Healthy competition

This post was originally featured on the Zayed Future Energy Prize blog.

There has been much-hyped talk about the massive growth of the Chinese economy in recent years and how it’s poised to overtake the world’s current largest economy, the United States. Nowhere is that talk at a higher pitch than in the clean energy arena, as a report released earlier this year by the United Nations Environment Programme (UNEP) demonstrated that China, with $49.8 billion in total annual renewable energy investment in 2010, overtook the United States to become the leading destination in the world for renewable energy investment. In fact, during 2010, for the first time total investment in clean energy was greater in the developing world ($72.2 billion) than in the developed world ($70.5 billion). 

One of the extraordinary aspects of China’s (and to a lesser extent other non-Western nations’) ascension to the lead in renewable energy investment is that it occurred despite the fact that such investment in the U.S. was at an all-time high in 2010 (aided by the Obama stimulus plan). Renewable energy investment in the United States in 2010 totaled $29.6 billion and represented 56 percent growth over 2009. 

Is this West-to-East/developed-to-developing country passing of the clean energy “baton” a fluke or a new paradigm shift in the global landscape for clean tech capital flow and technology deployment? The climate, of course, doesn’t care – emissions reductions matter the same wherever they are made. The climate would benefit from a cold-war style arms race for the lead in the development and deployment of clean technologies.

The U.S. and other Western countries should care, however. Putting aside any environmental concerns, we in the West should have our competitive juices flowing, since we like to be “number one” in just about anything we can. We should want to lead the world in innovation, manufacturing, and in clean energy deployment. China is on its way to leadership in the latter two categories and it is likely solely within their control as to whether they succeed on a sustained basis – they have proven cost advantages in manufacturing and they have the largest single market for energy services. I suspect they aim also to be the leader in clean technology innovation – a title that still rests largely in the developed world.

In the U.S., we should not relinquish our claim to leadership in any of these areas easily. Innovation, manufacturing and deployment of clean energy are things we need more of here at home regardless of any competitive juices that lead us to want to be “number one.” Clean technology creates jobs, builds new and lasting skills in our workforce, cleans our air, and balances our trade deficits. “Winning” a clean tech “arms race” should be a national priority - regardless of what you call it - for a number of different reasons.