Washington: China overtook the United States for the first time last year in the race to invest in wind, solar and other sources of clean energy, according to a comprehensive new report that raises questions about American competitiveness in a booming global market.
US clean energy investments hit $18.6 billion (Dh68.32 billion) last year, a report from the Pew Charitable Trusts said, a little more than half the Chinese total of $34.6 billion. Five years ago, China's investments in clean energy totalled just $2.5 billion. The United States also slipped behind 10 other countries, including Canada and Mexico, in clean energy investments as a share of the national economy.
Although part of the US investment decline last year can be attributed to the deep recession, the Pew report pointed to another factor constraining US competitiveness: a lack of national mandates for renewable energy production or a surcharge on greenhouse gas emissions that would make fossil fuels more expensive.
The report warned that the current US approach, in which states make varied efforts and the federal government's efforts have been sporadic, has produced a "comparatively weak clean energy economy" — and that the nation risks losing out on economic growth and job creation.
"It's certainly the case that the countries and areas with higher investment in clean energy will be able to produce more jobs," said Chris Lafakis, an economist at Moody's Economy.com, which is working with Pew in tracking the green economy and jobs. Lafakis said investment was the No 1 factor in green job growth.
Worldwide, the report found clean energy investment more than doubling since 2005.
The study tallied public and private spending for clean energy equipment and generating capacity as well as venture capital funding of companies involved in green industries and related areas. The figures are derived from a Bloomberg New Energy Finance database and do not include investments in basic research and development in clean energy.
Nowhere is the competition as strong as in China, with its globally dominant manufacturing base and wide-ranging government policies promoting clean energy technology. That reality has drawn significant American corporate investment in China.
Applied Materials, the Silicon Valley equipment maker for industries including semiconductor firms, last fall opened a huge solar research and development centre in the western Chinese city of Xian. Mark Pinto, the company's chief technology officer who recently relocated to Beijing, said China's fast-growing solar energy market was the main draw.
China's advantages include hard-to-beat government incentives such as low-interest loans and subsidised land, but also a clear policy and strong demand from state-owned utilities that control energy capacity.
