U.S. Clean Tech Exports Are the Key to Long-Term U.S. Economic Growth

In 2023, clean technology manufacturing alone accounted for around 4 percent of global GDP growth. Nowhere is it more evident how clean tech investments can drive economic competitiveness than in China, where clean energy contributed 10 percent to China’s GDP in 2024, driving a quarter of the year’s GDP growth. Studies have found carbon-neutral or carbon-sink activities generate more than a dollar’s worth of economic activity for each dollar invested; for renewable energy, this multiplier is estimated to be between $1.00 and $1.50 for each dollar spent, compared to ¢50 for fossil fuel investments. Clean energy generates more jobs and stimulates more localized economic activity. Around half of the global energy workforce is employed in clean energy, despite coal, oil, and natural gas supplying about 80 percent of total energy global energy.

The value creation potential is especially prominent in developing economies, where addressing energy poverty is a stated goal of Secretary of Energy Chris Wright, who asserts energy poverty is a more pressing issue than climate change. In the developing world, clean energy technologies are a key part of expanding energy access and economic development. Over 680 million people lack access to electricity, primarily in Sub-Saharan Africa. Off-grid solar could provide first-time electricity access to almost 400 million people globally by 2030. In the same time period, clean energy technologies could create 1.5–3.3 million new jobs in Africa alone. Expanded access to energy would also create half a billion jobs across the rest of the economy, including in agriculture, health care, and education.

Global Leaders Pick Up Where the United States Federal Government Left Off on Industrial Policy

Recognizing global momentum and the desire to meet their own climate goals, other developed countries will continue to scale new clean technologies into commercial reality. Partly inspired by the U.S. Inflation Reduction Act and motivated by decarbonization and energy security goals, U.S. allies such as the European Union and Australia are bolstering their industrial competitiveness ambitions.

The European Union, in particular, sees opportunity in the uncertain U.S. policy landscape to position itself as the stable alternative for U.S. clean tech investment. The European Green Deal, announced in 2019, was the flagship initiative of the previous European Commission. While it focused heavily on climate ambition, it lacked a coordinated industrial policy, which weakened its effectiveness. To address this shortcoming, the new European Commission introduced the Green Industrial Deal, which focuses more strategically on linking climate goals to competitiveness, manufacturing, and energy security. Key to its success will be its ability to mobilize private capital, address high energy costs, and align the fragmented markets across the European Union.

Australia’s current Labor government was recently reelected with a larger majority, signaling public support for its climate agenda. Like the European Union, in its first term, the focus was on establishing climate ambition and is now moving towards implementation. As Australia has long relied on energy exports for economic growth, part of this plan recognizes the strategic need to build new export industries for a decarbonizing system, such as green hydrogen and low-carbon metals. To do so, it is leveraging institutional tools to align conditions for domestic innovation and foreign investment. For example, the Clean Energy Finance Corporation is a government-backed green bank supporting large projects. Australia is also seeking geopolitical partnerships to align security and trade, especially around supply chains and critical minerals.

The Path Forward for U.S. Clean Tech Export Competitiveness

Market trends and continued policy developments challenge the United States to claim a leadership position within global energy value chains that also happen to be clean.

To do so, especially in competition against China, the U.S. must better align its development finance institutions, such as the Development Finance Corporation (DFC) and the Export-Import Bank (EXIM), with security and economic diplomacy goals; there is a gap between industrial competitiveness ambitions at the strategic level and institutional execution authorities at the implementation level. Because DFC is demand-driven with no statutory requirement for the investment to use U.S. goods or services, U.S. diplomacy must focus on expanding global markets for next-generation U.S. clean tech such that low- and lower-middle-income countries self-select U.S. technologies. For such technologies that are high-risk endeavors requiring high degrees of upfront capital investments, DFC should make greater use of its equity authority to bring more risk-tolerant capital to early commercial deployments. However, even with equity, DFC’s allowable risk-tolerance is not conducive to supporting advanced nuclear projects abroad, and financing speed, flexibility, and scale are not competitive with China’s financing model. DFC and EXIM are both up for congressional reauthorization, which is an important opportunity to reform these institutions to more effectively facilitate U.S. export competitiveness, especially in clean tech sectors. For example, statutory changes in reauthorization could raise DFC’s portfolio-cap and single-project exposure limits and extend EXIM’s Clean Technology Export Program (CTEP) into a more ambitious and longer-term program to more meaningfully compete with the 15 plus year financing terms offered by Chinese state investments.

Reclaiming Momentum through Coordinated Investment

As global investment in clean technology accelerates, the United States risks losing momentum at a critical time when global clean tech value chains are being formed and solidified. Clean tech is no longer a decarbonization tool; it is a central pillar of energy security, economic competitiveness, and foreign policy. While allies and competitors alike are leveraging industrial policy to attract capital, scale deployment, and secure supply chains, the United States risks sidelining itself by narrowly focusing on a narrow subset of energy technologies. While advanced nuclear and geothermal have strategic potential, they alone cannot sustain U.S. competitiveness across the full spectrum of global clean energy markets. To reclaim its leadership, the United States must support both domestic innovation and deployment as well as empower its development finance institutions to more effectively build global markets for U.S. energy technology exports. Failing to do so will not stop the energy transition; it will only allow the rest of the world to set its trajectory. With the right strategic investments, the United States can still assert its leadership to shape a global clean energy system that aligns with long-term economic and security interests.

Leslie Abrahams is a deputy director and senior fellow with the Energy Security and Climate Change program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Joseph Majkut is the director of the Energy Security and Climate Change Program at CSIS.