Jan. 15, 2008 - Multinationals including Adidas and Caterpillar are supporting a new U.S. government program that encourages Chinese firms to outsource their energy-efficiency operations to environmental services companies in the West, the Wall Street Journal reports.

The Pollution Prevention and Energy Efficiency (P2E2) program links Chinese manufacturers with firms that have more expertise in upgrading equipment and reducing emissions. The innovative financing program uses Asian Development Bank or International Finance Corporation loan guarantees to provide capital to environment and energy services companies, which in turn contract with factories, power plants, and real estate developments in mainland China to carry out technology and equipment upgrade work free of charge.

Footwear maker Adidas is encouraging its suppliers to participate in the program, although it's encountering some initial resistance. "It's going to take quite a bit more time," says Lyn Ip, Adidas's manager for environmental affairs in Asia. "It's very crucial for us to try and illustrate the economic potential for the industry and...the tangible benefits for the environment. If it doesn't make economic sense, then it will be difficult to do any change."

The U.S. Commerce Department hopes the program will create new Asian markets for American clean-tech firms. "The opportunities are unparalleled in terms of the amount of money that's going to go into the energy infrastructure over the next 25 years," says Assistant Commerce Secretary David Bohigian.

Although P2E2 is initially focused on China, the program is open to any company that has a legal presence in Hong Kong, where the financing transactions take place.