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"America, I am optimistic, will wake up and see the opportunity. And when it does, it still has the greatest innovation machine in the world," Chu said in a speech entitled "Our New Sputnik Moment."
Chu said the United States still concentrated on research in areas such as computers, defense and pharmaceuticals but that its funding for energy innovation was paltry.
By contrast, China, the world's largest emitter of carbon blamed for global warming, is working to build the world's most expansive high-speed rail network and has developed technology for the highest-efficiency coal plants.
"America still has the opportunity to lead in a world that will need essentially a new industrial revolution to give us the energy we want inexpensively but carbon-free," Chu said.
"But I think time is running out," said Chu, a Nobel Prize-winning physicist.
Chu, however, will enjoy little political leeway when he heads to Cancun, Mexico, where representatives of more than 190 countries on Monday opened two weeks of talks on drafting a new global treaty to stem climate change.
President Barack Obama last year went to the climate summit in Copenhagen where he pledged US action to curb carbon emissions along with assistance for poor countries hardest hit by rising temperatures.
The rival Republican Party, which swept November 2 congressional elections, is strongly opposed to a so-called "cap-and-trade" plan to require industry to cut carbon. Many Republicans argue that it is too costly in uncertain economic times, while some contest the science behind climate change.
Chu countered that climate action would benefit the economy by opening up a new field in green technology.
But Chu also defended potential costs. He likened climate skeptics to homeowners who are repeatedly told to change wiring but keep looking for electricians to tell them they do not need to.
"Do you actually go and you say, well, okay, that's a threat but I think it's more cost-effective -- I just make sure my fire insurance is up-to-date?" he said.
Two recent studies found that China's investment in green technology has outpaced that of the United States. But China has held firm in rejecting a treaty that would legally require it to cut carbon emissions.
The United States, backed by other developed nations, has insisted on a binding treaty, believing it is crucial to ensure global action -- and to win over support in Washington.
The Kyoto Protocol, which the United States rejected, asks only wealthy nations to cut carbon emissions. The requirements run out at the end of 2012.
The dispute has been tense at times. At UN-backed talks in October, China's chief climate negotiator, Su Wei, said the United States was like a "pig looking in a mirror" and finding itself beautiful.
Vaughan Turekian, chief international officer of the American Association for the Advancement of Science, said that the political dynamics have barely changed more than a decade after the Kyoto negotiations.
"The current climate summit process is unlikely to produce a global treaty that includes the United States as a signatory, let alone one that would stand any chance of being ratified by 67 senators," he said.
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