Recent Presidential summit yields solid results
Recent clean energy deals with China are good for U.S. economic growth, writes Rebecca Lefton in this CAP cross-post. The next step is domestic policies that boost innovation and create jobs.
What shouldn’t be missed about Chinese President Hu Jintao’s visit to the United States this week are the deals cut on clean energy among U.S. and Chinese companies and continuing collaboration between the two countries. Cooperation on clean energy between the world’s two largest economies represents a win-win for the two countries. The clean energy agreements on technologies such as carbon capture and sequestration and natural gas provide billions of dollars in sales and export content. They benefit large and small U.S. companies while helping China grow in a more sustainable manner.
While this collaboration is undoubtedly good, the United States is slowly losing its competitive edge in clean energy technology. HSBC bank projects that the global low-carbon market will triple to $2.2 trillion by 2020 as investor uncertainty is replaced with optimism that governments around the world will seriously begin to tackle climate change. But it points to the United States as a “significant outlier” in establishing low-carbon growth policies because of its failure to pass clean energy and climate legislation amid conservative attacks in Congress, which threaten to roll back existing authority to limit pollutants through the Clean Air Act.
Lack of U.S. clean energy policies and threats to rollback existing regulations increase investor uncertainty and reduce domestic demand for these technologies. This threatens clean energy technology innovation in our country””to the extent that we may well miss this next industrial revolution. The United States can’t afford to fall behind in innovation and lose job-creating opportunities. We must strengthen and enact clean energy policies to drive demand and innovation so that we can remain competitive in this emerging worldwide market and boost domestic economic growth. China, Germany, and other countries are surging ahead in the clean energy race.
In short, the United States is falling behind. Cooperation with China is a positive step, but it isn’t enough. We also need to compete by matching the carbon-related reforms now being undertaken by other nations.
U.S.-China agreements total $45 billion in increased exports
Before detailing those imperatives, however, let’s look at what we gained this past week. Leading up to President Hu’s visit, U.S. and Chinese companies approved cooperative agreements, many of which accelerate clean energy technology. They are worth over $45 billion in increased exports. General Electric Co., for example, signed a joint agreement for gas turbines in China resulting in $500 million in sales and generating $350 million in U.S. exports.
The commercial agreements coincided with the expansion of partnerships on clean energy and climate between the United States and China that were announced in November 2009. Notable is the signing of joint work plans that establish a research agenda for the $150 million U.S.-China Clean Energy Research Center focusing on energy efficiency, clean coal, and clean vehicles.
U.S.-China clean energy collaboration will generate economic growth
The White House estimates that the recently announced U.S.-China deals will help support 235,000 jobs in the United States. But there are many other opportunities for job creation through cooperation.
The Center for American Progress, for example, found that U.S.-China cooperation to accelerate deployment of carbon capture and sequestration technology could create as many as 940,000 direct and indirect jobs in the United States by 2022.
A recent “U.S.-China Clean Energy Cooperation Progress Report” by the U.S. Department of Energy summarizing cooperation with China underway concluded, “Our clean energy partnership with China can help boost America’s exports, creating jobs here at home, and ensure that our country remains at the forefront of technology innovation.”
The United States risks losing more of the clean energy market share to China
But the United States needs to do more at home. Ernst and Young ranks China as the world leader in the global renewable energy market. This is in large part because of its clean energy policies that are rooted in an understanding that investments in low-carbon technologies will lead to economic prosperity and energy security.
The United States does not have these kinds of policies in place. We need an energy policy with a strong manufacturing component to maintain our leadership position in technology innovation. This is critical to economic growth and job creation. Private investment in low-carbon technologies and business growth won’t happen without demand for clean energy. A clean energy standard or Environmental Protection Agency regulations can provide that demand.
Some want to move us in the opposite direction, however. The Republican Study Committee, for example, is proposing several damaging budget cuts, including ending the Manufacturing Extension Partnership program, or MEP, to save $125 million annually. This is short-sighted. MEP helps small and midsize companies enhance energy efficiency and creates or saves 50,000 manufacturing jobs per year. Similarly, conservatives want to gut applied energy research at the Department of Commerce and block the Environmental Protection Agency from keeping our air clean.
Policies that would keep us the leader in the clean energy race
Instead of killing MEP, cutting innovative research and turning back the clock on environmental laws, Congress should maintain, extend, and enact policies that will give the United States a competitive edge in the worldwide low-carbon market.
These include but are not limited to the following:
- Increase funding for the MEP program
- Extend the manufacturing tax credit, or 48c, with an additional $5 billion in tax credits to help manufacturing companies become more energy efficient
- Eliminate wasteful tax breaks for oil companies and spend the $45 billion saved on research, development, and deployment of clean energy technologies
- Create a Clean Energy Deployment Administration, or “Green Bank,” to reduce the risk of clean energy investment and accelerate the manufacturing and deployment of clean energy technologies
- Establish CLEAN contracts incentivizing investment in renewable energy generation with long-term fixed-rates contracts
- Preserve demand certainty for clean energy technologies through the Environmental Protection Agency’s regulations of greenhouse gases and other pollutants
- Restore funding to the Department of Energy’s loan guarantee program, which is necessary for the development of clean energy technologies
Taking these steps would ensure not just a more competitive U.S. economy and robust future jobs growth but also a cleaner planet.
– Rebecca Lefton is a Policy Analyst at American Progress.
See also:
- Out of the Running? by Kate Gordon, Julian L. Wong, and JT McLain
- Rising to the Challenge by Kate Gordon , Susan Lyon, Ed Paisley, and Sean Pool
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Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
Uh, Joe, nice cheer leading… OTOH, oil sands and Fischer-Tropsch technology ain’t clean energy. Nor is nuk-le-ar.
[JR: I don't get this comment. I thought this was a pretty solid, informative post. Do you really not want such analyses here? I think CP's views on the tar sands -- NOT "oil sands" FYI -- and nuclear have been stated over and over again, and will be stated again many times. First rule of blogging: you just can't put everything in every post.]
I wonder if the two countries’ leaders ever talk frankly about the challenges in overcoming their own fossil fuel interests. If they are still talking about carbon capture- which, even if it works, makes coal more expensive than clean energy- it appears that they are still shackled.
Until leadership in both countries announces intentions to not just “phase out” coal and oil, but to do so aggressively in the near term, global emissions will increase. Political challenges in the two countries have both similarities and differences, but the test will be to see if a leader emerges who understands our peril, and acts courageously to do something about it. Current leadership in both China and the US has been weak and uninspired here. Let’s just hope that the right people step up before it’s too late.
I also question the ‘carbon capture and storage’ bandwagon. I suppose that might be good for companies who use it to extract more oil or who are selling the technologies but as Mike points out the jury is still out as to whether it will work in the long term. In fact there was an item on CBC recently about a Saskatchewan farm that apparently has high levels of carbon dioxide in the soil that matches the carbon dioxide the oil company has been injecting. The oil company says there is no leak…
I share the skepticism concerning CO₂ sequestration. One might imagine fossil fuel electrical energy generation being coupled with CO₂ capture at the same locations where electrical energy is generated via renewable sources (wind farms, solar arrays) at different times of day or night. Were it then feasible to electrochemicallly convert such CO₂ into hydrocarbons using energy generated from the renewable source, then one might preserve a role for limited fossil fuel use. But that’s a lot of big ‘ifs’. I very much doubt sequestration will ever be worthwhile.
Almost daily container ships arrive from China full of STUFF and go back mostly empty. (Money is transfered electronically) The US then borrows money at interest from China to buy Fossil Fuel, again mostly imported, to burn in traffic and trash out our environment. (Which is cost effective because pollution disposal is FREE.) All this while we have dollar bills falling from the sun and blowing in the wind that we will not even gather because there is more money to be made for some Fat Cats in money transfers.
Very Strange.
Thank you, GOBP…
I think the carbon capture and storage agreements were very positive, and they give me hope for the future.
Nothing but carbon capture and storage coupled with biomass energy can make the math come out right, unfortunately. We’ve got hundreds of billions of tons of carbon that need to go back underground in order to stabilize the climate system, and noting but the coal fired power plants, massively converted to biomass and charcoal, are capable of moving that much carbon.
We ought to move massively to BECCS- subsidize it if necessary, but do it.
BECCS (BioEnergy with Carbon Capture and Storage) could actually put climate genie back in the bottle, by transferring carbon from the biosphere back underground. All of the other alternatives are like trying to drain a bathtub by running water into it more slowly. BECCS transfers carbon back underground, and drains the tub.
It’s looking like the climate sensitivity is much greater than we thought…the greenhouse effect was being masked by aerosol based global dimming, for crucial decades.
It’s all happening much, much faster than predicted.
It’s either BECCS or a mass extinction event, IMO.
Wikipedia – BECCS
The Royal Society estimates we can get a 50-150 ppm CO2 reduction out of BECCS, but really, we can get as much reduction as we want. But the rate of reduction is limited by the capacity of the converted BECCS plants…so we need to start now.
I was aiming my critique at the Obama Administration, to include the Chooster. I support the long-standing CP position on nuclear power and evolved position on tar sands.
Since you were on the inside, you are aware of what a political football such a program funding announcement is. Given the forthcoming all-out plutocrat onslaught on clean energy funding, such cheery infomercial seems misleading.
Could the long obvious delay tactics by the GOBP be nothing but a ruse to bide time while their Corporate Lawyers and Capitalists Investment Barons figure out how to preposition themselves and/or corner the market?
It might even be considered a business expense and deductible.
Under the new tax structure…???
COMMENT OF THE DAY- CHINA IN PROSPECTIVE
[Comment by Hsun Tze – (www.Chinadaily.com.cn.)]
I [Hsun Tze- Master Hsun]would rather describe Sino US relationship as that of important stakeholders rather than partnership.
It is not that of adversaries nor true friends. It is neither here nor there but the relationship is vital to the world as both are big and powerful.
Perhaps the relationship can be better if the USA learns to have real mutual respect and acceptance that there is equality in the relationship. If there is any benefit than it should be for the world to enjoy and not just the two powers.
So far, the USA has shown itself wanting to be the leader in the world. It wants to be the policeman as well as the judge and arbitrator. As long as this exists, there can be no genuine partnership. China cannot be a second Japan who have to listen to what the USA master say. China is a sovereign country. It must stand up and do the righteous thing, uphold its dignity and go for peace but never fear war.
If the USA can bring itself down to Earth and accept that all countries have their own ways of doing things (i.e. a live and let live policy) then partnerships can be a reality.
The ball is in the US court.
HERCULE TRIATHLON SAVINIEN
“Eliminate wasteful tax breaks for oil companies and spend the $45 billion saved”
That dollar reference is to an estimated period in the US of ten years. Also, if all mined fuels are included then this would be a low figure on an order of magnitude, without considering external subsidies.
“Create a Clean Energy Deployment Administration”
I saw no definition of the term “Clean.” It would seem that all uranium and fossil related financing should be ruled out. Also, to be more effective the funding might be administered to residences and smaller businesses primarily. The opportunity for building retrofits and all other efficiency and distributed generation upgrades are tremendous, without even considering centralized generation. In this context, involving “clean coal” or atomic fission in taxpayer funding would be yet further financial waste.
Gr8 piece! Just was wondering about the 45 billion in oil and coal subsidies…is this a conservative number? I thought that US annual subsidiess to fossil fuel companies was greater than this amount.
Thanks,
Stacy Clark
Dallas
It is certainly good that the Chinese are more concerned with co-operation and mutual benefit than to be insulted by the aggressive contempt and abuse that Hu encountered from various Demopublican and Republicrat homunuculi in Washington. Unfortunately we are past the stage where carbon sequestration can be seen as anything but a waste of time and money. Every cent spent on this boondoggle is wasted money that would better be spent on solar, wind, biomass, tide, wave etc. We have all the energy we will ever need streaming out of the sun, perpetually, at least as far as our species is concerned. That it is not properly utilised is solely because the vested money interest in fossil fuels is the greatest source of money and hence power on the planet. Even the Chinese, who are acting far more rationally, still seem to think that there is time left to burn coal, which, in my opinion, is a fatal error.