In today's competitive global economy, technological innovation is essential to long-term U.S. economic security, and the energy sector should be a particular priority. Failure to extend key U.S. clean energy initiatives would be contrary to U.S. interests.
Expansion in the clean energy industry will fuel economic progress and strengthen our national security. American scientific leadership has spurred innovative new energy generation and storage technologies -- from solar and wind power to fuel cells and electric vehicles. These sources can be domestically produced and deployed over time. And these are the energy options that the world's fastest-growing economies are using to support development without harming the environment.
Research by The Pew Charitable Trusts shows that the clean energy sector is growing rapidly -- by more than 600 percent in the past seven years. According to Bloomberg New Energy Finance, investments in this sector eclipsed those for conventional energy last year for the first time. Additional Pew research shows that investment in the sector could total some $2.3 trillion this decade.
As the leading inventor of modern energy infrastructure, the United States should be a prime beneficiary of emerging global interest in clean energy. But we are not capitalizing on our scientific advantage. Instead, we are abdicating manufacturing and deployment opportunities to other nations. Pew's "Who's Winning the Clean Energy Race?"2010 edition found that China and Germany have taken the lead in the sector and that the United States is falling behind on a variety of measures.
The U.S. competitive position in clean energy is at risk because our policy environment is uncertain and capital is sitting on the sidelines. Simply put: Policy matters. Whereas China and Germany have long-term, national, clean energy policies to attract investment and spur job creation, the United States has provided limited incentives of short duration and no long-term reliability. This leaves business unable to adequately plan projects and investors searching for greener pastures.
Our research demonstrates that where national policy is strong, investment follows. Private finance and investment seek out and thrive in environments that offer market transparency, longevity, and consistency, and dry up in places that don't. The United States lacks such a policy.
Unlike a number of conventional energy supports, some of which have been in place for more than 50 years, clean energy tax measures are more modest, and they are not permanent. The energy playing field is not level, and it is not sensible to continue to subsidize technologies of the past while inhibiting our competitive position with respect to the fastest-growing global technologies and markets.
This month, Congress has the opportunity to send a signal about U.S. determination to compete and win in the global clean energy sector. Our legislators should extend three essential tax credits. One supports production in the wind industry, and the other encourages investment in industrial energy efficiency. Further, the Treasury Department's grant program for solar, known at 1603, should also be continued. These modest clean energy incentives should be extended to get capital off the sidelines, help U.S. industry compete globally, and contribute to a more prosperous, clean, and secure nation.