The Pew Charitable Trust’s fourth annual report on “Who’s Winning the Clean Energy Race?” doesn’t give the United States much to celebrate on this Earth Day. The report, released last week, finds that the United States is no longer the global leader in renewable energy investment. China is.
From 2011 to 2012, China attracted $65.1 billion of the $269 billion globally invested in renewable energy investment. That compares to $35.6 billion by the United States, which is a 37 percent decline from 2011.
Pew found that globally investments in the renewable energy sector were down 11 percent from their 2011 figures, and that more than 50 percent of all investments were in countries not in the G-20, the set of leading industrial countries. China was the only G-20 country to have a net increase in attracting investors to its renewable energy sector in 2012. Luckily, the renewable energy sector still managed to grow by 88 gigawatts, or 11 percent, globally.
Pew said investments in wind energy were down 14 percent but solar still remained strong. “For the second year in a row, solar technologies attracted more financing than any other technology by a wide margin: $126 billion was invested in the sub-sector in 2012, or 58 percent of the G-20 total,” it said. “China, Europe, and the United States were top markets for solar investment.”
The U.S. loss is no surprise, as policy makers have begun to curtail incentive programs and pursue discredited austerity tactics. Meanwhile, China’s size, commitment and aggressive policies enable it to become the clear leader in clean energy. “In countries with strong policy, they’re successful in attracting investment,” Phyllis Cuttino, director of Pew’s clean energy work, said. In the U.S., “we need more than a patchwork of state policies.”
The on-again-off-again nature of federal clean energy programs such as the wind production tax credit, which was barely kept on the books for one more year during the fiscal cliff negotiations at the beginning of the year, contributed to the U.S. losing its clean energy lead. “This is largely due to policy uncertainty,” said Cuttino. “We have no clean energy standard and while there are tax incentives on the books for oil and gas, there are none for clean energy. That makes investors a little nervous.”
The report comes at a particularly hard time for the U.S., as the economy fails to grow and millions still suffer from unemployment. According to Cuttino, the decline in investments is a double whammy because it threatens our advantage as innovators. “This is a sector of the global economy that we’ve traditionally led,” Cuttino said. “We have invented many of the clean energy technologies, so to see China come along and the United States fall back is very troubling.”
On the bright side, the U.S. led the G-20 in energy efficiency, investing $2.5 billion in 2012. President Obama’s latest budget proposal intends to hold this advantage by allocating $200 million for efficiency programs. We are not out of the clean energy race yet.
We need to Increase our public and private investments in green technologies, fix our crumbling infrastructure and create other types of green jobs to return to global green leadership. Enacting policies that would simultaneously heal our broken economy and our climate would give the U.S. a real reason to celebrate the next Earth Day.