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The questions of why green and why now demand a bit of analysis in relation to market history.  It is not a stretch to begin the analysis with a brief discussion of investment bubbles throughout financial history.  Many market historians make reference to the East India “Tea” Company and the first study of market bubbles in relation to the British Company undercutting local merchants using tax-exempt status to gain an international monopoly on trade primarily in Tea beginning in the 1600’s.  Without wasting time posing arguments based on our opinion concerning corporate greed, it is instead interesting to view the notion of tax incentive advantages related to competition in the Green Sector.  We venture that the next market “Bubble” may well find its foundation in the “Green Sector.”  Similar to the .COM Bubble, the technologies being created in the “Green Sector” are definitely useful innovations that seemingly benefit the environment.  Unlike the meritless Real Estate Bubble consisting of increasing home values with no technological advancements in building materials or technology, a potential “Green Bubble” is framed by revolutionary technological developments.  I shudder at our use of the word Revolutionary as it is the harbinger of doom for any Bubble, but the supporting technology seems present and the second necessary component of a Bubble mass media attention is clearly visible on the financial newswires. 

We will return to the analysis of the potential for a Green Bubble.  Additionally we will review the .COM Bubble and the Real Estate Bubble in an attempt to identify if there are underlying patterns that can be applied to investing models in the “Green Sector.” 

Though Green technology has been around for some time, the more recent international attention focused on the sector is evolving as it is driven by an ever increasing number of treaties, protocols and summits.  There are a number of major environmental concerns that primarily seem to be driving much of the legislation and subsequent innovations in the Green Sector.  Sustainability has become a word that is used daily in the “Green Sector.”  Though a specific definition of sustainability may be elusive, the general application of the word focuses on creating lasting solutions that leave the smallest “Footprint” in whatever environmental sector it pertains to.  The “Carbon Footprint” is becoming an increasing flashpoint in the sector.  The burning of fossil fuels produces carbon and other emissions destructive to the Earth’s atmosphere.  Though there are a number of opinions as to whether these emissions truly cause “Global Warming” (or man-bear-pig syndrome as Al Gore and South Park fans might identify with), it is scientific fact that these emissions are damaging to the environment.  Subsequently, the Kyoto Protocol is a commitment by 37 industrial nations to reduce “Green House Gas” emissions over the period 2008-2012.  Power plants burning coal and automobiles are at the forefront of the Kyoto Protocol’s agenda.  The UN masterminded including the Kyoto Protocol and additional protocols are resulting from an ever increasing number of treaties.