For established businesses, when they want to expand they often go where the money is. In the venture capital business, the investors go where they think the money is going to be sometime in the future. Most people became aware of VCs in the nineties when they started pouring billions of dollars into internet startup companies in the hope that some of them would succeed and give them huge returns on their investments. Most of these companies failed but some made it huge, like Amazon, Google, Yahoo and so many others. In the last few years many VC firms have been setting up new funds specifically to invest in a new area, alternative fuels and transportation. Last year VCs invested at least $727 million in alternative energy companies.
Governments have a lot of issues to deal with on a daily basis, and as we all know, "The squeaky wheel gets the grease." In order to get Congress to do things, you have to squeak, and the most effective way to do that is to pay someone to lobby members of congress for you. The reason corn ethanol is so "popular" these days is because big agri-businesses like Archer-Daniels Midland spends a lot of money on lobbyists. So now the venture capital companies are following suit and signing up lobbying firms to help them get legislation passed that benefit the businesses they are investing in. One example is the recent California greenhouse gas bill. Of course the oil industry is fighting back saying that the new ventures are looking for handouts because the new technologies are not realistic alternatives to petroleum. However, without the direct and indirect subsidies that the oil industry gets, they certainly wouldn't be so far ahead either.

[Source: New York Times (reg. required) via]

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