Out of
the running?
By KATE GORDON, JULIAN L. WONG and JT MCLAIN
SOLAR TODAY®
JUNE 2010
VOL. 24, NO. 5
China, Germany and Spain are early winners in
the next great technological and industrial revolution.
The United States, which has yet to embrace a growth
strategy for the low-carbon future, is not.
By 2020, renewable energy and efficiency will represent one of the world’s biggest industries, totaling as much as $2.3 trillion. Over the past year, several countries made
huge investments to seize the economic opportunity provided by the shift to renewable, low-waste electricity and fuel. These investments
were a result of intentional public policies, which
in turn stimulated investment in new renewable
energy and efficiency markets, infrastructure and
human resources.
China, a country that in some ways is only
now experiencing an industrial revolution, has
made a serious commitment to building that revolution with low-carbon, low-waste technologies
and infrastructure. Several European Union (EU)
countries — notably Germany and Spain — have
also turned from old energy policies to embrace
the new. These three countries understand that
the transformation to a low-carbon economy
brings strategic benefits, from climate stability
to energy security to economic prosperity.
These countries are moving forward decisively. The United States came in second, just behind
Germany, in absolute sales in a recent global
country ranking of 2008 renewable energy and
efficiency technology product sales. But when
product sales were expressed as a proportion of
respective gross domestic product, the United
States was far down the list at 19th, compared
to Germany at third, Spain at fourth and China
at sixth. The United States also lags on installed
renewable energy (RE) per capita as well as per
unit of gross domestic product (see Figure 1,
page 27).
These countries invested in renewable energy
and efficiency for short-term benefits and laid a
foundation for economic growth by setting a
price on carbon, implementing strong national
energy performance standards or both. A 2009
study by the CERNA Research Program on
Technology Transfer and Climate Change found
that developed countries that ratified the Kyoto
Protocol saw a rise of more than 33 percent in
green-tech innovation patents (see Figure 2, page
29). Developed nations that didn’t initially ratify
Kyoto — the United States and Australia — saw
no noticeable change in their share of green-tech
patents over the same time period.
China, as a developing country, was not obligated to adopt emission-reductions targets under
the Kyoto Protocol, but it did embrace the treaty’s clean development mechanism (CDM). The
CDM allows developed countries to offset their
emissions by investing in renewable energy and
efficiency projects in developing countries, and
China greatly benefitted from the resulting technology transfer, particularly in its wind industry.
The Center for American Progress (CAP)
has identified the need for a long-term, comprehensive approach to renewable energy policy
that includes three policy pillars: expanding
markets and driving demand; financing, for
investing across the full value chain of renewable
energy and efficiency solutions; and revitalizing
and reinvesting in the physical and human capital infrastructure.
Germany, Spain and China have taken just
such an approach to the emerging new energy
economy (see table on page 26). Here, we exam-
Kate Gordon ( kgordon@americanprogress.org) is
the vice president for Energy Policy at the Center for
American Progress (CAP). Julian L. Wong (jwong@
americanprogress.org) is a senior policy analyst with
the Energy Opportunity team at CAP. JT McLain
( jmclain@americanprogress.org) is a contributing
author for the Energy Opportunity team at CAP. This
article is adapted from their March report, “Out of the
Running? How Germany, Spain, and China Are Seizing
the Energy Opportunity and Why the United States
Risks Getting Left Behind.” Access the full report
at americanprogress.org/issues/2010/03/out_of_
running.html.
ine how these policies and programs are creating
jobs, boosting industries and spurring innovation in the three countries.
Our purpose here is not to provide an exhaustive survey of the renewable energy policies of
these countries. Rather, it is to show how they
have become top competitors in the emerging
global renewables market by adopting a strategic
policy approach — and to demonstrate what is
at stake for the United States if we fail to learn
from their example.
Germany: an re industrial power
Germany, the world’s fifth-largest economy,
is a key player in the global new energy arena. The
country has a large industrial sector that makes
up 30 percent of its GDP. It has emerged as a
leader in wind and solar production because of
this industrial infrastructure and the country’s
historic dominance in high-skill, precision manufacturing. At the same time, Germany has aggressively invested in domestic solar energy installation, making it the global leader in installed solar
energy capacity. Germany is unusual in the EU in
that its unemployment rate is below 10 percent.
RE deployment in Germany. Wind energy
dominates the country’s renewable electricity
production, but other renewable sources such
as hydropower and biomass are gaining market
