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The Financial System-Backed Development of Clean Energy in the U.S.: Current Performance, Problems and Enlightenments(No.73, 2017)

By Tian Hui, Research Institute of Finance, DRC

Research report No.73, 2017 (Total 5148) 2017-7-3

Abstract: The clean energy investment in the U.S. is facing a sharp funding shortage. With the provision of preferential tax policies, the US government has encouraged the financial market to make input in clean energy investment, but the current financial system is not able to provide stable funding support for the development of clean energy across the board and this is mainly due to the following reasons. 1. The Federal Government of the U.S. lacks a clearly-defined policy approach toward clean energy development. 2. The current tax preferential policies are not adequately effective to cover a large number of beneficiaries and cannot generate appropriate incentives. 3. The pattern of the U.S. capital market performance is not in line with the features of the clean energy investment. China is also experiencing similar problems and could draw relevant enlightenments from the U.S. For instance, the government needs to send clear and consistent signals to the market and provide policy portfolio in all aspects to support the energy transformation and green finance. The capital market needs to be encouraged to make innovations and strengthen its support to energy transformation.

Key words: the U.S., clean energy, investment, green finance