As non-renewable energy prices rise, the pursuit of clean energy sources is more important than ever. How does the U.S. stack up against other major energy innovators?

For years, the United States has worked to reduce its reliance on foreign oil, develop renewable energy resources and find ways to minimize the negative environmental effects stemming from energy generation and consumption. But the U.S. is not alone in this endeavor. In fact, many developed and developing nations are actively pursuing sustainable clean energy alternatives to improve their competitiveness and gain economic advantages.

The race for clean energy is picking up, particularly as traditional energy prices are on a major upswing.

“Accelerating U.S. clean technology innovation, manufacturing and market creation has become not just an environmental necessity but an economic imperative,” Forbes.com’s Energy Source blog explains. “With the global clean energy economy emerging as one of the largest economic opportunities of the 21st century, government policy and public investment will be critical determinants of which countries come out on top in the race to attract private sector investment in clean energy technologies.”

According to a report from the Pew Charitable Trusts last month, global clean energy finance and investment surged to $243 billion in 2010, a 30 percent increase over 2009. Excluding research and development (R&D), worldwide investments in clean energy are 630 percent higher than they were seven years ago.

The wealthy G-20 countries dominated last year’s clean energy funding, with 90 percent of clean energy investments in 2010 directed to companies and projects based in the G-20. Minus R&D funding, clean energy finance and investment last year grew by 33 percent to $198 billion among the G-20.

On a country-by-country basis, China topped the list for clean energy development for the second consecutive year. The nation’s clean energy investment rose 39 percent from $39.1 billion in 2009 to $54.1 billion, setting a world record. Germany climbed to the second spot with $41.2 billion invested in 2010. Meanwhile, the U.S., which remained at the top of the global rankings until 2008, fell in position for the second consecutive year.

“Investments in the United States rebounded 51 percent over 2009 levels to reach $34 billion, but the United States continued to slide down the top 10 list, falling from second to third,” the Pew report notes. “Given uncertainties surrounding key policies and incentives, the United States’ competitive position in the clean energy sector is at risk.”

Experts attribute the U.S.’s declining clean energy performance to a number of factors, including the expiration of stimulus funding and few indications of clean energy incentives in the near-term future. However, the largest single influence on the country’s sliding ranking is the lack of a national clean energy policy.

“Countries like China, Germany and India were attractive to financers because they have national policies that support renewable energy standards, carbon reduction targets and/or incentives for investment and production and that create long-term certainty for investors,” Phyllis Cuttino, director of Pew’s Clean Energy Program, said in an announcement of the findings.

Uncertainty over U.S. clean energy policies is likely to remain for the foreseeable future, as lawmakers continue to propose and reject national renewable energy standards.

“A comprehensive energy bill died in the U.S. Senate last July,” Reuters reports. “Washington also has failed to pass national mandates for utilities to produce minimum amounts of clean power that environmentalists and some analysts say would boost confidence for alternative energy companies to invest in the country.”

Although the U.S. also fell to 11th place among G-20 countries in terms of five-year clean energy investment growth, it continues to be the leader in venture capital and private equity investment, accounting for 73 percent of the G-20 total in 2010. It also led the world in funding energy efficiency improvements and technological innovations, but, according to Pew, it lags behind in clean energy manufacturing.

Despite slipping in global competitiveness, the clean energy sector is proving to be big business for U.S. firms. Clean-tech market research firm CleanEdge found that while overall venture capital investments in U.S. companies fell from $37.6 billion in 2001 to $21.8 billion in 2010, clean technology investments rose from $458 million to $5 billion over the same period, expanding clean-tech’s share of the venture capital market from 1.2 percent to 23.2 percent.

Clean energy alternatives are steadily growing, but they remain a small portion of the overall U.S. energy market. Some of the common problems with clean energy are that it’s currently too expensive to compete with fossil fuels, relies too heavily on government subsidies and still lacks the technological advances necessary to provide reliable, full-time power. However, the potential benefits that could be derived from stable, widespread clean energy sources may be worth the initial hurdle.

“Getting to the front of a new global industry could mean creating an engine that generates jobs and economic output for generations,” the Wall Street Journal explains. “Moreover, renewable energy, including geothermal and recycled municipal waste, is cleaner than existing fossil fuels, reducing carbon-dioxide emissions as well as local pollutants.”

Despite lingering skepticism among some policymakers, the White House announced in late March that it will continue to bolster the clean energy market’s competitiveness by pursuing a clean energy standard. This standard will establish a goal of generating 80 percent of the country’s electricity from clean energy sources — such as wind, solar, biomass, hydropower and nuclear power — by 2035.

Earlier

EPA Rules Greenhouse Gases Endanger Public Health

Clean Tech in a New Energy Economy

Cleantech Investment Climbs to Highest Quarter on Record

China Addresses National Energy Challenges

Resources

A Clean Energy Competitiveness Strategy for America
by Jesse Jenkins and Devon Swezey
Energy Source (Forbes.com), Aug. 15, 2010

Who’s Winning the Clean Energy Race?
Pew Charitable Trusts, March 2011

Global Clean Energy Investment Reached Record $243 Billion in 2010
Pew Charitable Trusts, March 29, 2011

U.S. Drops to 3rd in Clean Energy Investment: Pew
by Timothy Gardner
Reuters, March 29, 2011

Clean Energy Trends 2011
by Ron Pernick and Clint Wilder
CleanEdge, March 2011

Wind, Sun Power Still Face Hurdles
by Russell Gold
The Wall Street Journal, March 31, 2011

Fact Sheet: America’s Energy Security
The White House, March 30, 2011