Canada urged to keep up with U.S. green efforts

* Canadians lag U.S. in support for green tech

* Cash hard to find, conference hears

* Government policy needed to spark investment

OTTAWA, Oct 21 (Reuters) - Canada has fallen behind the United States in its push toward green technology and would benefit from matching U.S. efforts to support the sector, a former adviser to President Barack Obama said on Wednesday.

While both countries still have significant work to do, the Obama administration has put a massive $90 billion toward clean energy investment, said John Podesta, president of Center for American Progress and co-chair of Obama's transition team. He was speaking at an industry conference in Ottawa.

Beyond financial muscle, the White House is also considering U.S. climate change legislation that would cap carbon emissions and require industry to pay for greenhouse gas.

The administration has also pressed the Environmental Protection Agency to take steps on regulating carbon emissions.

"We probably, to some extent, are in similar circumstances -- with Canada having done more during the period of 2001 to 2008, and I think the United States now is taking the lead," Podesta told reporters after a speech at a financing conference.

"The Canadians would be well served by keeping up with what's going on in the United States with respect to this push towards clean technology."

Canada is doing a poor investment job, said Gerald Butts, chief executive of the World Wildlife Fund Canada, with just 8 percent of its stimulus funds earmarked for green projects. "We're near the bottom of the list," he said of a global survey.

Podesta said three measures are crucial to support the clean tech sector: carbon cap-and-trade systems, which put a price on carbon emissions; clear national standards on renewable energy and efficiency targets; and adequate financial support.

Financing, the focus of a day-long conference in Ottawa, is a perennial problem for the fledgling clean tech sector, which is idea rich, but capital poor. PAUCITY OF CAPITAL

The event was organized by Sustainable Development Technology Canada, the country's biggest early-stage investor in clean technologies.

The non-profit agency has a C$550 million ($529 million) fund to support projects aimed at climate change, clean water and air quality, and a C$500 million fund for demonstration plants that produce renewable fuels.

But a steady stream of executives said that beyond those funds, there is a paucity of capital they can tap.

"I am the next RIM. I am the next Nortel. And I am standing in this room barely capitalized," said Andrew Kular, founder of Ecosol, referring to Canada's Research In Motion (RIM.TO) and Nortel NRTLQ.PK Networks. "Access to capital is a very real problem."

Ecosol produces a device called Powerstick that charges from a USB port in a computer and can then charge handheld devices ranging from cell phones to MP3 players. Kular is frustrated that he had to raise 90 percent of his capital in the United States for a product sold at Best Buy.

Part of the problem reflects a global credit crunch that followed last year's financial meltdown, but companies complain the Canada is overly conservative.

The problem is compounded by the country's size, said Claude Letourneau, chief executive of Vaperma.

"Canada is a very small market for us to exploit, so we have to export at a very early stage with very little resources," he said.

Quebec-based Vaperma has developed gas separation technology that can be used in ethanol production and treatment of biogas and natural gas.

Bankers, investors and executives agreed that Canadian government plays a key role in sparking investment with green-friendly policy that reduces investor risk.

Canada produces good talent and technology but, too often, companies sell their developments to bigger players in the United States, said David Henderson, managing director of investment at XPV Capital.

"In Canada, we're 300 million people short of a good market," he said. ($1=$1.04 Canadian) (Reporting by Susan Taylor; Editing by Frank McGurty)