China will be the only winner in Donald Trump's war on clean energy and the EPA

How times change. Twenty years ago, when I started work at the US Environmental Protection Agency (EPA) in Washington DC, renewable energy was expensive, unproven and highly subsidised. The economics of clean energy have been radically transformed since then, although you'd be forgiven for misunderstanding the facts, given how quickly technology costs have fallen.

Smart thinking these days knows that renewables are cheap, pose less financial risk to investors than fossil fuels, and don't leave taxpayers on the hook for huge clean-up costs. There are still plenty of environmental issues in which regulations impose costs on businesses that are difficult to manage. But when it comes to clean energy, more government action on climate change would be good for the businesses creating jobs and new sources of wealth.

President Donald Trump has appointed a new head of the EPA. Nominee Scott Pruitt, current Oklahoma attorney general, is an avowed opponent of the Clean Power Plan, a set of regulations intended to further stimulate the deployment of new cleaner power facilities in the United States.

Critics contend that the nominee will prove detrimental to the environment. But from a business perspective, the big risk is that reversing course on clean energy will be bad for US companies which are already slipping behind in the global clean energy race.

The cost of clean energy has fallen rapidly, meaning that in many regions of the US, it's now cost-competitive with conventional power. Solar PV, energy storage and energy efficient lighting have fallen through price floors that were not expected for another decade. In many parts of the world, including the US, renewable energy is now the cheapest way to generate energy. No subsidy, no handouts. Just cheaper.

This new reality is great news for forward-thinking investors. Clean energy stimulates new capital investments in the domestic US economy in a way that simply extending the life of old, coal-fired power plants cannot. Clean energy creates jobs. The number of American jobs in solar energy is already greater than those in oil and natural gas extraction. The potential for further growth is clear - in the Netherlands, where offshore wind is now beating coal-fired power on price, at least 10,000 new jobs will be created by the industry by 2020. This surge in tiny Holland is reflective of a global trend of new high-quality jobs in the countries where clean-energy businesses are flourishing.

The country that understands the economics of renewable energy better than any other is China, who is slowly but surely strengthening its hand in renewables. In the global race for dominance in clean energy, China and the US have so far been neck and neck, but, as recent figures show, the US is now falling behind. China's investments in green technology overseas amounted to more than $30bn in 2016 alone – far exceeding anything invested by other countries, and marking a staggering 60% year-on-year rise in spending. Chinese companies are snapping up everything from solar projects to wind farms to hydro-power installations and lithium production companies.

Indeed, it's easy to agree with President Trump; there has been a 'Chinese hoax' about climate change, although it has nothing to do with the science of global warming. The hoax is that by building so many coal-fired power stations at the beginning of this century, China managed to divert the world's attention from the fact that it was simultaneously building the world's first clean energy superpower.

What should we conclude from this? Firstly, the US cannot now turn its back on non-fossil fuel energy sources. China holds 3.5 million of the 8.1 million renewable energy jobs globally, according to the Institute for Energy Economics and Financial Analysis. This compares to 769,000 jobs tied to renewables in the US, indicating that the sector's true potential has yet to be tapped. Secondly, it's time to recognise regulating pollution is entirely compatible with robust economic growth.

Properly-designed environmental policies do in fact spur innovation and generate new sources of wealth. Businesses do not fear regulation when it gives them a clear sense of direction, and sets down a reliable set of rules about how the game of making money should be played. On the contrary, US businesses will doubtless suffer if their competitiveness in the global clean energy race is set back by policies that put them on the sidelines.

There is abundant evidence that a global shift towards renewable resources is accelerating. During my time at the EPA, there was not even one significant solar company in China. Today, seven of the global top-10 are based there. Conventional wisdom says there's a trade-off between what's good for business and what's good for the environment.

Transcending that old, and increasingly inaccurate, way of thinking about clean energy is essential if the incoming US Administration wishes to harness the breakthroughs that are creating jobs and wealth in other countries. The alternative is to be trammelled by those who do.

Charles W. Donovan is director of the Centre for Climate Finance and Investment at Imperial College Business School in London.