China plays dirty with clean energy

While states such as Nevada struggle to develop their clean energy potential, China has become a center for clean energy manufacturing. It will produce more than half the world’s solar panels this year, and more than 95 percent of them will be exported to the United States, Germany and other countries. But China may be operating under an unfair advantage.

The New York Times reports that though low labor costs and a large pool of educated engineers in China help contribute, the country’s success with the renewable energy industry mostly is due to aggressive governmental policies, including heavily subsidized land and loans for exporters.

America is no stranger to subsidies—just ask a corn farmer. But at issue is China’s apparent violation of World Trade Organization rules that ban nearly all subsidies to exporters. China’s policies could be challenged at the WTO’s tribunals in Geneva, and if China fails to remove its subsidies on exports, the United States and other countries could impose tariffs on them.

China’s “business friendly” practices have helped fuel the clean energy market, lowering prices worldwide on solar panels and wind turbines, but that can come at the expense of U.S. jobs. The NYT notes this example:

“Evergreen Solar of Marlboro, Mass., plans to move the final manufacturing steps for its solar panels from Devens, Mass., to China next summer, eliminating 300 American jobs, after struggling to borrow money in the United States and after finding that costs in China were lower.”

While China may get its hand slapped, it’s still dominating the clean energy market, making some wonder if the United States could learn something—within the rules—from China. While China is giving land away, making loans easy for clean energy upstarts and providing an educated workforce, the United States is arguing over carbon pricing and a Renewable Energy Standard. An RES requires utilities to get a percentage of their energy from renewable resources.

“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,” writes Brian Merchant on Treehugger.com. “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.”

Meanwhile, the Center for American Progress ranked Nevada fifth of 10 states with the most “market potential for future energy efficiency development,” highlighting Nevada’s Renewable Portfolio Standard, which is doing statewide what an RES would do on the federal level.