendy biofuels like ethanol produced from corn are now being derided by the authorities, who say the fuels have little value in the fight against global warming. Vital components for windmills and solar cells have run short over the past year, requiring expensive projects to a halt. Meanwhile, subsidies for renewable energy remain at the whim of politicians, creating a boom and bust cycle for wind farms and solar projects, particularly in the United States.

Such a risky environment means some bankers are placing bets on projects that are unlikely to develop into serious, profitable alternates to fossil fuels, and could ultimately slow investment flows

“Some of these green investments are going in the wrong direction,” said Yvo de Boer, the executive secretary of the United Nations Framework Convention on Climate Change. “Very well-intentioned projects can go awry, particularly where government policies on cutting emissions aren’t clear.”

IHT