U.S.-China Competition for Clean Energy Jobs: A Zero-Sum Game?
As the world moves toward clean energy alternatives, companies in the United States and China are working to develop new, more cost efficient manufacturing processes and increase their shares of their domestic and export markets. Controlling production lines and growing market share will certainly have important economic implications for both countries in the short and long-term. However, a broader perspective suggests that cooperative initiatives to increase the capacity and reduce the cost of renewable energy technologies may produce benefits on both sides of the Pacific over the longer term by reducing the reliance on fossil fuels and helping achieve global carbon reduction goals.
On Friday, June 11, 2010, the Wilson Center on the Hill and the China Environment Forum co-hosted an event featuring John Romankiewicz, Senior Analyst for China Clean Energy and Carbon Markets at Bloomberg New Energy Finance, and Ethan Zindler, Head of North American Research at Bloomberg New Energy Finance, to consider big picture implications for U.S.-China clean energy cooperation and development. The event was moderated by Jennifer Turner, Director of the China Environment Forum.
Coming from an investment background, Zindler emphasized that he looks at clean energy development, "not as a social project, but as an industry." The end goal, he asserted, is to produce clean energy more cheaply than fossil fuels. He argued that if clean energy remains prohibitively expensive and uncompetitive without subsidies, it will be more difficult to implement and less likely to produce the desired environment benefits.
Romankiewicz then discussed China's current supply and growing demand for clean energy. He pointed out that China's power grid has grown by more than 70 gigawatts per year during each of the past 5 years and that "at some point next year, the total installed capacity of China's grid will surpass that of the United States." While coal and hydro power continue to play a significant role in meeting this growing demand, Romankiewicz noted that China also has set ambitious investment targets for wind farms, solar farms, biomass power plants, and other renewable energy sources to help meet the growing demand.
China is investing in clean energy not only to serve growing domestic energy demands, Romankiewicz asserted, but also seeks to be a major force in the international market. China has already made impressive advances in clean energy industries: of the top fifteen wind producers, four are Chinese while only two are American, and of the top ten crystalline-silicon solar cell producers, six are Chinese. China is focused on becoming a major player in exporting clean energy technologies. Romankiewicz argued, however, that breaking into the American market could prove exceedingly difficult given the stiff competition from domestic and foreign firms.
Beyond outlining statistics, the speakers strongly emphasized the importance of understanding the nuances and grasping the bigger picture as well. Zindler pointed out that the economic implications are far deeper and more complex than the obvious gains, primarily an increase in the availability of construction jobs, from manufacturing and exporting clean energy modules. "If the Chinese are helping to drive down the cost... then they make solar less expensive...which means you can create more jobs in California or New Jersey...." Romankiewicz urged caution when reading "the made in China" label on clean energy technologies, as the process chain can be global and complex with parts coming from all over the world.
Though he maintained that focusing on the long term benefits of clean energy investment in the United States would prove beneficial, Zindler was intent on keeping the issue in proper perspective and advocated for a modicum of urgency. "I think a lot of opportunity would be missed potentially because there is innovation that doesn't just come from a lab but comes from building newer and newer assembly lines..." Zindler also emphasized that "this is a marathon, not a sprint. We've got a long way to go to determine who the winner will be in the clean energy race here."
By: Joshua Nickell
David Klaus, Consulting Director, Wilson Center on the Hill
Kent Hughes, Director, Program on America and the Global Economy