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Investment in “Clean” Energy Rising

Wind turbines
Such emerging economic powerhouses as China are investing more in science and technology research, particularly clean-energy production from wind and solar sources. Wikimedia Commons/Shi Zhao

The investment in “clean” energy technologies is on the rise in emerging economies across the globe, according to a recent National Science Board study.

February 25, 2014—The United States has long held a preeminent global position in science and engineering due to its continuing investment in research, development, and education, according to material issued with a report published earlier this month, Science and Engineering Indicators 2014. Such investments “correlate strongly with economic growth and with the development of a safe, healthy, and well-educated society,” according to the National Science Board (NSB), the publishers of the report. However, U.S. predominance is continuing to slip, and in particular, emerging economies have far surpassed the United States’s investment in so-called “clean” energy technologies.

Emerging economies are consistently expanding their investment in science and technology industries, narrowing the gap between their spending and that of the United States, according to the report. The study found that while the United States in 2011 contributed 30 percent of the global research and development investment in science and technology, down from 37 percent in 1996, the emerging economies of major Asian countries contributed a combined 34 percent, up from 25 percent in 1996. (Worldwide, research and development expenditures in 2011 were estimated to be $1.4 trillion, according to material issued with the report.)

Despite the slipping percentage of U.S. investment, the news is not entirely discouraging, according to Dan Arvizu, the chairman of the NSB and the director and chief executive of the National Renewable Energy Laboratory, in Golden, Colorado. The NSB oversees the preparation of the report, which is released every two years by the National Science Foundation’s National Center for Science and Engineering Statistics. This year marks the 21st issue of the study.

Investment in science and technology is not a zero-sum game, Arvizu says, and the United States is continuing to make a significant investment, as it has done for many years. “What we’re seeing now regarding the changing global scientific landscape is really that a lot of the new emerging economies—read that as Asia in particular, but a lot of others as well—are making increased investments,” he says. “In some cases [the investments are] as a percent of their own gross domestic product, and they actually are making investments at a greater rate than we are here in the United States.”

Between 2005 and 2012, the global commercial investment in clean energy technologies rose from less than $30 billion to $159 billion, according to the report. Of that, the United States invested $29 billion in 2012. The U.S. spending is dwarfed, however, by China’s investment of $61 billion in 2012. China’s spending is the largest investment in clean energy by an emerging economy and represents a rapid expansion from its 2004 input of $2 billion. Overall, emerging economies spent almost $100 billion on clean energy technologies in 2012, primarily wind and solar energy, according to the report.

Investment in knowledge- and technology-intensive industries—the overall category of which clean energy is a part—is important for the future, according to Arvizu. “We shouldn’t rest on our laurels, and we shouldn’t stand still,” Arvizu says. “These other economies are not only not standing still, they are moving forward rapidly. And in that particular sector [they] are actually making investments that are nearly equal to those of the United States.”

An increasing investment in knowledge- and technology-intensive industries “is a competitive edge, a competitive advantage,” Arvizu points out. “If you’re losing ground in that particular sector, then eventually you’ll lose ground overall.”

The growth of investment in clean energy sources is a particularly 21st-century phenomenon, Arvizu says. Overall, he expects that there will be significant investment in energy in the future. “I think what we’re seeing is a couple of factors at play here. First the emerging economies have a much greater demand for energy than the more established, developed economies. Demand for energy technologies in developed countries tends to be either flat or declining, because we are becoming more efficient and the new energy focus is on replacing existing infrastructure as it ages.

“Additionally, particularly in the U.S., energy from existing sources is fairly inexpensive so there is less motivation to explore newer, cleaner, technologies,” he says. “Domestic energy prices in the United States are lower than almost anywhere else in the world, and the availability of natural gas, in part, makes that possible.”

“However, in emerging economies, particularly China,” Arvizu adds, “investment in all forms of energy is booming. They have this insatiable appetite for new energy, and they don’t have [much] existing infrastructure, so they invest in all types of energy, and in fact they are investing as much in fossil energy or the ‘nonclean’ energy as they are in clean energy.”

Emerging economies’ investment in clean energy is “just a matter of the market demand, and public policy,” an indication that these countries are diversifying their energy-generation portfolios, Arvizu says. But, he adds, “That alarms me.” When you take into consideration energy storage, integration, and generation technologies that are being developed with these investments, he says, “these economies get a chance to start fresh and make those kinds of investments, so I think they’re going to learn things, and unless we keep pace in terms of converting our own energy system, I think what we’re going to find is [that] we’re going to be at a disadvantage because we’ve not made the necessary investments in more advanced infrastructure.”

The study began tracking clean energy investments within the last decade. “We have seen these investments globally grow exponentially,” Arvizu says. “To a large degree this energy investment dynamic will be important over the long term and I think is important for us to watch.”

The science and engineering indicators report is issued in even-numbered years to the Office of the President and Congress, covering the scope, quality, and vitality of science and engineering enterprise through a number of different indicators. The study collects data that will contribute to the country’s current understanding of the science and engineering climate.

The report also examines the state of elementary, secondary, and higher education; the work force; national trends and international comparisons of research and development; academic research and development; industry, technology, and the global marketplace; and public attitudes and understanding of science and technology.



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