Report: Asia Could Outpace U.S. in Clean Energy Sector

Nov 21 2009 | 7:44am ET

Asian countries are poised to outspend the United States on clean energy infrastructure and technology by a factor of three-to-one through 2013, says a new report from the Breakthrough Institute and Information Technology and Innovation Foundation.

Rising Tigers, Sleeping Giant says the governments of China, Japan and South Korea will invest $519 billion in clean technology between 2009 and 2013, compared to $172 billion by the U.S. government. Climate and energy legislation, passed in the United States in June, would contribute $28.7 billion of the $172 billion five-year total. China alone will spend $440 billion to $660 billion over the next 10 years on cleantech.

The report points out that 85% of U.S. President Barack Obama's economic stimulus cleantech grants went to foreign firms.

“Should the investment gap persist,” the report warns, “the United States will import the overwhelming majority of clean energy technologies it deploys.”

The report contrasts what it characterizes as the “direct, immediate and coordinated” nature of Asian government cleantech investments to the “sporadic regulatory approach” pursed in the United States. The report suggests that government investments will allow Asian nations to create innovation “clusters” of manufacturers, universities, R&D labs, suppliers and other firms, much as the Pentagon helped create Silicon Valley in the fifties and sixties. These clusters will be attractive to U.S. firms, the report argues, which are already making large investments in China.

Moreover, the report concludes that China and other Asian nations are offering a better business and investment climate than the United States, and that China’s share of private sector cleantech funding is growing rapidly. Between 2000 and 2008, the United States attracted $52 billion in private capital for renewable energy technologies, but China alone attracted $41 billion. China secured more private investment in renewables and efficiency technologies than the U.S. for the first time in 2008.

“Small, indirect and uncoordinated incentives are not sufficient to outcompete Asia’s cleantech tigers,” the report says. “To regain economic leadership in the global clean energy industry, U.S. energy policy must include large, direct and coordinated investments in clean technology R&D, manufacturing, deployment and infrastructure.”

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