A near 10 percent drop in clean tech investments last year indicated that the U.S. might be losing its place as the world’s top investor and enabler of clean tech innovation.

Last year, U.S. clean tech investments dropped to a five year low, from 72 percent of the worldwide total in 2008 to 62 percent, while Europe and Israel’s percent of the global clean tech market climbed to an all-time high of nearly 30 percent.

According to the CleanTech Group, an investment advisory service provider, despite the solar sector being the largest recipient of clean tech funding, concentrated solar thermal investment declined 90 percent.

In the absence of funding, utilities continued to bring capital and access to credit to the clean tech sector and are playing a fundamental role in getting more projects off the ground.

“North America still attracts the largest percentage of clean tech venture capital, but the fact that it is slightly down is worth noting,” says Dallas Kachan, a managing director at CleanTech Group, a consultancy that pioneered the word clean tech and owns it as a registered trademark. “It underscores that clean tech innovation continues to globalize.”

“As for overall growth in private capital, we believe we’ll actually see a recovery and record year in 2010 for cleantech fundraising,” says Kachan. “Not necessarily in actual venture investments in 2010, but we expect to see record funds raised aimed at clean technologies.

In the absence of a mandatory national cap-and-trade scheme, will voluntary carbon markets bear enough influence to generate greater price alignment between fossil fuels and renewable energy?

I personally don’t think so. While voluntary efforts will continue on a small scale, it will take government intervention in the form of creating and cap and trade market or implementing carbon emissions-related taxation to actually get the business environment to change.

View a previously written post by Mouli Cohen about environmental legislation