China overtakes US in green investment: study

Shaun Tandon (AFP) Google News 25 Mar 10;

WASHINGTON — China has surpassed the United States as the top investor in clean energy with the rising Asian power becoming a "powerhouse" in the emerging field, a study by environmentalists said.

The report said that China has shown determination to be on the frontline of green technology, while US investors have been put off by uncertainties amid the legislative battle on climate change.

Chinese investment in clean energy soared by more than 50 percent in 2009 to reach 34.6 billion dollars, far more than any other country in the Group of 20 major economies, the study led by the Pew Charitable Trusts said.

Total US investment was about half that at 18.6 billion dollars, the first time in five years that the world's largest economy lost the top spot in clean energy, the study said.

"China is emerging as the world's clean energy powerhouse," Phyllis Cuttino, global warming campaign director of the Pew Environment Group, told reporters on a conference call.

"This represents a dramatic growth when you consider that just five years ago their investment totaled 2.5 billion dollars," she said.

China has also overtaken the United States as the top emitter of carbon blamed for global warming and came under fire for its role in December's much-criticized UN climate summit in Copenhagen.

But the study found that China had made a strategic decision to invest in wind and solar technologies as it copes with sharply rising demand for energy -- and has set some of the world's most ambitious targets on renewable energy.

The study also found strong investment by Britain, which ranked third with 11.2 billion dollars for clean energy; Spain, which came in first in green investment when taken as percentage of gross domestic product, and Germany.

Nations seen as struggling in the clean energy competition include the United States, Australia and Japan, the study said. Cuttino said the three nations have "less consistent, clear and long-term policies in place."

US President Barack Obama, Australian Prime Minister Kevin Rudd and Japanese Prime Minister Yukio Hatoyama have all championed climate action but none of the countries have set in motion nationwide plans to curb emissions.

But the study noted that Australia had potential in wind energy and said Japan was "one of the G-20's most promising growth markets" if the resource-poor nation carries out plans to ramp up solar and wind power.

The study found that even though the United States dominates technological innovation, its investment in clean energy tumbled 42 percent last year from 2008 levels.

The researchers partly blamed the global economic slowdown but also said there was a lack of direction. Climate legislation has been stalled in the Senate, although Obama allies have vowed to push it ahead now that Congress has completed the top priority of expanding health care.

John Woolard, chief executive officer of California-based solar plant builder BrightSource Energy Inc., said that the government needed to take action to create markets.

"We have never had certainty or predictability in the United States," Woolard said. "We have not had a thoughtful and coherent energy policy in this country for decades."

Obama and his congressional allies argue that curbing emissions will open up a new green economy, helping fuel the economic recovery.

Many Republican leaders are skeptical, saying that restrictions on carbon would only worsen a fragile economy.