Lack of U.S. Climate Law Sends Deutsche Bank's Investments Abroad

Deutsche Bank is taking its green investment dollars to China and Western Europe, citing a lack of regulatory certainty in the U.S. following Congress's failure to pass federal climate change legislation.

In a strongly-worded interview with Reuters, the head of the Deutsche Asset Management Division explained why only $45 million in green investments originated in the U.S., out of the $6 billion to $7 billion in funds devoted to climate change products.

"They're asleep at the wheel on climate change, asleep at the wheel on job growth, asleep at the wheel on this industrial revolution taking place in the energy industry," Parker told Reuters, referring to Congress's failure to agree on a climate change bill.

Even some of the incentives the government has put in place are lacking, Parker said, such as off-and-on renewable energy tax incentives that have added to the investment uneasiness.

In contrast, governments in China, Germany, Italy and Spain have made climate change a priority, with national policies and laws that offer investors certainty on the regulatory risks.

Parker said the U.S. "hasn't even entered the race yet" for a low-carbon economy. It may, however, be petering out even before if reaches the starting line, according to Eric Pooley, deputy editor of Bloomberg BusinessWeek. In a column he wrote days after Senate Majority Leader Harry Reid introduced a watered-down energy bill lacking a carbon cap and renewable energy standard, Pooley cited a recent gathering of cleantech executives bemoaning the turn of events.

"The deployment rate of renewable energy projects in America is withering," said Andy Karsner, CEO of Manifest Energy and a former assistant secretary for Energy Efficiency and Renewable Energy during the George W. Bush Administration. "Projects announcements are happening, but largely at the end of a federal check."

In the second quarter, Pooley noted, cleantech asset investment in China, including financing of low-carbon technologies such as solar panels and wind turbines, soared 72 percent from the same time last year to $11.5 billion. In comparison, clean energy investment reached $4.9 billion in the U.S., and $4.5 billion in Europe.

China has passed the U.S. in cleantech IPO proceeds, solar panel production, and cleantech stimulus funding. It may not be long before it exceed U.S. spending on research and development.

Meanwhile, the U.S. is left attempting to address climate change through EPA regulation, which many say will be more expensive than the climate change bills that stalled in the Senate.

Said Parker, "You just throw your hands up and say ... we're going to take our money elsewhere."

Image CC licensed by Flickr user myuibe.