For years, climate scientists have been warning us that if the world continues its current Greenhouse Gas emissions trajectory, humanity may face perilous climate scenarios. Despite notable climate awareness campaigns and significant renewable energy progress over the last decade, the transition to a low carbon global economy powered by cleaner sources of energy isn’t being realized fast enough to avert the worst possible climate scenarios.

A huge and immediate increase in renewable energy investment—both in the deployment of existing, low-carbon technologies and in research dedicated to new disruptive technologies—is desperately needed to jumpstart this transition. Thus far, all sights have been directed towards global financial markets and western nations to make this investment.

Financial markets have been reluctant to invest at the required scale for two reasons. First, if left unsubsidized, existing clean energy technologies are too expensive to compete with traditional energy sources. Second, there are no foreseeable governmental policies that aggressively tax Greenhouse Gas emissions to incentivize clean energy deployment and innovative research at the required scale.

Western governments are also in no position to make the necessary investment given their huge deficits, domestic problems, and focus on economic recovery. They are further limited by their lack of political flexibility, imagination, and will.

Despite the inability of financial markets and the failure of western governments to substantially address climate change, we believe that a timely solution is still possible, but it will have to come from a seemingly unlikely place: China, ironically the world’s largest polluter and carbon emitter.

China is uniquely positioned to make the massive investment that is required to jumpstart the clean energy revolution given its intertwined political and economic decision making system that has proven adept at making aggressive long-term strategic investments and its large foreign exchange reserves. We propose that the Chinese government divest 20 percent of its over $1 trillion worth of U.S. treasury bill holdings and create a $200 billion clean energy focused investment fund.

Fund investment could take many different forms and be spread across diverse stages and types of technologies across the globe. Long-term investments would be made in advancing potential leap-frog technologies and buying equity in promising start-ups, large companies like GE and existing investments funds like Khosla Ventures. Specific dollar amounts could be earmarked for research partnerships with premier academic and research institutions  like MIT and Fraunhofer, global acquisition of strategic energy materials like lithium, attracting top talent to China,  and  creation of more energy focused tax-free special economic zones within China. Diversified investments would both reduce risk and provide China multiple strategic opportunities to establish leadership in the clean energy space.

Creation of the proposed fund would provide China with both soft and hard benefits, while putting the world on a much safer climate trajectory. First, the fund would present China a strategic opportunity to diversify its foreign investment portfolio. Over two-thirds of China’s $3 trillion in foreign exchange reserves are held in dollar denominated assets, primarily US treasury bills. Re-allocating $200 billion of dollar reserves to an energy-focused sovereign wealth fund would both reduce exposure to dollar risk and offer long-term higher returns.

More importantly, massive clean energy investment right now will aid China moving forward as it attempts to continue growing its energy-hungry economy in the face of inevitable surging global energy demand and skyrocketing prices—all in the midst of fears of climate change and dwindling supplies of fossil fuels. With these mega-trends all converging, the proposed fund would enable China to lead the nascent clean energy revolution and position the country to become the Saudi Arabia of renewable energy. This investment would allow China to make major simultaneous progress toward advancing its energy security, achieving a sustainable technological advantage, and expanding exports and promoting massive job growth.

We believe that this $200 billion self-serving gambit by China would ignite a monumental global energy race. Historic precedent suggests that nations around the world—especially the United States—will be both fearful of and inspired by China’s bold energy action plan. Over 50 years ago, another communist nation, the Soviet Union, shocked the world by launching Sputnik, the first artificial satellite in orbit. The resulting Space Race with the United States unleashed the very best of both America’s and the U.S.S.R.’s competitive spirit and innovative potential.  Despite its Cold War context, the Space Race generated unprecedented scientific achievement and hugely beneficial spin-off technologies.

In the same vein, China’s clean energy fund will force countries around the world to make similar strategic commitments and financial investments in clean energy. The resulting tidal wave of global human energy, creativity, and investment dedicated to advancing renewable energy may just be humanity’s best shot at solving the climate and energy crisis.

Hemi H. Gandhi ’13, a Crimson editorial writer, is an engineering sciences concentrator in Leverett House, and Bruce Peng, Harvard Kennedy School ’10, is a Chinese clean-tech financier.