U.S. Missing Policy Drivers to Green Economy Growth – Deutsche Bank Climate Change Advisors / Cleantech Forum NY

New York City

In the opening keynote for the Cleantech Forum NY conference October 11, 2010, Kevin Parker, Global Head of Deutsche Asset Management, Deutsche Bank, outlined the critical policy elements required to develop and drive winning financial models over the coming decade.

Overall, global clean energy investment grew at a 23% compounded annual growth rate (CAGR) between 2004 – 2009, and is expected to reach over $450 billion annually by 2030, nearly 300% of last year’s level.  China took the lead from the US in 2009 for overall clean energy finance and investment with over $33 billion, compared to US investment of $17 billion last year.  As a percent of GDP, US invests only 0.08% in clean energy, falling behind Spain, Brazil, China, Germany, India, United Kingdom and Canada on the same basis.  This is not just a ‘green’ issue, for clean energy is tied directly to increased energy and national security, as well as economic development.

To develop a more robust investment climate in the US, Mr. Parker began by addressing the underlying policy concerns of the financial community, especially with respect to clean energy.  Investors are looking for three policy drivers, namely, transparency (understandable and available); longevity (does policy match the time period for return on investment of long term capital projects); as well as certainty and consistency (are incentives financeable).

Mr. Parker looked at these concepts through the lens of specific policy regimes ranging from long term national standards for emissions, renewable energy portfolios, energy efficiency plans, grid improvement plans, feed-in tariffs, ‘green banks’, tax benefits, to funding programs.  On a simple binary yes/no basis, the US ranked last compared to Germany, China, United Kingdom and India.

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