Third Way's Josh Freed takes a look at what Republican budget cuts might mean for America's ability to compete in the burgeoning clean energy sector. It's not pretty.
Over at the Huffington Post, Josh Freed, the Director of Third Way's Clean Energy Program, takes a look at what the Republican plan to cut 20% of all non-defense discretionary funding might look like if spread equally across clean energy programs. It's not pretty:
-- A $1.6 billion cut in the federal loan guarantee program would potentially cripple the much-needed nuclear renaissance at a time when China is planning a five-fold expansion over the next decade. Without loan guarantees, it's unlikely we'd be building first nuclear power plant in the US in almost 30 years, and creating as many as 3,500 jobs, in Georgia today.
-- $60 million less for ARPA-E's already meager $300 million budget, gutting funding for advanced energy storage, next generation nuclear power and micro-battery technology that could also be used by the US military.
-- Eliminating almost $500 million in grants to companies innovating in renewable energy, advanced vehicle technology, and battery storage. This could kill emerging clean energy businesses that have the potential to become the 21st century's Google, General Electric or Exxon.
-- Slicing $20 million from R&D investments to schools like Purdue University, Penn State, University of Wisconsin, and Iowa State University, which are developing the next generation of innovators and ideas that could spawn new businesses and jobs across the U.S.
As Freed notes, even well known and well respected conservative commentators like George Will are warning Congressional Republicans to exchange their budget hatchets for scalpels and preserve or even strengthen key science and technology investments.
Clean energy is certainly one of the global growth sectors that could help lead an industrial revival in the United States. But Republican budget cutting mania could hamper U.S. competitiveness in the sector even as other nations like China, Japan, and South Korea increase their investments. Will Innovation Conservatives be able to forestall such an outcome?
Earlier this month, China surpassed Japan as the world's second largest economy and since, has snared a flurry of clean tech headlines that collectively tell a very clear story: China is rapidly and effectively securing its position as a global clean technology leader as the U.S. watches in stagnated wonder.
Below we've aggregated some of the most important updates coming out of China over recent weeks as it surges to the front of the global clean technology sector:
A recent collection of nuclear news over at the Energy Collective suggests that Japan and South Korea are taking major steps to sign lucrative nuclear deals - with relatively little competition from Westinghouse or Areva. And China is planning to increase nuclear capacity nearly eight-fold by 2020 by building reactors locally using Westinghouse AP1000 technology.
Arising out of the debates surrounding clean technology and the economic recession, is the nagging question: can the U.S. continue to lead in high tech innovation without domestic manufacturing? Increasingly, it seems, the answer is "NO" -- a response that carries serious implications for clean tech innovation and economic growth in the U.S.
Political confusion surrounding "green" jobs, clean tech, and outsourced manufacturing (largely to Asia) has caused those looking to clean energy as the next U.S. growth sector and those seeking to raise the U.S. out of a growth-numbing recession to lose sight of what has fueled U.S. technological and economic leadership in the past - public support for innovation and large scale high tech manufacturing. Recently, Alexis Madrigal posed the critical question arising from this confusion to the readers of the Atlantic: "Can the US Innovate Without Manufacturing?"
As Breakthrough and numerous high tech leaders argue, the answer is "NO."
By re-thinking how the federal government can foster innovation and competitiveness in clean energy, from education and research to commercialization and production, the United States can once again become a global leader in clean energy technology.
By Jesse Jenkins, Mark Muro, and Rob Atkinson, originally at the New Republic
Having passed the U.S. House of Representatives on May 28th, the America COMPETES Act, America's flagship competitiveness legislation, will soon be debated in the U.S. Senate. The Act was originally passed in 2007 in response to mounting concern that the United States was failing to effectively compete economically with other nations, imperiling the nation's future prosperity.
Now, a new outbreak of anxiety has engulfed the nation's competitive standing particularly as regards the nation's fledgling clean energy industry. Presently, the United States lacks an effective strategy to compete in this high-growth industry, which is expected to surpass $600 billion globally by 2020. Fortunately, the America COMPETES reauthorization offers a key opportunity for Congress to strengthen U.S. clean energy competitiveness.
Politicians talking about clean energy jobs like to claim "they can't be shipped overseas." From President Obama's State of the Union to Rep. Ed Markey stumping for the climate bill he co-authored with Rep. Henry Waxman, the promise of new "green jobs that pay well and can't be outsourced" is an all too common refrain.
The only problem with it is that it's wrong on its face.
America is already exporting clean energy jobs -- or seeing them created abroad in the first place. After pioneering wind and solar power, electric cars, and nuclear plants, America turned its back on the public investments in cutting edge technology that catalyzed these innovations, forfeiting cleantech industries to foreign countries who did not make the same mistakes. The cap and trade program at the heart of the climate bill authored by Rep. Markey may help create more clean energy jobs overseas, but it won't bring those jobs back to America. Conventional responses to today's competitiveness challenge won't cut it. Here's what will...
During a panel hosted by Waxman-Markey proponent, Center for American Progress, ITIF president Rob Atkinson argued that cap and trade was not sufficient to catalyze a clean energy future, proposing instead, policy focused on public investment in innovation to make clean energy cheap and abundant.
Speaking at a panel on building a clean energy economy, ITIF President and "Rising Tigers, Sleeping Giant" co-author Rob Atkinson declared that current technologies are not enough to create a competitive domestic clean energy industry and that major investments in energy innovation are necessary to make clean energy cheap and abundant.
Accelerating U.S. clean technology innovation, manufacturing, and market creation has become not just an environmental necessity but an economic imperative. A presentation and essay by Jesse Jenkins and Devon Swezey.
Current climate legislation in Congress, with its low price on carbon, ineffective renewable electricity standard, and collection of efficiency regulations, will not be enough for the United States to catch up to countries like China in building the clean energy industries of the future. Without a clean energy competitiveness strategy that can competed with those implemented around the world, America will lose out on one of the greatest economic opportunities of the 21st century.
By Jesse Jenkins and Devon Swezey
Accelerating U.S. clean technology innovation, manufacturing, and market creation has become not just an environmental necessity but an economic imperative. A recent Pew study showed that the global clean energy industry has experienced rapid investment growth over the last five years. New clean tech investments in 2009 reached $162 billion, which is expected to grow 25 percent to $200 billion in 2010. With the global clean energy economy emerging as one of the largest economic opportunities of the 21st century, government policy and public investment will be critical determinants of which countries come out on top in the race to attract private sector investment in clean energy technologies.
The United States is currently behind other nations in this race, and lacks an effective national strategy to compete. Climate legislation proposed in Congress to date, with its low price on carbon, ineffective renewable electricity standard, and collection of efficiency regulations, will not be enough for the United States to catch up to countries like China in building the clean energy industries of the future. To regain leadership in the global clean technology industry, the United States must enact a comprehensive clean energy competitiveness strategy that prioritizes major public investments in clean energy innovation, manufacturing, market development, education, and infrastructure.
This was the topic of a presentation we gave at the World Energy Technologies Summit in New York City last month. The theme of the conference, which was sponsored by TIME Magazine, was providing a "Reality Check" on the current state of energy technology and policy. The two of us therefore presented a wake-up call about America's lagging position in the global clean energy race, uncovered the realities behind several common myths about U.S. clean energy competitiveness, and outlined what the United States government must do to truly compete for the clean energy industries and markets of the future. After the video of our presentation below, this post summarizes each of these three key topics.
Highlighting China's rapidly developing economy and even more rapidly developing energy sector, John Fleck at the Albuquerque Journal highlighted Senator Jeff Bingaman's (D-NM) reflections on the clean energy race after his recent trip to China:
But this is about more than just meeting China's internal needs, according to Sen. Jeff Bingaman, D-N.M. China sees green energy -- wind, solar and the like -- as the global growth industry of the 21st century. And it aims to dominate this new global market.
"The Chinese government has determined that this is an area of substantial opportunity for them," said Bingaman, chairman of the Senate Energy Committee, in an interview last week after returning from a week-long fact-finding trip to learn more about what the Chinese are up to.
If the United States does not respond, we risk losing out on a major global economic growth opportunity, Bingaman said.
Fleck expands on China's clean tech progress, citing our report, "Rising Tigers, Sleeping Giant" and quoting Breakthrough's Director of Climate and Energy Policy, Jesse Jenkins:
Some 200 green energy firms are now located [in Baoding, one Chinese clean energy cluster], according to Jesse Jenkins, an energy policy analyst at the Breakthrough Institute, a California think tank. Jenkins and his colleagues published a report last fall arguing that China and other Asian economic powers are "set to dominate the clean-energy race by out-investing the United States.
Breakthrough Project Director Devon Swezey discusses the growing clean tech investment gap between the United States and China and what it means for U.S. competitiveness in the global clean energy sector.
Devon Swezey, Project Director at Breakthrough Institute, appeared on KPFA radio's Morning Show today to discuss the growing clean tech investment gap between China and the United States, and what the United States needs to do to regain some leadership in the burgeoning clean tech industry.
The segment with Morning Show host Brian Edwards-Tiekert begins at the 22 minute mark. You can listen below or click here to download an MP3 of the segment.
As we projected in "Rising Tigers, Sleeping Giant," the latest Pew report finds that China has a commanding lead over the rest of the G-20 in clean energy investment:
"Even in the midst of a global recession, the clean energy market has experienced impressive growth," said Phyllis Cuttino, who directs the Pew Environment Group's Global Warming Campaign. "Countries are jockeying for leadership. They know that investing in clean energy can renew manufacturing bases, and create export opportunities, jobs and businesses."
"The facts speak for themselves," said Bloomberg New Energy Finance Chief Executive Michael Liebreich. "2009 clean energy investment in China totaled $34.6 billion, while in the United States it totaled $18.6 billion. China is now clearly the world leader in attracting new capital and making new investments in this area."
Countries with strong nationwide policy frameworks, including renewable energy standards, carbon markets, priority loans for renewable energy projects and mandated clean energy targets, such as China, Brazil, Spain, United Kingdom and Germany, have the most robust clean energy sectors as a percentage of their economies. Countries without such policy frameworks including the United States, Japan, and Australia lag behind.
"The United States' competitive position is at risk in the emerging clean energy economy," said Cuttino. "Our nation has a critical choice to make: pass the federal policies necessary to position us as the world leader in the large and growing global clean energy market or continue to watch as China and other countries race ahead."
For those who need a reminder, those steps include:
1) Significantly increasing investment in clean energy innovation by making a sustained commitment to research, development, and demonstration (RD&D).
2) Spurring the adoption of innovative manufacturing processes and accelerating economies of scale in U.S. clean energy manufacturing.
3) The U.S. government actively supporting, through targeted public policy and investment, the acceleration of clean energy deployment and market creation in order to reduce the price of promising clean energy technologies and encourage their widespread adoption.
CBS profiles the state of the clean energy race between the United States and China. The result is not pretty. In order to stay in the game, the U.S. government policies should support technological innovation and highly efficient manufacturing, according to the CBS report.
The CBS Evening News has profiled the U.S. position in the global clean energy race for a segment called, "Where America Stands," and unsurprisingly, America stands behind China and other nations in developing and producing the technologies that will underpin the tremendous growth of the global clean energy sector over the coming decades.
CBS correspondent Celia Hatton reports, "China is the country cashing in on the green revolution." The video echoes the findings of a recent report on clean tech competitiveness by Breakthrough Institute and the Information Technology and Innovation Foundation, "Rising Tigers, Sleeping Giant," which notes that other countries have surpassed the United States in the production of virtually all clean energy technologies, from solar and wind, to nuclear and high-speed rail.
Hatton reports that China also dominates manufacturing in other "eco-products" like electric bikes, solar hot water heaters, and electric vehicles.
What should the United States do to stay in the game?
Some have argued that all the United States needs to do to stay competitive is to put a price on carbon, and wait for the market to do its magic. But CBS takes a closer look at what's needed to compete: "In the long-term, experts say U.S. government policies should build on America's strengths: technological innovation and highly efficient manufacturing to compete with China's unbeatable wages." Investing in clean technology research and development is particularly critical since other countries, including China, are moving quickly to close the innovation gap with the United States.
Without such investments, the new clean energy technologies may not just be manufactured in China, but invented there, too.
This piece was written by Michael Shellenberger and Ted Nordhaus of the Breakthrough Institute and Charlie Gay of Applied Materials, and originally published in the Austin Statesman. Applied Materials is the world's leading manufacturer of the equipment used to produce solar panels.
Charlie Gay, Michael Shellenberger and Ted Nordhaus, Special Contributors
A race is on to lead in the burgeoning clean energy sector. While the United States might be behind for now, we are far from the finish line.
America once led the global solar business, but manufacturing scale is shifting to Asia. Strong, targeted government incentives supported markets for solar technology in Japan, a country almost completely dependent upon imported energy.
At the same time, public investment in research and innovation helped build the technical prowess needed to establish solid manufacturing capabilities. The Chinese government, along with numerous entrepreneurs, is developing manufacturing and technical capabilities for solar and other clean energy technologies that will combine economies of scale with a growing market, which many project could be the largest in the world in five years.
Asia's current momentum is not exclusive to solar power. A Breakthrough Institute report, "Rising Tigers, Sleeping Giant," found that America lags behind Asia's rising "clean tech tigers" -- China, South Korea and Japan -- in producing virtually all clean energy technologies, from wind to nuclear power, from high-speed rails to plug-in hybrid cars and the advanced batteries that power them.
The governments of these three nations are expected to invest more than $500 billion over the next five years to extend their lead in clean technology products and applications. That's enough to out-invest the U.S. by a 3-to-1 margin unless this country establishes a national clean energy competitiveness strategy. Devising a strategy and fulfilling the vision is feasible, and there is historical precedent to prove it.
When the U.S. faced global competitors willing to invest enormous sums to dominate defense and information technologies during the Cold War, the nation's response was bold and proactive.
Our government introduced procurement programs, policies and incentives that provided strong demand for emerging information technology, semiconductor and computing technologies, while U.S. investments in research and education provided the human capital needed to block the threat. These investments sparked the IT revolution and helped create economic clusters such as Silicon Valley that have given the U.S. an enduring competitive edge.
Today, government investment is determining the location of the new "Silicon Valleys" of clean technology -- in China. One Chinese city, Baoding, is home to more than 200 renewable energy companies. Dubbed "Electricity Valley," the city is a national clean energy hub, linking manufacturing to research institutions and public policy.
In contrast to the investments made by the U.S. government during the Cold War era, the U.S. response to today's clean energy race has not been mobilized, threatening the promise of a new wave of American prosperity fueled by emerging clean energy industries and jobs.
On Jan. 8, President Barack Obama announced $2.3 billion of funding from the economic stimulus for the "domestic manufacturing of advanced clean energy technologies," according to an administration official. While these steps toward a clean energy economy are potentially consequential, energy and climate legislation working its way through Congress is more focused on limiting pollution than continuing the investments needed to secure our nation's competitiveness.
We need an integrated strategy, combining the insights and vision of industry, government, academia, utilities and consumers. This approach will facilitate the investment climate required to ensure stability and long-term demand for renewable energy.
There's room for another "Silicon Valley" of clean technology outside of China. The U.S. can close the investment gap with Asia and provide direct support for its clean tech research and innovation, manufacturing capacity and domestic markets if we pursue a long-term national clean energy competitiveness strategy. Robust and targeted public investments such as the ones committed recently by Obama can pave the way to a new era of U.S. technology leadership and economic prosperity -- but only if we act now.
Gay is president of Applied Solar at Applied Materials. Shellenberger is president and Nordhaus is chairman of the Breakthrough Institute.
China is leading the global race to make clean energy, yet some observers are denying that there is a race at all. They are wrong. Neglecting to acknowledge the economic stakes in the clean energy race and failing to develop a strategy to compete are the reasons why the United States finds itself behind today.
Over at Green Chip Stocks, clean tech market analyst Nick Hodges asks, "Who's Winning the Clean Tech Arms Race?" The answer shouldn't surprise you. Nick cites the deficiencies in U.S. clean energy policy in relative to China's policies as a major reason that "the global clean tech game will be dominated by Chinese players for the foreseeable future."
With Chinese manufacturers poised to dominate emerging clean tech markets, where are all those green jobs that the Democrats have promised? Many of them are going to China, writes SUNY history professor Judith Stein in a recent op-ed in the Philadelphia Inquirer. Stein writes that green job rhetoric won't create green jobs without a plan to invest in clean energy manufacturing here in the United States:
"Green jobs are surely needed. But green Democrats simply echo the Atari Democrats of the 1980s, who concluded that traditional manufacturing was disposable and high technology was the wave of the future. During this era, the young Barack Obama attempted - and failed - to find jobs for displaced steelworkers in Chicago."
Stein also writes that China's manufacturing prowess has implications for clean tech innovation as well, as I argue below: "Meanwhile, the Chinese government offers huge subsidies to encourage green-technology manufacturers in the United States to move their production to China. And when manufacturing leaves, research and development operations follow. That's how China attracted battery and fuel-cell research formerly conducted in America."
By Devon Swezey
In his State of the Union Speech, President Obama issued what is now a familiar refrain: "the nation that leads the clean energy economy will be the nation that leads the global economy." If there were still doubts about which nation has the edge they were put to rest days later by a bluntly titled front-page article in the New York Times, "China is Leading Global Race to Make Clean Energy."
Though the story is not new, the article is the latest indication of the alacrity with which China has emerged as a clean energy powerhouse in the span of just a few years. China now manufactures more solar cells than any nation in the world, and recently surpassed the United States as the largest market for wind turbines in 2009. According to "Rising Tigers, Sleeping Giant," a recent study by the Breakthrough Institute, China is also a world leader in advanced transportation technologies and batteries, is increasingly localizing the production of nuclear power plants, and has developed some of the world's most advanced CCS technology.
Despite the mounting evidence, many have dismissed the idea that the United States is competing in a "clean energy race" with China, or that it matters.
Some critics assert that characterizing the intense competition as a "race" obscures the climate benefits of greater clean energy deployment throughout the world and the "win-win" nature of a global clean energy economy. The New Republic's Brad Plumer embodies this "it's all good" line of reasoning, writing:
If China zooms ahead and figures out how to make really cheap wind turbines, that doesn't hurt anyone--it just makes the enormous task of cutting global carbon emissions that much easier.
Plumer's casual attitude towards the economic consequences of ceding clean tech manufacturing leadership to China is a slap in the face to U.S. Senators Sherrod Brown (D-OH) and Debbie Stabenow (D-MI). The pair has been working hard to secure the new clean energy manufacturing jobs that can help revitalize the industrial heartland.
At Yale e360, environmental journalist Christina Larson similarly suggests that the United States has little to lose if China dominates emerging clean tech industries:
The United States will still gain many new green-collar jobs in installation and maintenance, which can only be locally based, as well as sales teams, conference planners, and other positions already arising to support the growing green-tech field.
Forget about the export-oriented, high-value added, high-wage clean energy manufacturing jobs of the future that Democrats have promised will jumpstart the ailing American economy; the clean energy conference organizing industry is now open for business.
The New America Foundation's Reihan Salam mocks the idea of a "clean technology race," arguing erroneously that the barriers to entry in clean energy are low and that any established competitive advantage will be "ephemeral."
He compares China's clean tech policies to Japan's policies of the 1980s, as if the Japanese government did not succeed in supporting the development of what are still world leading high technology industries in automobiles, electronics, and high value steel manufacturing. While Japan was investing in high-tech industries the United States was simultaneously accelerating the financialization of its economy, creating trillions of dollars of paper wealth that has largely vanished over the last two years.
Indeed, Salam admits that federal investment in technology has spawned entire new industries like aerospace and electronics, but takes pains to paint similar investments that can catalyze the development of new clean technologies as "disastrous."
Apparently our surging clean tech competitors in Asia and the EU didn't get the message.
Jesse Jenkins joined ABC's Diane Sawyer on "The Conversation" via Skype today, to discuss clean technology competitiveness in the United States. In the interview, Jenkins emphasized the findings of the Breakthrough Institute/ITIF report, "Rising Tigers, Sleeping Giant," explaining to Ms. Sawyer that a national strategy for clean tech competitiveness -- something China, Japan, and South Korea all have -- is the primary limiting factor for the U.S. in its effort to keep pace with rising clean tech tigers, as well as the E.U.
A new report by U.S. Senator Ron Wyden's (D-OR) office shows that the U.S. is rapidly losing international market share in clean energy technologies. In a Senate hearing last week, Wyden questioned Energy Secretary Steven Chu about falling U.S. competitiveness but the exchange ended with Wyden noting that it was "not clear what the strategy is" to stem the erosion of U.S. market share. As the Wyden report shows, a real clean tech competitiveness strategy, the kind we outline in "Rising Tigers, Sleeping Giant," could not be more urgent.
U.S. clean tech manufacturers are losing global market share to their international competitors. What is the federal government going to do about it?
That was the question posed last week to Energy Secretary Steven Chu as he testified before the Senate Energy and Natural Resources Committee. Chu was speaking on the central role that energy research and development holds in any successful effort to mitigate climate change.
During questioning, Senator Ron Wyden (D-OR) quotes an earlier statement by Secretary Chu, calling it "the challenge of our time":
"The only question is which countries will invent, manufacture, and export clean technologies, and which countries will become dependent on foreign products?"
Unfortunately, the United States is headed in the wrong direction. According to Senator Wyden, who chairs the Senate Subcommittee on International Trade, Customs, and Global Competitiveness, "80% of clean energy investments are going to take place outside the United States, even though global trade in environmental goods has doubled just in the last few years."
The Challenge of Our Time: Senator Ron Wyden (D-OR) asked about the U.S. government strategy to boost U.S. clean tech competitiveness, but wound up with more questions than answers.
A recently published report by Senator Wyden's office shows that global exports of environmental goods (the majority of which are associated with clean energy technologies) more than doubled to $215 billion from 2004 to 2008. While U.S. exports have certainly benefited from the major expansion in worldwide demand for clean tech products, it has steadily lost international market share as other nations move more aggressively to capture competitive advantages in the burgeoning clean energy sector.
In the United States, clean tech imports have grown faster than exports, and U.S. exports have not kept up with global demand or international competitors, leading to an erosion of market share for U.S. products. By contrast, other nations, particularly China, have dramatically boosted their exports over the five-year period with China experiencing the greatest value growth in clean tech exports of any nation in the world.
Key figures from the report include:
The United States is the largest import market of environmental goods (EG) as well as the fastest growing import market from 2004-2008 in terms of product value.
In the last five years, the U.S trade deficit in renewable energy products increased by 1,400% to nearly $5.7 billion.
The United States faces declining export market shares in virtually every regional market, while China has substantially increased its market share in every regional market, over the last five years.
The United States has fallen behind China, Japan and South Korea in the race to commercialize and produce clean energy products and systems, according to the Breakthrough Institute and the Information Technology and Innovation Foundation.
"Asian nations are set to dominate the clean energy race by out-investing the United States," says a report from the two organizations entitled "Rising Tigers, Sleeping Giant." The three countries "have already passed the United States in the production of virtually all clean energy technologies and over the next five years, the governments of these nations will out-invest the United States three-to-one in these sectors."
By investing public funds into clean technologies, R&D and infrastructure, private-sector investment will quickly follow, totaling in the trillions of dollars over the coming decade. "While some U.S. firms will benefit from the establishment of joint ventures overseas, the jobs, tax revenues and other benefits of clean tech growth will overwhelmingly accrue to Asia's clean tech tigers," the report concludes. Asian nations will "capture economies of scale, learning by doing and innovation advantages before the United States, where public investments are smaller, less direct and less targeted. Should the investment gap persist, the United States will import the overwhelming majority of clean energy technologies it deploys."
TIME Magazine recently came out with their Top 10 Green Ideas of 2009. Number 9, "China's green stimulus," cites Breakthrough Institute and ITIF's new report "Rising Tigers, Sleeping Giant," a survey of the state of the clean energy race between the U.S. and Asia.
Here is TIME's Bryan Walsh:
It's the quietest story in environmentalism. In less than a year, China went from a polluting megapower to an up-and-coming clean-tech contender that promises to outpace America. Both countries responded to the recession by authorizing big stimulus plans with significant green components: 34% of China's stimulus money was green, compared with just 12% of funds in the U.S. That's good for the world -- as the low-cost-manufacturing champion, China might be able to churn out enough solar panels and wind turbines at a price the rest of us will happily pay. And the green stimulus is a sign that China, after staying mostly silent on global warming for years, realizes that its old model of pollute then clean up simply isn't sustainable. For the U.S., however, China's gains may mean losses at home. A recent report by the Breakthrough Institute warned that the U.S. could be lapped by Asia in the clean-tech race.
The "Rising Tigers" report can be downloaded here.
U.S. Senators have introduced legislation aimed at accelerating the growth of clean technology manufacturing industries here in the United States. The American Clean Technology Manufacturing Leadership Act, which would extend a 30 percent tax credit for creating, expanding re-tooling clean tech manufacturing facilities, is a commendable step forward to boost U.S. competitiveness in the global clean tech industry. But the United States sorely lacks a clean energy economy strategy capable of achieving economic leadership in the clean energy race. This legislation is one step in what must be a comprehensive and robust strategy that prioritizes large public investments in clean energy innovation, manufacturing, deployment, and infrastructure.
Yesterday, U.S. Senators Jeff Bingaman (D-NM), Orrin Hatch (R-UT), Debbie Stabenow (D-MI), and Richard Lugar (R-IN) introduced bipartisan legislation aimed at accelerating the growth of clean technology manufacturing industries in the United States.
The American Clean Technology Manufacturing Leadership Act would extend a tax credit first introduced in the short-term American Recovery and Reinvestment Act (ARRA) to allow companies to write-off 30 percent of the cost of creating, expanding or re-tooling domestic clean tech manufacturing facilities.
The ARRA program--called the Advanced Energy Manufacturing Tax Credit--provides $2.3 billion in tax credits and has spurred new investments in U.S. clean tech manufacturing facilities. Funding for the popular program is expected to dry up in mid-January but the new legislation would provide an additional $2.5 billion to extend the life of the program.
In a statement on the release of the bill, Senator Stabenow proclaimed that the legislation is critical to boost economic growth, job creation, and U.S. competitiveness in the global clean energy race:
"In order to turn our economy around and create jobs, we need to build the clean energy technology of the future here in America. Otherwise, we will lose the race with other countries and see those jobs go overseas."
European and Asian high-speed rail manufacturers are courting U.S. government officials in hopes of securing contracts for some of the $8 billion dollars of federal stimulus funds ear-marked for domestic high-speed rail (HSR) projects. Notably absent from the list of companies vying for the cash are American companies. Without the development of a domestic high-speed rail manufacturing base, much of the HSR technology and expertise will continue to come from overseas, with many of the new jobs being created overseas as well.
European and Asian high-speed rail manufacturers are courting U.S. government officials in hopes of securing contracts for some of the $8 billion dollars of federal stimulus funds ear-marked for domestic high-speed rail (HSR) projects.
According to Greenwire, foreign manufacturers are hosting country visits for federal and state government officials to see their high-speed train technologies, as well as dropping not-so-subtle hints that they will build new domestic manufacturing facilities, or expand existing ones, if they are awarded contracts.
States are also feverishly competing for federal funds. According to NPR, forty states and the District of Columbia have already filed applications requesting more than $100 billion for high-speed rail projects. The most ambitious project is a proposed $40 billion, 800-mile HSR network in California spanning from Sacramento to San Diego. Although the Federal Railroad Administration has yet to award any of the $8 billion in government funds to any state or project, companies from Germany, France, Canada, Japan, and China are hoping that early efforts to charm government officials will pay off down the road.
Notably absent from those promoting their HSR technologies are American companies. That's because the United States ceded international leadership in the transportation technology in the 1960s, when Japan became the first nation to construct a national high-speed rail network.
Three U.S. Senators and a U.S. Congressman have unveiled new bi-partisan legislation intended to boost the international competitiveness of the United States' ailing solar technology manufacturing industry. The legislation is a commendable first step forward as components of a broader clean energy economy strategy. A full suite of long-term and targeted clean energy technology policies will be necessary for the United States to remain competitive in the global clean energy race.
Last month, U.S. Senators Debbie Stabenow (D-MI), Michael Bennet (D-CO), and Robert Menendez (D-NJ), as well as Congressman Dave Camp (R-MI) introduced the Solar Manufacturing Jobs Creation Act, intended to boost the international competitiveness the U.S. solar manufacturing industry. After introducing the legislation, Senator Stabenow said it was necessary to "help us win the global race against China and other countries to produce solar technology in the clean energy economy."
The bi-partisan legislation would extend the existing solar Investment Tax Credit (ITC), which offers a 30 percent tax credit for solar energy investment and deployment, to cover the construction of new solar manufacturing facilities as well. The ITC was recently given an eight-year extension in the Emergency Economic Stabilization Act (EESA) of 2008.
The new legislation would also give solar manufacturers access to the temporary cash grant program created by the American Recovery and Reinvestment Act (ARRA), which has successfully boosted the deployment of renewable technologies, primarily wind power.
The new U.S. legislation is the second in as many months that aims to support the domestic solar industry. In late October, the U.S. House of Representatives passed the Solar Technology Roadmap Act, which would require the U.S. Department of Energy to appoint a group of experts to create a long-term plan to guide solar energy R&D and the commercialization of next-generation solar technologies. While the bill only authorizes $2.25 billion for solar R&D over the next five years, it represents a sizable increase in funding and a move toward a more strategic and targeted approach to clean energy development.
If the U.S. is to regain its position as a global leader in clean energy technology, and solar in particular, much more targeted policy support is needed. Both the Solar Technology Roadmap Act and the Solar Manufacturing Jobs Creation Act are important first steps forward in developing a comprehensive clean energy economy strategy capable of revitalizing the U.S. economy and making the United States a world leader in clean energy technology once again.
China's announcement, last week, that its Export-Import Bank inked a $2.9 billion deal to finance exports of China Energy Conservation Investment Corporation outshines an earlier announcement by the U.S. Ex-Im Bank of a $250 million investment in clean energy exports, offering yet another example of the widening investment gap between the U.S. and China in the clean energy race.
The Export-Import Bank of China inked a $2.9 billion deal last week to finance exports of China Energy Conservation Investment Corporation (CECIC), out-doing a $250 million outlay announced by the U.S. Export Import Bank earlier this month.
Charles R. McElwee, based in the Shanghai law office of Squire, Sanders, and Dempsey LLP, told the Wall Street Journal:
"This swamps any U.S. [government] initiatives to support exports,"
China's Ex-Im Bank is also financing the controversial 600 MW Texas wind farm, which will be the first U.S. project to use imported Chinese turbines. The Ex-Im Bank supports companies like CECIC, an energy-efficiency and renewable energy project developer, because they tend to have less access to the global banking system. Government support for clean tech export financing will further boost Chinese exports of energy efficiency and clean energy technologies to international markets, particularly in developed countries, where demand for clean energy technologies is greatest.
Benchmarking clean-tech competitiveness: A new report by the Breakthrough Institute and Information Technology & Innovation Foundation provides the first comprehensive analysis of competitive positions among the U.S. and key Asian challengers in the global clean energy race.
The report examines the competitive position of each nation in core clean energy technologies, including solar, wind, and nuclear power, carbon capture and storage, advanced vehicles and batteries, and high-speed rail, as well as the government strategies each nation hopes will strengthen its position in the global clean technology sector. The report also offers recommendations for U.S. federal policymakers for regaining U.S. competitiveness.
You know the world is changing when the president's first trip to Asia is defined by a new U.S. foreign policy dubbed "strategic reassurance" - convincing China that the United States has no intention of containing its growing power or endangering its foreign investments. As the New York Times put it, "When President Obama visits China for the first time on Sunday, he will, in many ways, be assuming the role of profligate spender coming to pay respects to his banker."
You also know times are changing when China, the world's greatest polluter, and other Asian nations are poised to dominate the burgeoning global clean-tech industry by out-investing the United States. That's the conclusion of a large new report we co-authored called "Rising Tigers, Sleeping Giant," released this week by the Breakthrough Institute and Information Technology & Innovation Foundation (see coverage in Financial Times and Wall Street Journal). The report is the first to thoroughly benchmark clean energy competitiveness in four nations - China, Japan, South Korea, and the United States - and finds the following:
"Asia's rising 'clean technology tigers' - China, Japan, and South Korea - have already passed the United States in the production of virtually all clean energy technologies and over the next five years will out-invest the U.S. three-to-one in these sectors... While some U.S. firms will benefit from the establishment of joint ventures overseas, the jobs, tax revenues, and other benefits of clean tech growth will overwhelmingly accrue to Asian nations... Should the investment gap persist, the U.S. will import the overwhelming majority of clean energy technologies it deploys."
What do these two changes have in common? They both reflect the accelerating shift of global power from America to Asia, caused in large part by the serious mismanagement of U.S. economic policy.
