Countries around the globe are jockeying for leadership in clean-energy production, and according to a report released today by the Pew Charitable Trusts, China is poised to win.

"China is emerging as the world's clean-energy powerhouse. They're first in overall finance investment at $34.6 billion [in 2009]. They also score at or near the top on most of the measures tracked in our report," said Phyllis Cuttino, director of the Pew Environment Group's Global Warming Campaign, in a conference call Wednesday.

The report focused on clean-energy investment by members of the Group of 20 industrialized nations last year, who together made up more than 90 percent of investment worldwide. The U.S. was second in investments at $18.6 billion, but battered by the recession, it experienced a 40 percent decline from 2008 to 2009.

"Clearly, the U.S. was impacted by the recession," said Cuttino. "But the facts show that the U.S. trailed half a dozen or more of its G-20 partners on a variety of measures" after the onset of the global economic slump.

In contrast, a raft of favorable policies in China, coupled with the enthusiasm of public officials, spurred dramatic growth.

"The government there recognizes the strategic opportunity of exporting clean energy equipment and has set high targets," said Ethan Zindler, head of North American Research for Bloomberg New Energy Finance.

Energy policies in the U.S. have been limited and erratic, the report found. Most of the policies called for by industry representatives, including national standards, carbon reduction targets, and far-reaching financial incentives, have not been realized. When favorable policies have been enacted, they are controversial and vulnerable to repeal.

"The U.S. does not have clear, predictable policy instruments that the private sector is clearly looking for to ramp up investments. Our financial support to the sector... has been episodic and short-term. Up one administration, down the next," said Cuttino.

John Woolard, president and CEO of BrightSource Energy, which specializes in large-scale solar plants, puts it more bluntly.

"We've never had an energy policy," he said. "Our policy has been: Send a lot of money overseas and buy from people that we don't like. We have not had a thoughtful and coherent energy policy in this country in decades."

Paradoxically, the United States has been buoyed, and impaired, by its unique culture. The U.S. has historically been an engine of innovation and technology, and clean energy is no exception: In 2009, the U.S. led the world with 60 percent of worldwide venture capital investments.

But the U.S. is also hindered by a pervasive distrust of the science underlying global warming, which has transformed climate change into a divisive social issue. Given the trajectory of global energy production, however, the ability of American policymakers to convince the public that global warming is a manmade phenomenon may soon be irrelevant.

"Whether the United States agrees with [global warming] or not is almost beside the point. The rest of the world more or less has a consensus on this issue, and they're creating the demand for clean-energy equipment, and that demand is going to be met by somebody," said Zindler.

At present, clean energy is not competitive with carbon-based fuels, and it is heavily reliant on generous government subsidies. But the cost per watt of green energy is steadily decreasing, and according to Zindler, the "promised land" of cost-competitive clean energy is within reach. There has never been a better time for the U.S. to invest, he says.

"We're now within shooting range of being truly cost-competitive, so this next push is the most important... the highest return on investment for a government would probably come right about now," he said.

Depending on the shape of the comprehensive energy bill being advanced by Sens. John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joe Lieberman, I/D-Conn., the United States could abrogate a thicket of inconsistent energy policies with one fell swoop. Woolard points to an often overlooked, and perhaps unfair, tax deduction that can offset up to 90 percent of the cost of domestic fossil fuel production. "There's a lot that can be done just to level the playing field," he said.

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