CAP goes to China to investigate its clean energy investment strategy
Much has been written over the past year about how other countries, particularly China, are investing heavily to increase their economic competitiveness by building domestic clean energy industries (see Lindsey Graham: “Every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy”).
Senior staff from the Center for American Progress will therefore be traveling to China to meet with policymakers and companies that are driving its aggressive pursuit of clean energy technology development. They’ll share their findings with you on the CAP energy policy page. Guest Blogger Julian L. Wong has the background on China and the trip.
At least three studies were released this past month alone about China’s clean energy investment. A report from Pew Charitable Trusts, using data from Bloomberg New Energy Finance, declared China the early winner in the clean energy race by outspending the United States $34.6 billion to $18.6 billion in 2009. And while it’s true that decarbonizing our economies requires significant financial investments, it will not happen simply by throwing money to the wind. Deutsche Bank’s global survey of national clean energy policies highlights China, Brazil, and Germany for their exemplary scale and effect. And our own report “Out of the Running?” discusses how Germany, Spain, and China are adopting comprehensive policy approaches to clean energy by developing markets, building infrastructure, and financing research and deployment projects.
China recently identified alternative energy as a “key industry” that it would actively support in its next five-year economic development plan. This move is wholly consistent with China’s push for the new and more sustainable kind of development pathway that they call “scientific development.” As we discussed in “Out of the Running?,” China has created powerful top-down policies such as national clean energy and energy conservation targets, and more recently a goal to limit growth of carbon emissions. These top-down policies are supplemented by local incentives and investments to stimulate the innovation, manufacture, deployment, and export of low-carbon technologies.
These concerted efforts have yielded concrete results in renewable energy deployment, enhanced energy efficiency, and pushed the creation of new rail and grid infrastructure. China already boasts the world’s fastest high-speed train in operation, has developed the world’s leading technology for ultrahigh-voltage grid transmission wires, and is on track to become the largest producer and user of solar panels.
These developments will reduce the Chinese economy’s carbon intensity while significantly boosting job creation. China employed 1.12 million people in clean energy sectors by 2008, according to the Chinese Renewable Energy Industries Association. This number is small compared to a labor pool of 700 to 800 million, but it is forecasted to grow significantly over the next decade. A study by the Global Climate Network in conjunction with the Research Center for Sustainable Development at the Chinese Academy of Social Sciences projects that the combination of policies and investments in clean energy industries can create up to 6.79 million new jobs in the country by 2020.
The speed and extent to which China has raced ahead to invest in green technologies is worthy of envy. Yet the many recent media stories come up short in explaining just how the Chinese government is coordinating this massive push.
The CAP trip, which will include Sarah Wartell, Kate Gordon, Michael Ettlinger, Sarah Miller, and myself, is a fact-finding mission to three northeastern cities in China to see how national policy is intersecting with researchers, businesses, and leaders at the local level. We will start in Beijing, the nation’s capital and the heart of national energy policy decision making, and make day trips to Tianjin, a relatively new and rapidly growing national economic development zone, and Baoding, a city in neighboring Hebei province that has gained attention for its strategic emphasis on clean energy industries.
As we travel, we will hope to address a slew of questions, including:
- What lessons can the United States successfully draw from China””given the very different political-economic architecture””to develop its own domestic strategy for developing a clean energy economy?
- What challenges have the Chinese faced as they seek to expand the share of clean energy in their overall energy mix?
- How well are the central government’s top-down national policies implemented at the provincial, municipal, and local levels? What mechanisms do they use to ensure and enhance implementation?
- How do the public and private sector deal with the sheer capital intensity of clean energy projects? What channels exist to access the significant volumes of financing needed to build new energy infrastructure?
- What specific local incentives does the Chinese government employ in locating manufacturing or research and development centers? Does qualification for these incentives differ between domestic and foreign companies?
- What is the country investing in work force training and education? Is there a government strategy that considers the human capital requirements of a low-carbon transition? What role do different Chinese educational institutions play?
- How does China negotiate the tension of welcoming foreign investment and technologies while maintaining homegrown innovation? How are some Chinese companies partnering with foreign companies to strengthen their competitiveness?
We will log our findings and impressions as we meet with central government and municipal-level government officials, top energy policy and technology researchers, and executives from leading Chinese and foreign energy technology companies. The Google map on this page will be updated regularly and track our progress as we travel through Beijing, Baoding, and Tianjin.
We may not be able to get definitive and comprehensive answers to all our questions, but we are hoping that we will at least start the conversation on these topics””a conversation that is vital if we are serious about America’s own economic competiveness in the clean energy sector.
Join us on our journey and check back to this page for daily updates, or follow us on twitter live from China by subscribing to the hash tag #cappek
– Wong also blogs on Chinese energy and environmental issues at Green Leap Forward.