Ken Silverstein | Apr 17, 2013

China is getting accolades for its green energy policies that are attracting private investors. The Asian nation, in fact, is once again the global leader in terms of the amount of money it is raising from private interests.

The Pew Charitable Trusts and Bloomberg New Energy Finance, which makes such evaluations each year, say that China is raising capital to the tune of $65.1 billion in 2012. That’s money that is flowing into everything from hydro-electric dams to solar technologies to wind energy plants.

China, which has been criticized because because it so dependent on coal, has a goal of generating 15 percent of its power from green energy by 2020. That target will be 30 percent by 2050. It is also working to cut its energy consumption by using new conservation tools. Within 15 years, the country says that it must attract more than $200 billion.

How is it doing? About 20 percent better than 2011. At the same time, private investment in the United States’ green energy economy fell by 37 percent during that period. It is now about $35.6 billion here, making it the world’s second biggest market for such capital, Pew says. Germany placed third on the list and attracted $22.8 billion.

Globally, the grand total for all private investment aimed at green energy came to $269 billion, which is a decline of 11 percent from the year before. That fall, says Pew, is the result of sagging economies especially in Europe and the phase-out of some national incentive plans. Interestingly, the report says that renewable energy generation expanded by 16 percent mainly because of falling prices.

“For the second year in a row, solar technologies attracted more financing than any other technology by a wide margin: $126 billion was invested in the sub-sector in 2012, or 58 percent of the G20 total,” says Pew. “China, Europe, and the United States were top markets for solar investment.”

Pew’s position is that the United States is losing its international posture with respect to attracting green energy investing. It says that the lack of a government commitment is the main reason. That’s something to which free market thinkers disagree, emphasizing that all energy forms should be able to stand on their own and without government subsidies.

False Promises

Undoubtedly, sharp differences between the two parties and the divergent fuel interests will preclude the type of policies that Pew would like: The implementation of carbon caps and a national renewable portfolio standard, both of which Pew says would encourage investment in clean tech and green fuels.

Despite the uncertain economic and political climate, Pew says that green energy in the United States is proving itself. Its web site says that between 1998 and 2007, jobs in the clean energy economy grew by 9.1 percent. That’s compared to 3.7 percent for traditional jobs. The total: 68,200 businesses employed more than 770,000 people.

Meanwhile, the Brookings Institution, Breakthrough Institute and World Resources Institute have reported that renewable energy generation doubled from 2006 to 2011. They say that employment in the clean tech sector, which is broadly defined and includes such things as advanced electric car batteries, grew by 70,000 from 2007 to 2010. The concern that both the think tanks and Pew have is that the federal programs that have inspired that growth will soon expire.

Skeptics are okay with that, noting that Western European nations are the first to cut back on their renewable energy subsidies. Germany, Italy, Spain and Great Britain are weighing their desires to cut carbon dioxide emissions and promote energy growth with the reality of much tougher economic times.

To that end, conservative energy scholar Ken Green finds it odd that China is receiving such adoration for its clean energy pursuits. Two points: Its renewable energy sector there is heavily subsidized and has been criticized for undercutting American innovation. And, the country is building a coal plant every week.

Pew’s research “requires one to think green energy will provide a huge source for power generation in the future and that this energy will be less expensive than alternative sources,” says Green. “I don’t think that will be the case.”

Needless-to-say, the countries vying for international recognition that include not just China, Germany and the United States but also Italy, India and Brazil are creating national policies and economic incentives to drive more investment in this area. Like it or not, even governments that think of themselves as smaller and less invasive, have a tradition of partnering with promising private interests.

The extent of that federal role, though, is another matter. And that is the balance that policymakers around the globe are trying to find. 


EnergyBiz Insider has been awarded the Gold for Original Web Commentary presented by the American Society of Business Press Editors. The column is also the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has been honored as one of MIN’s Most Intriguing People in Media.

Twitter: @Ken_Silverstein

energybizinsider@energycentral.com

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