Resource scarcity center stage at Cleantech Forum India

The keynote at Cleantech Forum XXIV Delhi, which began today, was a call to arms for global and domestic clean technology investors and entrepreneurs.

By the year 2030, the Indian middle class is expected to swell to about 170 million people. This growth, coupled with increasing resource scarcity and significant growth in national consumption, is driving the need for strategic investment in a range of sectors, according to the opening speech of Cleantech Group Executive Chairman Nicholas Parker.

Areas for attention include smart infrastructure development, transportation and energy storage to match the huge projected increases in resource use.

With rising commodity costs, corporate margins are in jeopardy, according to Parker.

“For a typical company with a profitability of 10 percent, the impact of a 3.5 percent annual increase in the price of resource-dependent input could effectively eliminate all profits within a decade,” he said, quoting a Deloitte study.

India will see cleantech venture investments of $250 million for all of 2009 by the end of the year, a record high, according to latest Cleantech Group estimates. This compares it to the United States for venture capital investment in 2009, after adjustments for purchasing power parity.

Furthermore, the opportunity for new investment in India is significant, Parker said, given the that public infrastructure in India remains largely fragmented. And 80 percent of the India of 2030 is yet to be built, said Parker, quoting a recently completed McKinsey India cost curve report.

India, for its part, is more vulnerable to the impacts of climate change, magnifying the need for stable regulations and clear carbon pricing mechanisms, Parker said.

The key to development, Parker noted, is to capitalize on “marrying innovation with infrastructure” in a way that leverages public private partnerships, creates the right mix of fiscal incentives and maximizes sustainable job creation. Trends in the United States indicate that current public investment in this sector has trumped total private investment in clean technology over the past four years.

Indeed, to address the challenge of resource scarcity and growing consumption, it will be necessary to look at growth that is clean, smart and decentralized, Parker said.

Cleantech Forum XXIV Delhi has convened hundreds of local and international investors, entrepreneurs, policy makers and service providers to forge solutions to clean technology challenges in India.

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