America Risks Missing Out in Clean Technology

BusinessWeek (Atkinson) - Asia's 'Clean-Tech Tigers' are out-investing the U.S. in renewable power and energy efficiency. Global private investment in renewable energy and energy-efficient technologies is estimated to reach $450 billion in 2012 and $600 billion in 2020. These are hefty numbers, and attracting even a modest share of that investment will produce hundreds of thousands of jobs.

Yet these hopes are likely to remain unfilled unless the U.S. embarks on a very different course. A joint study by the Information Technology & Innovation Foundation, which I direct, and the Breakthrough Institute finds that Asia's rising "clean-technology tigers"—China, Japan, and South Korea—have already passed the U.S. in the production of virtually all clean-energy technologies. The report, Rising Tigers, Sleeping Giant, also finds that between 2009 and 2013, the governments of these nations will out-invest the U.S. three-to-one in these sectors­, or $509 billion to $172 billion.

Inadequate legislation

Proposed U.S. climate and energy legislation, as currently formulated, unfortunately won't close the clean-tech investment gap. For instance, the American Clean Energy & Security Act, passed by the U.S. House of Representatives in 2009, includes too few proactive policy initiatives and allocates relatively little funding to support R&D, commercialization and production of clean-energy technologies. It would be better, both for the economy and the environment, to set a lower "price" on carbon but devote a larger share to green innovation.

If the U.S. hopes to compete for new clean-energy industries, it must close the widening gap between public investments and provide more robust support for U.S. clean-tech research and innovation, manufacturing, and domestic market demand. Small, indirect, and uncoordinated incentives won't be enough to out-do China, Japan, and South Korea. To achieve economic leadership in the global clean-energy industry and gain the jobs associated with them, U.S. energy policy must include large, direct, and coordinated investments in clean-technology R&D, manufacturing, deployment, and infrastructure.