Vinod’s hybrids vs. biofuels argument

If you haven’t before seen or heard Vinod’s arguments in favor of biofuels and against hybrids, it’s well worth reading the three-part column he wrote in Grist earlier this month.  (Part I, Part II, Part III)

Three quick reactions:

1.  This is a very well-done argument which really points out the strengths of Vinod’s highly analytical, deep-dive investment style.

2.  It’s a bit strange that it’s set up as an argument about hybrids vs. biofuels, since as even Vinod notes (buried in the third part) these techs are probably complementary instead of competitive.  Flex-fuel hybrids, and hybrid diesels, are already being developed.  And while he rightly points to the emergence of more efficient internal combustion engines and lighter cars, these are also going to be very complementary with hybrids.  I’d be more interested in an analysis of future all-electric vehicles versus a biofueled serial hybrid with a nextgen ICE, and suspect there would be places for both in the market…

3.  It’s also a bit strange that it’s set up (per the title, “Pragmatists vs. Environmentalists”) to sound like he’s having a fight with environmentalists.  When in reality, reading the argument made, it really comes down to Vinod’s analysis of the market adoption timing of one tech versus another, and per point #2 that’s kind of moot anyway (we need all of the above, not one or the other)...  And in addition, Vinod points out that he is himself investing on both sides anyway.  I would hope that most readers would understand that there’s not really a schism between the environmental community and the cleantech investor community on nearly all issues, and that in fact there’s a lot of commonality and shared purpose.

Let’s hope this kind of eye-catching title doesn’t end up picking an unnecessary fight.

(for full disclosure, my firm also has investments that would support the development of markets for both hybrids and biofuels)

1/29 Update:  Astute readers have already pointed me to two other responses to Vinod’s argument, one at the always-helpful AltEnergyStocks site, and a more pointed reply by Joe Romm.  More to follow, I’m sure…