A Senate Special Report released by Senator Wyden’s (D-OR) office provides a scoreboard check in the clean-energy race and makes the case for the United States to step up its efforts.  By highlighting rising international demand and growth in renewable energy markets, Wyden builds a strong case for the U.S. to capture this potential rather than allow itself to continue slipping in competitiveness. Secretary of Energy, Steven Chu testified to Congress in support of Wyden’s report, calling the clean-energy race “the challenge of our time.”

The thesis of the report is summed up here:

“As the global community pursues policies to reduce greenhouse gas emissions, mitigate climate change, and protect the environment, the appetite for goods and services that are needed to sup-port these policies is growing. This is a welcome development for the U.S. manufacturers of EG and the overall American economy. However, it appears that the U.S. is not fully seizing the economic opportunities that this situation provides. The available trade data demonstrate that U.S. producers have not kept pace with increasing domestic demand for EG, revealing lost opportunities for job creation and economic growth.”

The report backs this assertion up with a plethora of data, beginning with the 200% growth to $215 billion from 2004-2008 in exports of “environmental products,” 70% of which are associated with renewable energy.  While the United States did contribute $7.7 billion in export growth, this figure was greatly overshadowed by China’s $22.7 billion and Germany’s $19.6 billion increases.

This graph provides a salient image of the comparative stagnation of U.S. growth in relation to China and Germany:

Aside from comparisons to other countries, a key note about U.S. export markets is the significant potential they have shown with exports of PV products and wind turbines growing by $2.1 billion and $1.5 billion respectively.  Also noteworthy is the location of these improvements – primarily in states with strong government incentives like California and Texas.

Unfortunately, however, the increase in U.S. exports has not been enough to maintain its share of global markets.  U.S. market share of world exports dropped from 10.6% to 8.6% from 2004-2008, with declining shares of exports to every region of the world except Latin America.  Taking into account the considerable increases in demand that are likely to continue, the foregone economic opportunities are difficult to understate.

Furthermore, U.S. exports have been overshadowed by dramatic increases in imports, which have doubled to $24.8 billion over the same time span. Now the world’s largest importer at 13% of the world’s total, the U.S. trade deficit in environmental goods has seen a 1400% increase to $5.7 billion, almost all of which has resulted from increased domestic demand for renewable energy being met by producers in Asia and Europe.

The graphs below show the trend of the trade deficit this decade:

We have previously documented the economic harm done by U.S. trade deficits. The logic is simple: in a time of crippling unemployment, the United States cannot afford to let the opportunities of clean-energy production pass by, taking the employment and growth overseas to the places putting serious efforts into innovation and development. As Sen. Wyden puts it, “The only question is which countries will invent, manufacture, and export clean technologies, and which countries will become dependent on foreign products?”

So what does this current situation mean for the course of America? The report leaves that question somewhat open, concluding as follows:

“Ultimately, U.S. policy makers need to understand the constraints that exist to domestic producers of EG, whether it is trade barriers, the business climate, access to an adequately skilled workforce, government policy, or lack thereof.”

We at Americans for Energy Leadership advocate a clear path to meeting this challenge.  The United States needs sustained investment of $15 billion a year in R&D to develop new and existing technologies and lower the cost of renewables and take advantage of learning curves and economies of scale. We need a price on carbon to stimulate private investment. We need federal initiatives such as RE-ENERGYSE to train the next generation of scientists and leaders in the clean-tech revolution.

This report shows us that if the United States does not take advantage of the opportunities in clean energy, someone else will. And we will pay the consequences for decades.

See additional coverage by the Breakthrough Institute.