Clean energy investment in the U.S. climbed 51 percent, but the country still fell to third place among G20 members just a year after China toppled the U.S. as the global clean energy superpower. The fact that Germany, a country with a population that’s almost four times smaller than the U.S. invested more in clean energy than the United States in 2010 is alarming, and it needs to change soon.
While I am, for the most part, an advocate of free markets, I don’t believe energy policies should be set by private corporations. The United States government needs to take an aggressive role in securing a steady supply of energy for the country in the years to come. There is no economic growth without an affordable and uninterrupted supply of power.
And it’s increasingly looking like affordable power is a thing of the past even as the U.S. falls behind foreign countries in investing in renewable energy sources. Germany toppled the United States to become the second-largest investor in renewable energy in 2010 according to new research from The Pew Charitable Trusts. Both Germany and the U.S. lagged China, where the market for renewable energy hit record levels of $54.4 billion. Germany invested $41.2 billion in green energy and the United States fell to third, investing $34 billion in solar, wind, biofuels and other sources of renewable energy.
“The clean energy sector is emerging as one of the most dynamic and competitive in the world, witnessing 630 percent growth in finance and investments since 2004,” says Phyllis Cuttino, director of Pew’s Clean Energy Program.
Cuttino credits foreign governments with spurring spending in alternative energy industries. “Countries like China, Germany and India were attractive to financers because they have national policies that support renewable energy standards, carbon reduction targets and/or incentives for investment and production and that create long-term certainty for investors,” she says.
The Trust warns that global energy demands are expected to grow by 35 percent over the next 25 years, and that could lead to significant geopolitical instability as oil supplies peak and nuclear power gets put on the back burner in the wake of the 9.0 Tōhoku earthquake that struck Japan on March 11.
Globally, governments and investors around the world poured $243 billion worth of finance and investment into green technology in 2010. That was up more than 30 percent from 2009. The fact that Germany, a country with a population that’s almost four times smaller than the U.S. invested more in clean energy than the United States in 2010 is alarming.
The Chinese and German economies are moving toward energy independence – a fact that will insulate their jobs and growth in the event of an oil shock or major disruptive events in the Middle East. Investments in small-scale solar installations in Germany and Italy grew by 100 percent last year. Meanwhile, clean energy investment in the U.S. climbed 51 percent, but the country still fell to third place among G20 members just a year after China toppled the U.S. as the global clean energy superpower.
“With aggressive clean energy targets and clear ambition to dominate clean energy manufacturing and power generation, China is rapidly moving ahead of the rest of the world,” according to the Pew report. “In 2010, it accounted for almost 50 percent of all manufacturing of solar modules and wind turbines.”
The U.S. needs to get aggressive to ensure the country’s economy isn’t at the whim of the price of a barrel of oil or train car full of coal. In 2009, renewable energy sources contributed just 8 percent of U.S. energy consumption. Petroleum, on the other hand, accounted for 37 percent of the country’s energy needs and coal chipped in 21 percent, according to the United States Energy Information Administration.
“The barriers to a 100 percent conversion to wind, water and solar power worldwide are primarily social and political, not technological or even economic,” scientists Mark Z. Jacobson of Stanford University and Mark A. Delucchi of the University of California, Davis, wrote in 2009.
It’s time to pull our heads out of the sand and get serious about the government’s role: ensuring we have the energy to keep our economy from collapsing. That might mean stamping out lawsuits that bog down the construction of solar arrays and wind turbines. It might mean taxing gas consumption and offering tax incentives for adopting renewable energy. It probably means all of the above, but as the turmoil in the Middle East and the disaster in Japan have shown us, we have little choice but to recognize the rules have changed. We need to adapt to stay in the game.