Clean Energy: Why Is China Ahead of the U.S.?

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Clean Energy Sector to Reach $200 Billion in 2010

Since 2005, investments in the clean energy sector have grown 230 percent, according to the Pew Environment Group Climate and Energy Program. In 2009, $162 billion was invested in clean energy globally and analysts forecast that investments will climb 25 percent to $200 billion in 2010.

But despite the opportunities in the fast-growing industry, experts say the United States continues to lag behind countries such as China, Brazil, the United Kingdom, Germany and Spain.

"The U.S. is missing the boat," said Phyllis Cuttino, director of the Pew Environment Group Climate and Energy Program in Washington. In 2009, she said, China attracted $34.6 billion in clean energy investments, more than any other country. The United States attracted $18.6 billion, about half of China's total, she said.

When you look at the winners in this race, Cuttino said, they all have one key feature in common: a national clean energy policy.

The countries dominating the clean energy landscape have national policies to reduce global warming pollution and provide incentives for companies to use renewable energy, such as solar and wind power, but she said the United States only had a "patchwork" of state policies.

State Development Agencies Promote Small Clean Energy Start-Ups

"We have a well-educated [population], a manufacturing base," she said. "We basically have all of the necessary ingredients to capitalize on a clean energy policy, but we need a policy."

The Ohio Department of Development's Patt-McDaniel said that with investments ranging from $50,000 to as much as $1 million, the Ohio Third Frontier program funds clean energy, biomedical, polymer and other high-tech projects to help them eventually commercialize and create jobs.

"Our partner organizations at the local level ... take these kinds of entrepreneurial companies and match them to potential partner investors," she said. She said development officials could also help small companies find production partners that could take the venture to the next level.

Real Progress Needs Federal Action, Experts Say

But though state development agencies across the country may support small business following Obama's mandate to develop clean energy, experts say real progress will only come from federal action.

"The clean technology sector is the fastest growing business sector in the global economy and the U.S. cannot afford to lose our competitive edge with China and other countries when it comes to the fastest growing sector in the global economy," said Howard Learner, president and executive director of the Environmental Law & Policy Center in Chicago.

While one small business doesn't necessarily prove a trend, he said the bottom line is that the United States is running the risk of missing out on the next economic driver.

"Clean energy and climate legislation before Congress would put us on the right track, but it's been mired in both Republican political opposition and opposition from old economy industries," he said.

Obama's decision to enact a series of renewable energy tax credits in 2009 was a good start, he said, but they all expire by the end of this year and should be extended.

He also said that while 30 states have renewable energy standards requiring utilities to purchase an increased percentage of power from renewable sources, Learner, like Pew's Cuttino, said a national standard is critical.

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