Global investment in renewables to total $1.7 trillion by 2020

Current policies among the world's richest 20 nations will result in $546bn (£348bn) less being invested in clean energy by 2020 than is needed to prevent dangerous climate change, according to a new report.

The report also predicts that the UK will become a much more significant investor in green technology globally, increasing its spending by 260% over the next decade. But despite this boost to renewable energy and other green industries, the authors believe that India will nudge ahead of the UK into third place by 2020.

On a business-as-usual basis, $1.7 trillion (£1.08tn) would be invested globally in renewables like solar and wind, biomass and other low-carbon forms of electricity generation over the next decade.

According to a report carried out by Bloomberg New Energy Finance for Pew Charitable Trusts, this would still be $546bn short of the investment which more proactive government policies on climate change by the G20 countries would bring about globally. "Enhanced" policies such as fixing a price on carbon and tough restrictions on power stations' emissions are seen as key to restricting a rise in temperatures to no more than 2C.

The report shows how much money Asian countries – particularly China and India – are expected to pour into clean energy regardless of what policies are adopted. Under the "enhanced policy scenario", China, which last year became the world's biggest investor in clean energy, is expected to triple spending over the next decade to over $90bn (£57bn) per year by 2020, with more than half going on wind power. Chinese spending is forecast to be almost twice that of the second biggest spender, the US. Mature markets where renewables have enjoyed significant investment for some time, such as Germany, are expected to see investment levels decline over the decade.

The UK is set to keep up with soaring investment, having traditionally lagged its continental counterparts despite its ample wind and marine energy potential. Stronger government support has belatedly kick-started investment in green technology, catapulting the UK to the world's third biggest spender on renewable energy last year thanks to a surge in financing for North Sea offshore windfarms. Under the enhanced policy scenario, annual investment could grow by 260% by 2020 according to the report, with a total of $134bn being spent over the decade and $22bn in the year 2020.

Even so, the UK will be overtaken by India by 2020, which was ranked 10th last year but is forecast to rise to third by the end of the decade, behind China and the US, making it the world's faster growing spender. The UK would be pushed back to fourth place in all three scenarios – based on existing policies, implementing pledges committed to at the Copenhagen summit last year and enhanced policies.