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The renewable energy sector has the potential to become a significant economic engine for any country that embraces it, but Canada is falling behind.

Our woefully inadequate strategy for the sector was underlined when the United States recently unveiled its support for just one small segment of the renewables industry: geothermal power companies that generate electricity using hot fluids pumped from under the ground.

The U.S. Department of Energy is funding $338-million (U.S.) in exploration and development of geothermal technology, at 123 early-stage projects. That's on top of hundreds of million of dollars of low-cost loans, tax incentives and capital-cost grants the government has already provided for geothermal projects in the later stages of development. Ironically, about 10 per cent of the new money will go to companies either based in Canada or traded on Canadian stock exchanges, which have projects in the United States.

Canadian government support for the geothermal industry is so meagre that there is not a single such power-generating project here, despite good geological potential in the West.

Ottawa's main tool for supporting the renewables industry is its Eco-Energy fund that subsidizes low-impact power projects to the tune of one cent per kilowatt hour of electricity produced. It goes to wind, biomass, hydro, solar, wave or geothermal power projects. Unfortunately, the fund has proved so popular that it is expected to run out of money by the end of this year, and the government has made no move to renew or replace it.

Some provinces have taken bolder moves. Ontario's new "feed-in tariff" that pays guaranteed - and very high - rates for power generated from renewable sources looks as if it will light a fire under the industry in the province and attract foreign players and manufacturers to locate in the province.

Liberal Leader Michael Ignatieff said in a speech last month in Vancouver that shortchanging the renewable sector now "is like taking a pass on the Internet back in 1995 and investing in transistor radios." He's right. While the Harper government seems intent on focusing its efforts on carbon capture and storage, as a way to mitigate the environmental damage from the oil sands and coal-based power generation, there is far more to be done if Canada is to become a significant participant in what is certain to become a huge worldwide green energy industry. The first step should be for Canada to develop a comprehensive renewable energy strategy, as soon as possible.