IS SOLAR power the next Google? Is ethanol the next Amazon.com? The money flowing into zero-carbon technologies is not confined to public projects such as the eco-suburb being built in London by Ken Livingstone.

All sorts of investors are turning their attention to climate change, including some of the smartest venture capitalists who made fortunes by backing dot-com successes in the early 1990s.

Last year venture capitalists put 25 per cent more into renewable energy than the year before. “Clean tech” is now the fifth largest home for venture capital investment in the US, running behind biotech, software, medical and telecoms. The sums are still relatively small, but the shift in direction is seismic.

Vinod Khosla, the co-founder of Sun Microsystems and an early backer of Amazon and Netscape, is investing millions of dollars in ethanol, which he believes is the fuel of the future. Mr Khosla says that oil is old hat and he is “thinking outside the barrel”.

Last month Richard Branson’s Virgin Group announced a £1.6 billion investment in renewable energy over ten years. And Climate Change Capital, a British investment banking group, announced that it had created the largest private-sector carbon fund in the world, raising $830 million in three months. The money will be invested in projects that reduce the emissions of carbon dioxide and other greenhouse gases.

This is not altruism: these are bets that it is hoped will make a good financial return.

Several factors are conspiring to make green action look potentially profitable. First, government regulation. European governments committed themselves to greenhouse gas emission reductions under the Kyoto Protocol in 1997 and are now participating in the EU’s emissions trading scheme, which aims to reduce progressively the amounts of pollution that companies in certain sectors can emit.

Many individual American states are doing something similar, despite the continued scepticism in the White House. These policies are reinforced by growing concern about energy security, as oil and gas reserves become concentrated in the hands of dictators and unpredictable regimes, and public concern about global warming.

As a result, more and more companies are finding that their desire to be socially responsible fits in with the interests of their shareholders. This September, 360 of the world’s top 500 companies have joined the Carbon Disclosure Project, under which they disclose their greenhouse gas emissions.

This is a gold-rush: not everyone will be a winner from the quest for the holy grail of lower emissions. But more and more are betting that where there are greenhouse gases, there’s brass.

Explore UK News

• Crime News

• Education News

• Health News

• Scotland News

Times Recommends

• A vicar’s wife: ‘There is no one to fight for us’
• Every little helps at the supermarket
• Ugg or Fitflop? The battle of the boots