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G-20 determines world's energy fate, says report

China may lead, but government policies of most influential nations collectively hold power over how much money is privately invested in clean power projects, according to The Pew Charitable Trusts.

The Pew Charitable Trusts

The G-20 nations have the most power and the largest impact on the future of clean energy because together they account for 90 percent of the world's investment in clean energy. In addition, China leads the G-20 and the world in investment and almost every other category when it comes to clean-energy development, and it may do so for the next 10 years.

That's according to a report released today by The Pew Charitable Trusts, in conjunction with Bloomberg New Energy Finance. The report, called "Global clean power: A $2.3 trillion opportunity," offers predictions for the future of clean-energy investment based on which policies are adopted by the G-20 member nations.

The report lays out how world private investment in clean energy would play out under three different scenarios: if current policies remain in place, if the Copenhagen 2009 pledges are carried out, and if more aggressive energy policies are adopted.

According to a Pew report released earlier this year, China was the largest investor in clean energy in 2009 at $34.6 billion, when including asset finance, public markets, and venture capital/private equity as categories. The U.S. came in second with $18.6 billion, followed by the U.K. with $11.2 billion.

This new report released today indicates that China continues to lead, and that worldwide private investment in clean-energy projects will likely total $1.7 trillion worldwide by 2020.

If the G-20 governments adopt more aggressive clean-energy policies, that investment could increase by $546 billion to a total of $2.3 trillion.

"Under the enhanced clean-energy scenario, China could attract $93 billion worth of clean-energy asset financing in 2020. Cumulatively, in this scenario, $620 billion is projected to be invested in renewable energy assets in China over the next 10 years," said the report.

India is also a rising star with regard to the energy sector. It's predicted to go from 10th to 3rd in rank by 2020, no matter which of the three scenarios comes true. India, the U.S., and the U.K. are the three G-20 countries where a lack of clean-energy policies has left each of them a lot of room for possible growth in the coming years, according to the report.

"Cumulatively, the United States has the potential to attract $342 billion in private clean-energy investments over the next decade," said the report.

Wind has proved to be the most cost-competitive large-scale clean-energy option, with the report predicting the already successful wind sector to win even more investment compared with other options like solar, geothermal, or hydro power. Under aggressive clean-energy policy adoption, the industry would see $190 billion invested in it by 2020. Here, too, China also leads the charge.

In all three scenarios, more than 50 percent of energy investment in China is for wind energy-related technology and projects.

The information also coincides with an Ernst & Young report released earlier this month, which found that more than 50 percent of the world's wind investment currently comes from China.