The Great Chinese Clean Energy Export Scandal


Photo Credit: Andreas Demmelbauer via Flickr/CC BY

The biggest story to break in the clean energy world in the last few days is certainly the allegation that China is breaking World Trade Organization rules by unfairly subsidizing its exports of renewable energy equipment and materials. An American union, the United Steelworkers, has filed a legal case with the Obama administration over the matter, claiming that Chinese policies are taking a toll on the domestic clean energy industry, and killing jobs. And there's a concern that while Chinese policies have undoubtedly made things like solar panels and wind turbines cheaper and more affordable, they may have created a bubble that's prone to burst and disrupt the market. But there's one thing that strikes me as glaringly absent from all the discussion engendered by this 'revelation': And that's just how inadequate US energy policy has been in aiding the development of a clean energy sector. Yes, China appears to be clearly and openly violating WTO rules by doing things like allotting extra land and giving financial assistance to aid its clean energy companies. From the NY Times:

much of China's clean energy success lies in aggressive government policies that help this crucial export industry in ways most other governments do not. These measures risk breaking international rules to which China and almost all other nations subscribe, according to some trade experts interviewed by The New York Times.
But China has long considered itself a developing country and therefore immune to such stipulations from the WTO -- that the nation's central government is subsidizing clean energy goods hardly comes as a surprise.

So if the United Steelworkers, or anyone else concerned that the US is losing clean energy market share to China, truly wanted to improve its prospects in the global renewables market, the priority should be fostering a hospitable environment for investment domestically. And that means enacting national policy that prices carbon, or at the very least getting a Renewable Energy Standard into place.

China's policies may indeed have some negative long term effects on the global clean energy marketplace -- if its subsidies prevent or discourage private international companies from investing in clean energy R&D; or new manufacturing capacity, for example, we may have fewer good clean energy equipment options on the table if and when China's bubble bursts. On the other hand, China's involvement in the industry also shows how ample support from the state can yield major gains, quickly, in a nascent and extremely important renewable energy industry.

Either way, the answer doesn't seem to be slapping a tariff on Chinese imports of clean energy equipment, and potentially risking a trade dispute in the process. We still want cheaper solar panels and the like, after all.

No, the clear answer is instituting a strong clean energy policy of our own.

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