March 29, 2011
If there was any doubt about the impact of renewable energy on the global economy, a new report by the Pew Charitable Trusts titled “Who’s Winning the Clean Energy Race: G-20 Investment Powering Forward,” may have put any such notion to rest. Phyllis Cuttino, director of Pew’s Clean Energy Program spoke with Biorefining Magazine prior to the official release of the report explaining that, based on the report, “You can really tell that some countries are making serious commitments and we can tell that they are going to reap the rewards.” In total, the G-20 nations included in the report invested $243 billion in 2010, an increase of 30 percent over the previous year. Since 2004, investments are up an astounding 630 percent, a number Cuttino calls “pretty remarkable.”
Even as the numbers truly indicate that the clean energy sector offers huge potential as an emerging market, the report reveals a number of other important points. “The big news this year is that the U.S. has now been displaced from second place to third place,” Cuttino said. Germany is now in second place. “Their investments are up 100 percent. They attracted $41.2 billion in overall finance and investment,” she explained, compared to the 50 percent growth the U.S. saw in 2010 to reach $34 billion. Followed by the first three nations, China, Germany and the U.S., the top ten also includes Italy in fourth, followed by the rest of the EU-27 in fifth, Brazil at sixth, Canada in seventh, Spain in eighth, France at ninth and rounding out the top ten, a new nation that will also see significant growth according to Cuttino, India.
The report ranked the countries based on the categories of asset financing, public markets and venture capital or private equity financing. For venture capital, an area up 26 percent over last year at $8.1 billion for 2010, the U.S. is leading the way. “Those investments are in innovation,” she said.
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For the second year in a row the report revealed that of all things impacting a country’s ability to benefit from renewable energy creation, none are greater than policy. “If a state or country has a strong or ambitious renewable goal, then investment is going to flood into the country.” It couldn’t be starker than in the example of the United Kingdom she said. Last year, the U.K. was fourth and attracted $11 billion, but for this year’s report the U.K. has dropped all the way to thirteenth, due largely Cuttino said, because of a new coalition that created a lot of uncertainty.
Cuttino said that although Pew works to deliver the report to every congressional office in Washington D.C., holds briefings on the findings and continues to educate on the findings of the report, she is worried that the U.S. competitive position in the clean energy race “has been significantly eroded,” based on similar policy inconsistencies covering the renewable landscape.
Sometimes Cuttino also said, there is a pattern of thought that says China has been so aggressive in growth based on the countries low wages and lack of a robust environmental regulation policy compared to the U.S., but she points out, that is not the case in Germany where they have highly skilled, well paid workers. “Low wages might be part of the story, but certainly not the entire story,” she explained, adding, “It’s not just about labor cost, it’s really about policy and creating internal demand.”
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While wind and solar are leading globally, countries like the U.S. are leading in biofuel production. And, although biofuels investment has seen a decline over the past few years, something Cuttino attributes to an over-supply of first generation biofuel in accordance with the federal mandate, second and third generation biofuels will help to spur new investment.
Overall, the report shows a “huge sector with unbelievable opportunity to create jobs,” she said.
To view the full report, visit: www.PewEnvironment.org/CleanEnergy