Did you know… that the US has a trade surplus with China in solar energy tech?
Kath Rowley, February 2012
I didn’t. Just one of many interesting things I learned at the China-US climate update event at Brookings on 2 February.
CPI-Beijing Director Qi Ye presented key findings from CPI’s Annual Review of Low Carbon Development in China. It’s always good to be reminded of how much China is doing, and not-so-good to be reminded of how much further they (and the world) have to go before we’re on a low carbon path. China’s CO2 emissions from energy have more than doubled since 2000, and more than trebled since 1990. Back in 1990, China’s emissions were less than half of the US’s. By 2009, China’s emissions were one third higher. And the gap is growing fast. China needs the most environmentally and cost effective portfolio of policies it can devise to turn this trajectory around.
Mark Muro from Brookings spoke about US energy policy. Not good news. He identified four key requirements for decarbonising the energy sector: regulation, stable demand for clean energy, finance, and continuous innovation. How’s the US doing? It has a partial and shaky policy framework (though some states are doing well), this is not catalysing strong demand, the whole development chain for clean energy is hard to finance (and with federal incentives expiring, the industry is heading into another bust), and while the US still has enviable early stage innovation systems, without sustained investment its innovative capacity will slip. “Other than that, we’re doing fine.”
Casey Delhotal from the US Department of Energy then talked about US-China energy cooperation. This cooperation is nothing new; it’s been happening since the 1970s. What is new is that China is now a “partner” in energy innovation – much like Japan and Europe. Long gone are the days where China was a junior player seeking help. This brings new opportunities: innovation requires the exchange of ideas, and collaboration will deliver benefits to both countries. But it brings challenges too. Trade disputes are getting lots of attention; intellectual property rights too.
Questions from the audience ranged from the role of natural gas to the prospects for a global (or at least G20) carbon tax; from the status of carbon capture and storage technologies to the loss of US manufacturing jobs to China. In responding to the last, Dr Delhotal reminded the audience that we live in a global economy. The US makes some things, China makes others. Value – including jobs – is generated along the way. In the case of solar technology, the US makes polysilicon and industrial equipment. China makes solar modules. The US installs equipment and generates clean energy. Overall, the US has a trade surplus with China in solar technology, and globally is a net exporter of solar energy products (to the tune of almost $2B in 2010).
Take outs for me? China will need to try new policy tools not part of its traditional toolkit. Trade and job dimensions continue to dominate US thinking on clean technology. And CPI could help China and the US achieve low-carbon growth by demonstrating – through real world examples – how we can all benefit from strong action on climate.