Bruce Usher, Executive-in-Residence at Columbia Business School, writes in today’s New York Times:

With the disastrous oil spill in the Gulf, talk has once again turned to clean energy. What few people appreciate is that the demand for everything from solar panels to energy-efficient light bulbs is already booming. Worldwide, $162 billion was spent in new clean-tech investments in 2009 alone.
The United States, with its expertise, capital and entrepreneurial spirit, is well positioned to dominate what could easily be the biggest market of the 21st century. But as the most recent delay over the Senate energy bill shows, the country is missing a key ingredient in shaping an effective clean-tech policy: the political will to encourage the innovation, manufacturing and investment necessary to bring these new technologies to market. And the longer America drags its feet, the more it cedes this enormous potential source of national wealth to the only other country able to capture it — China.
True, China has a long way to go before it can claim the mantle of global market leadership in clean technology. Unlike the United States, however, it has spent the last few years shaping its industrial policy to achieve precisely that goal.
China’s determination to become the global leader in clean tech has little to do with concerns for the environment and everything to do with jobs. For the foreseeable future, the greatest challenge for Beijing is to ensure full employment and rising income levels. The rapidly growing clean-technology sector is one of the few that can provide a sufficient number of new jobs. (Disclosure: I invest in clean energy in America and abroad.)
This wouldn’t be the first time China has taken economic advantage of opportunities resulting from climate change. The Kyoto Protocol, which caps greenhouse-gas emissions in Europe and Japan up to 2012, includes market-based mechanisms to promote the reduction of emissions at the lowest cost. The largest of these is the Clean Development Mechanism, which allows developing countries like China to generate credits from cuts in their greenhouse-gas emissions that are then sold to developed countries.
Beijing was initially slow to establish the domestic regulatory structures and develop the expertise needed to compete in this new market. In a 2004 analysis, the World Bank determined that China accounted for a mere 5 percent of clean-development projects globally. But by 2008, the most recent year for which annual data is available, the bank reported that China’s market share had climbed to an astounding 84 percent.
Beijing is about to do the same with clean technology. In 2009, its investment in clean energy reached nearly $35 billion, almost double America’s $19 billion, primarily due to domestic policies that promote the use of renewable energy. And the strategy is working. In 1999 China made 1 percent of the world’s solar panels; by 2008 it was the world’s leading producer, with a 32 percent market share, and its solar-panel exports were valued at $15 billion. To put that in perspective, in 2009 America’s No. 1 export product by far was civilian aircraft, with exports of $35 billion.

The rest here.