A Green Battle

"The world has absolutely no hope of making any substantial impact on global warming without major scientific breakthroughs, almost all which will come from United States' innovation," said Robert Nelsen, co-founder and managing director of Arch Venture Partners.

An estimated $150 billion invested globally last year was only about half what is required annually by 2015 to avoid dangerous climate change, the International Energy Agency estimates.

The question comes down to this: will China's highly capitalized command-and-control economy trump laissez-faire in a low-carbon shift that is widely portrayed as the next industrial revolution?

The failure in Copenhagen to agree to replace the Kyoto Protocol with a new global climate treaty when it expires in 2012 has thrown the focus on national measures. And by almost all accounts, the Chinese are coming on strong.

Beijing's top leaders have made clear their intention to have their nation dominate this new industry, up and down the value ladder. And in their quest for the prize, they are not burdened by concerns facing their Western counterparts -- such as the impact of wind turbines on landscapes, higher energy prices for consumers, or investor returns.

China is leapfrogging global wind power rankings with a combination of aggressive growth targets and domestic support. It has doubled its entire installed capacity each year since 2005, according to the Global Wind Energy Council (GWEC).

As he and other investors see it, British policymakers have to make a choice: either create bigger incentives for investors to underwrite offshore wind power or impose additional taxes on fossil fuels, which would make carbon-based energy less profitable.

Very, very interesting. Since Copenhagen failed, the focus has split from a global effort to a national effort, and the war has begun. China's top-down approach will combat Europe's 2020 20% goal. The business incentives also appear to line up nicely for China. Another note is that shareholder rights need to be a part of the process. If preferred shares are utilized to direct conventional oil companies to invest in greener technologies, investors can come to the rescue.

Furthermore, Western businesses are worried China is freezing them out of this lucrative market, preferring to nurture its own nascent industries without subjecting them to competition.

"The state-owned energy company sets up its development arm and they then go to a state-owned bank to get the funding, and they go to a state-owned grid company to make sure they can get a grid connection, and then lo and behold! If there's a bidding process, the state-owned turbine manufacturers happen to win the contracts," said McNamara.

This may have its downsides, as some Western analysts say that ultimately, a free-market approach will provide the competitive means for innovation in contrast to China's state-controlled, efficient financing approach. Also at stake is a grid to support the added electricity.