China leading the Clean Energy Race – Check out the Facts
Posted March 25, 2010
“China is emerging as the world’s clean energy powerhouse…there are reasons to be concerned about the U.S. competitive position in the clean energy marketplace”. Those are findings from a new report compiled using data from Bloomberg New Energy Finance.
The report -- Who’s Winning the Clean Energy Race? Growth, Competition and Opportunity in the World’s Largest Economies – from the Pew Charitable Trusts is compiled by “the world’s leading provider of news, data and analysis on clean energy and carbon market finance and investment”, so this isn’t made up info – these are just the facts (from the report).
Overall clean energy investment grew by 230% from 2005-2009. In 2009, $162 billion was invested globally in clean energy such as wind, solar, energy efficiency, and biofuels. But that is just a drop in the bucket of the potential as my colleague has recently pointed out: there is a $13 trillion market over the next two decades that will materialize as the world moves towards solving global warming (and as he detailed here). In just 2010 alone, Bloomberg New Energy Finance estimates that a record $200 billion will be invested in clean energy globally.
China takes the lead, while the US slips. In 2009, China took the top spot in total clean energy investment with $34.6 billion – surging past the US (in second place) with $18.6 billion (as the LA Times reports). The US held the top spot for the last 5 years. In the last 5 years, the growth in clean energy investment in China and Brazil were each 148% (tied for 2nd behind Turkey), while the US was 103% (in 6th place, behind Turkey, China, Brazil, the UK, and Italy). And relative to the size of its economy, the US clean energy finance and investments lag behind many countries. For example, China’s clean energy investment is 0.39% of its gross domestic product (the 3rd largest), while the US is 0.13% of GDP (in 11th place).
There is a bright sign for the US which invested more of the economic recovery funding in clean energy ($67 billion) than China ($47 billion). And since two-thirds of this spending is expected in 2010-2011, the US can expect some surge as this money is deployed. But China isn’t standing by, as my colleague has noted China has recently renewed its commitment to renewable energy and improved its renewable policies.
US still has the largest renewable energy capacity, but just barely. In 2009, China was second in installed renewable energy capacity (52.5 GW), just behind the U.S. (53.4 GW). But over the past 5 years, the growth in the US has lagged behind other key players. South Korea led the pack over the last 5 years with a 249% growth, followed by China at a 79% increase. The US had the 8th fastest growth over the last 5 years, trailing South Korea, China, Australia, France, India, the UK, and Turkey.
Policies for clean energy matter. As the report finds:
“…nations such as China, Brazil, Germany and Spain that have adopted national renewable energy and energy efficiency standards, feed-in tariffs, carbon reduction targets and/or financial incentives for investment and production are assuming leadership positions in the clean energy sector.”
China, India, Brazil, South Korea, and Mexico have all signaled clear steps that they’ll take to curb their global warming pollution and deploy clean energy (as I’ve noted here). And many of these countries have been implementing policies to reduce their global warming pollution and deploy clean energy both before Copenhagen and after. As the report notes: “Ambitious, mandatory targets for wind and solar power and ample availability of credit in China have been the primary engines of that nation’s clean energy growth” (more detail from our China Program team available here on their renewable programs). And as a part of their commitment towards the Copenhagen Accord, which we envision they’ll inscribe in their next 5-year plan (the law of the land), they have committed to: reduce its carbon intensity by 40-45% by 2020 from 2005 levels and increase the share of non-fossil energy in its primary energy consumption to around 15% by 2020 (as we noted here). South Korea has committed to reduce emissions to 30 percent below projected levels by 2020 and has passed a national law to implement a cap-and-trade program (as noted here). India has committed to cut its emissions intensity by 20-25% by 2020 from 2005 levels and has announced both a “clean energy tax” on coal to create a national fund to support renewable energy projects and a “tax break” for imports on renewable energy equipment (as my colleague noted here).
So does the US throw-up its hands or does it do something to change the recent trend? Passing a comprehensive clean energy and climate bill in the US can put America first in the clean energy jobs race (as my colleague noted) – a $13 trillion race over the next two decades. As a result, the US has an opportunity to create 1.9 million new clean energy jobs by 2020 under a comprehensive clean energy and climate bill, but only if we act now. While at the same time we can cut US dependence on foreign oil by over 50% (as we noted here).
Time for the US to get seriously in the race for the clean energy economy and jobs of this century by passing a comprehensive clean energy and climate bill. We don’t have time to wait as the race is on (and while the US was fast out of the starting blocks it is lagging in the mid-course).
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