VIDEO: Is America Losing the Clean Energy Race?

The United States is quickly falling behind Asian rivals in the race to corner the burgeoning global clean energy market, according to a report released last week by the Breakthrough Institute and the Information Technology and Information Foundation.

The new report, "Rising Tigers, Sleeping Giant," is the first to thoroughly benchmark the clean energy competitiveness in four nations: China, Japan, South Korea and the United States. The report analyzes clean energy investments and policy support for research,, manufacturing, and domestic demand, with a particular focus on six key technologies: wind, solar, nuclear, carbon capture and storage, hybrid and electric vehicles and advanced batteries, and high speed rail.

At a briefing hosted by the Senate Committee on Energy and Natural Resources, Breakthrough Institute and ITIF outlined the key findings and their significance for U.S. energy and economic policy. The report's co-authors were joined by Congressmen Ron Klein (D-FL) and Rush Holt (D-NJ) who make remarks underscoring the critical role an effective clean energy economy strategy robust enough to counter Asian challengers will be to America's short-term recovery and long-term economic progress.

You can read an overview and download the report here and watch video of the briefing below (thanks to the folks at ITIF for the video):



EVENT DETAILS

Event: Is the U.S. Losing the Clean Tech Race?
Date: Wednesday, November 18, 2009
Time: 10:30 AM – 11:45 AM
Location: Senate Energy Committee Hearing Room 366, Dirksen Senate Office Building

Moderator and Presenter
Robert Atkinson (bio)
President, The Information Technology and Innovation Foundation

Presenter
Michael Shellenberger (bio)
President, The Breakthrough Institute

Jesse Jenkin (bio)
Director of Energy and Climate Policy, The Breakthrough Institute

Special Guests
Member of Congress Ron Klein (D-FL) (bio)

Member of Congress Rush Holt (D-NJ) (invited) (bio)

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Rising Tigers, Sleeping Giant - Overview

Asian Nations Set to Dominate Clean Energy Race by Out-Investing the United States - New Breakthrough Institute and the Information Technology and Innovation Institute report.

"Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate Clean Energy Race by Out-Investing the United States," a major new report released today by the Breakthrough Institute and the Information Technology and Innovation Foundation, is the first to comprehensively benchmark the competitiveness positions of the United States and key Asian challengers - China, Japan and South Korea - in the global clean energy race.

The new report examines the competitive position of each nation in core clean energy technologies, including solar, wind, and nuclear power, carbon capture and storage, advanced vehicles and batteries, and high-speed rail, as well as the government strategies each nation hopes will strengthen their position in the competitive global clean technology sector.

To view the full report, click here (pdf).
An abridged, summary version can be found here (pdf).

Core findings of "Rising Tigers, Sleeping Giant" include:

1. Asia's rising "clean technology tigers" - China, Japan, and South Korea - have already passed the United States in the production of virtually all clean energy technologies, and over the next five years, the government's of these nations will out-invest the United States three-to-one in these sectors. This public investment gap will allow these Asian nations to attract a significant share of private sector investments in clean energy technology, estimated to total in the trillions of dollars over the next decade. While some U.S. firms will benefit from the establishment of joint ventures overseas, the jobs, tax revenues, and other benefits of clean tech growth will overwhelmingly accrue to Asia's clean tech tigers.



2. Large, direct and sustained public investments will solidify the competitive advantage of China, Japan, and South Korea. Government investments in research and development, clean energy manufacturing capacity, the deployment of clean energy technologies, and the establishment of enabling infrastructure, will allow these Asian nations to capture economies of scale, learning-by-doing, and innovation advantages before the United States, where public investments are smaller, less direct, and less targeted.



3. Should the investment gap persist, the United States will import the overwhelming majority of clean energy technologies it deploys. Current U.S. energy and climate policies focus on stimulating domestic demand primarily through indirect demand-side incentives and regulations. Should these policies succeed in creating demand without providing robust support for U.S. clean energy technology manufacturing and innovation, the United States will rely on foreign-manufactured clean technology products. This could jeopardize America's economic recovery and its long-term competitiveness while making it even more difficult to reduce the U.S. trade deficit.



4. Proposed U.S. climate and energy legislation, as currently formulated, is not yet sufficient to close the clean tech investment gap. In contrast to more direct investments by Asia's clean tech tigers, current U.S. policies rely overwhelmingly on modest market incentives that are viewed by the private sector as more indirect, create more risks for private market investors, and do less to overcome the many barriers to clean energy adoption. The American Clean Energy and Security Act, passed by the U.S. House of Representative in June 2009, includes too few proactive policy initiatives and allocates relatively little funding to support research and development, commercialization and production of clean energy technologies within the United States. Including investments in clean energy R&D, demonstration, manufacturing and deployment in both U.S. economic recovery packages and the House-passed climate and energy bill, the United States is poised to invest $172 billion over the next five years, which compares to investments of $397 billion in China alone, a more than four-to-one ratio on a per-GDP basis.



5. If the United States hopes to compete for new clean energy industries it must close the widening gap between government investments in the United States and Asia's clean tech tigers and provide more robust support for U.S. clean tech research and innovation, manufacturing, and domestic market demand. Small, indirect and uncoordinated incentives are not sufficient to outcompete China, Japan, and South Korea. 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.

See also: "Asia Beats U.S. 3-1: Major New Report on US vs. Asian Competitiveness in Clean Energy Technology"

Media coverage of "Rising Tigers, Sleeping Giant"

• Financial Times: "Asia set to overtake US in green technology"


• Wall Street Journal, Environmental Capital: "Flying Tigers: More Reasons to Worry About Asia's Clean-Tech Push"


• New York Times, Green Inc: "Study: Asia Surging in Clean-Tech Manufacturing"


• E&E News, ClimateWire: "Report warns of 'Asian Tigers' surging ahead"


• Stanford Review: "Winning the Clean Energy Race: A New Strategy for American Leadership"


• SolveClimate.com: "Made in America by China: New Turbine Factory Offers Glimpse into the Future"

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Asia Beats U.S. 3-1: Major New Report on US vs. Asian Competitiveness in Clean Energy Technology

By Michael Shellenberger, originally at the Breakthrough Institute

Asia is poised to dominate the fast-growing clean energy industry by outspending the United States by at least three-to-one on infrastructure and technology, according to a new report, Rising Tigers, Sleeping Giant, which was released today by the Breakthrough Institute and Information Technology and Innovation Foundation at an event hosted by the Senate Energy & Natural Resources Committee.

The summary and full report, "Rising Tigers, Sleeping Giant: Asian Nations Set to Dominate the Clean Energy Race By Out-Investing the United States," can be downloaded here:

Full Report (pdf)
Summary Version (pdf)

The report comes at a time of rising anxieties in the U.S. about a jobless economic recovery, and new reports showing that over 85 percent of President Obama's economic stimulus clean tech grant program went to foreign firms. Recently Senator Chuck Schumer (D-NY) wrote to Department of Energy Secretary Steven Chu opposing a $1.5 billion Texas wind farm to be built with Chinese turbines. In response, China's A-Power Generation Systems wind manufacturer announced plans to open a factory in the U.S.

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

"Rising Tigers, Sleeping Giant" is the first report to comprehensively benchmark clean energy competitiveness and government investments in cleantech by China, Japan, South Korea, and the United States. These Asian governments will invest $519 billion in clean technology between 2009 and 2013, compared to $172 billion by the U.S. government. Climate and energy legislation, which passed the House 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 ten years on clean tech.

The direct, immediate, and coordinated nature of Asian government investments stands in contrast 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.

Indeed, the United States' traditional prowess in attracting venture capital and other private funding could soon be eclipsed by Asia. China and other Asian nations, the report concludes, are offering a better business and investment climate than the United States. And China's share of private sector clean tech 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.

Investment bank giant Deutsche Bank recently concluded that "generous and well-targeted [clean energy] incentives" in China and Japan will create a low-risk environment for investors and stimulate high levels of private investment in clean energy because those nations rely on a "comprehensive and integrated government plan, supported by strong incentives." In contrast, Deutsche Bank says, the United States is a "moderate-risk" country since it relies on "a more volatile market incentive approach and has suffered from a start-stop approach in some areas."

"While some U.S. firms will benefit from the establishment of joint ventures overseas," the report warns, "the jobs, tax revenues, and other benefits of clean tech growth will overwhelmingly accrue to Asian nations."

New pollution regulations, a national renewable energy standard, and efficiency regulations in the U.S. will not, the report finds, be sufficient to close the technology investment gap between the US and Asia. New climate pollution regulations will not be strict enough to send much private investment to clean technologies, and large infrastructure barriers such as the need for new transmission lines stand in the way of greatly expanding solar and wind.

"Small, indirect and uncoordinated incentives are not sufficient to outcompete Asia's clean tech 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."

Michael Shellenberger is the President and co-founder of the Breakthrough Institute and a co-author of "Rising Tigers, Sleeping Giant."

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South Korea to Invest $85b in Green New Deal

By Johanna Peace. Originally posted at Breakthrough Generation

This week, South Korea has upped the ante for green public investment as it continues to make swift progress toward becoming a clean-tech economy. Already, a staggering 80% of South Korea's $38 billion stimulus package has been earmarked for green investments.

And today, the South Korean government announced that it will invest $85 billion more over 5 years to encourage the growth of green industries and technologies. That's more than doubling South Korea's recent promise to invest $40 billion over five years in a "Green New Deal," and the equivalent of 2% of the East Asian nation's total GDP. If the United States were to invest a comparable share of it's national wealth in clean energy technology, the sum would total over $275 billion annually.

As part of the investment plan, South Korea will raise $1.6 billion from the private sector to help green industry, using a suite of financial supports and incentives. According to Reuters:

"From the public sector, the state-run Korea Development Bank (KDB) and state-run pension funds plan to set up a 500 billion won ($395 million) private equity fund in the second half of the year, officials said.

The KDB also aims to set up a 300 billion won ($237 million) fund for research and development (R&D) for the industries. The government will increase a fund for smaller firms in the industries to 1.1 trillion won ($868 million) by 2013 from a 60 billion won ($47 million) this year.

South Korea plans to raise fiscal support for R&D in the industries to 2.8 trillion won ($2.2 billion) by 2013 from 2.0 trillion won ($1.57 billion) this year.

The government will increase credit guarantee support for such companies and projects to 7.0 trillion won ($5.52 billion) by 2013 from 2.8 trillion won ($2.2 billion) this year and triple export financing.

On Thursday, the government said it would help launch a 5 trillion won ($3.95 billion) fund aimed at providing financial support for investments by companies as part of plans to encourage corporate spending."

By expanding R&D funding for technologies such as LEDs, solar batteries, and hybrid cars, South Korea aims to raise its international market share of clean tech products to 8%.

South Korea knows that investing in clean tech industries creates an unstoppable growth engine for broader economic prosperity. Yet the US, a self-proclaimed leader in the drive toward a carbon-free global economy, has invested a paltry 12% of its own stimulus package in creating a clean energy economy at home. Not to mention the feeble climate bill that just passed the House, which totally misses the opportunity to harness revenues from the sale of emission allowances and direct them toward green industry stimulus measures like South Korea's.

Until the US government makes clean energy investment a national priority, America will have no answer to the clean tech challenges coming from Asia's emerging green economies.

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