Can the U.S. compete with China in the green economy?
Fred Krupp is president of the Environmental Defense Fund. The views expressed are his own.
It’s as though three mammoth challenges facing America are intertwined like the strands of a rope: reducing our dependence on Mideast oil; creating new American jobs from clean energy; and reducing pollution responsible for climate change.
Together, those strands are a lifeline to the future.
While the House of Representatives passed comprehensive energy and climate legislation last summer, polarization has created gridlock in Washington, paralyzing most major legislative initiatives, including clean energy.
But a new, “tripartisan” partnership has emerged in the Senate that offers a hopeful way forward.
The legislation being crafted now by Sens. John Kerry, Lindsey Graham and Joe Lieberman is garnering interest on both sides of the aisle.
It will create the certainty our businesses need to invest in a clean energy future, and it will send the signal to American and global investors that our clean energy economy is open for business.
It offers common ground and a good chance at securing bipartisan consensus on energy and climate legislation.
Senator Graham is one of the most conservative voices in the Senate, but he believes a bill is critical to American success in the future, in part because it will spark a new wave of job-creating investment and manufacturing here.
It will create certainty for businesses and investors, moving tens of billions of dollars to now stalled construction projects and mobilizing armies of workers to build them.
The Senator has expressed concern that if we stay on our current trajectory, China will capture most of these emerging jobs.
“Six months ago,” he said recently, “my biggest worry was that an emissions deal would make American business less competitive compared to China. Now my concern is that every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”
On another occasion last month, he put it more bluntly: “Every day we wait in this nation, China is going to eat our lunch.”
He’s right to be worried – a majority of Americans are worried too. A recent Washington Post-ABC News poll revealed that most Americans believe America’s role in the world economy will diminish in the coming years, and many believe “the 21st century will belong to China.”
The truth is, China is already beating the U.S. to clean energy jobs.
China is quickly becoming the global powerhouse in clean energy manufacturing and innovation, dwarfing the efforts of America.
Backed by huge investment and an industrial policy bigger than the world has ever seen, China has become the worldwide leader in new energy technology markets while the U.S. is quickly falling behind.
Last year, China passed Denmark, Germany, Spain, and the U.S. to become the world’s largest maker of wind turbines.
In the last two years, China also became the world’s largest manufacturer of solar panels, a technology invented and long dominated by Americans.
Wind and solar aren’t the only green technologies where China is advancing rapidly.
China is also leading in advanced vehicle and battery technology.
The Chinese firm BYD introduced the world’s first plug-in hybrid vehicle, and China’s production of lithium ion batteries accounted for 41 percent of the global market by 2008. The number of battery companies in China increased from 455 to 613 between 2001 and 2004.
China is also an emerging world leader in ultra-high-voltage, or UHV transmission technology, which reduces energy losses when electricity is transmitted over long distances.
China now has more than 100 domestic UHV manufacturers and suppliers, and the State Grid Corporation will invest $44 billion through 2012, and $88 billion through 2020, in building UHV transmission lines.
So how can America compete with China in the emerging green economy?
Along with Sens. Graham, Kerry, and Lieberman, I believe we can match the scale of China’s centralized industrial policy by fully deploying the engine of American prosperity: our marketplace. It is the only tool we have with the scale and capital to compete with China.
If the U.S. puts a limit on carbon pollution, we will send a clear signal to the marketplace that will unleash a massive wave of private investment in low-carbon energy sources and technologies like carbon capture and storage that would allow us to compete with the Chinese.
Only when American policy creates a profit motive for investors, inventors and entrepreneurs, will we have a chance to win the race.
President Obama recently made that case to the Business Roundtable, calling for a price on carbon to kick-start America’s efforts to win the clean technology race:
“A competitive America is also an America that finally has a smart energy policy. We know there is no silver bullet here – that to reduce our dependence on oil and the damage caused by climate change, we need more production, more efficiency, and more incentives for clean energy.
“But to truly transition to a clean energy economy, I’ve also said that we need to put a price on carbon pollution.”
The president expanded his commitment to ensuring that legislation passes this year, when he met with a bipartisan group of fourteen senators to discuss their concerns.
This is a sign of real progress – not only because the president has made climate and energy legislation a priority, but because Republicans and conservative Democrats alike are at the table, shaping that legislation together.
Photo shows the U.S. Capitol dome reflected in the glass roof of its underground visitor center in Washington, February 24, 2009. REUTERS/Jonathan Ernst