Green With Economic Envy

As China subsidizes green technology, America stands in the way

The Obama administration garnered enthusiasm from U.S. companies and contempt from the Chinese when it launched its recent 90-day investigation into China’s subsidizing the manufacture of solar and wind energy products, energy-saving batteries, and energy-efficient vehicles.

Jim Lehman, Professor Emeritus of Economics at Pitzer, is intrigued by the attention that Americans are giving to what he sees as a relatively small issue. He also notes an important difference between being a worker and a policy-maker: while the workforce primarily focuses on the economy, policy-makers need to see the larger picture and be aware of environmental factors as well.

So far, though, jobs have taken the focus. U.S. Trade Representative Ron Kirk called green technology “an engine for the jobs of the future” and noted that “this administration is committed to ensuring a level playing field for American workers, businesses, and green technology entrepreneurs.”

The investigation was met with the quick approval of the American Iron and Steel Institute and the nation’s largest industrial firm, the United Steelworkers, which on Sept. 9 was the first to accuse China of violating World Trade Organization regulations through unfair subsidies. Together, the organizations declared, “President Obama showed again today that fighting for U.S. workers and their jobs is his top priority.”

Yet many in Congress think the inquiries are not extensive enough. Senator Charles E. Schumer (D-NY) stated that “an investigation into China’s illegal subsidies for its clean energy industry is overdue, but it’s no substitute for dealing with China’s currency manipulation.” Moreover, in September, the House of Representatives overwhelmingly approved a resolution threatening China with tariffs on a variety of exports.

Zhang Buobao, head of China’s National Energy Administration, calls the U.S. hypocritical, saying, “What America is blaming us for is exactly what they do themselves. If the U.S. government can subsidize companies, then why can’t we?”

Buobao is correct. The Obama administration has proposed $60 billion in subsidies for clean energy industries. There are also hidden “buy American clauses” on certain clean energy products. Given the similarities between the Chinese and U.S. subsidy practices, is the Obama administration’s intense scrutiny merited?

Claremont McKenna freshman Nicholas Hobbs attributes the administration’s harsh scrutiny to China’s emergence as a major power. “I think China right now is under the spotlight, so they will be criticized no matter what they do,” he told the Port Side, adding that the subsidies are positive. “With China having over one billion people, they need to be a lot more concerned about environmental problems, namely carbon emissions, than a country of 300 million.”

Indeed, environmental conditions in China have come under much scrutiny. In 2007, a scathing New York Times article entitled “As China Roars, Pollution Reaches Deadly Extremes” revealed that 500 million Chinese people lacked access to clean drinking water and that only 1% of them breathed clean air by European Union standards.

Just three years later, China has made great strides toward embracing environmentally friendly policies. It has signed the Kyoto Treaty, which the U.S. still has not done. China also produces more solar panels than the U.S. Yet, U.S. policy-makers still react furiously to the Chinese government’s subsidization of green technology.

Amid the noise made by the United Steelworkers, the Obama administration, and legislators, there seems to be only one explanation for our hypocritically negative outlook on China’s green energy policy: we want China’s policies to be eco-friendly, as long as they do not hinder our economy.

I am a second year student at Pitzer College intending to major in English World Literature and minor in Spanish. In my free time I am an avid outdoors enthusiast and enjoy sea kayaking, backpacking, mountain biking, and playing volleyball.

One Response to “Green With Economic Envy”

  1. A well written article, thanks for posting. Good new could be on the way as the New York Times reports this week that the US Energy department has completed a $150 million loan guarantee to 1366 Technologies, a company with a new way to make the silicon wafers used in solar PV panels.

    The company plans to operate up to 160,000 rooftop installations at military bases around the country, mostly on apartment buildings and houses. That would be a huge expansion of rooftop solar systems; there are nearly 160,000 residential and nonresidential installations in the United States today.

    SolarCity also plan to create about 750 construction jobs over five years. The company intends to employ veterans or relatives of active-duty personnel to do much of the work, at up to 124 military bases in 33 states. SolarCity said it would install 371 megawatts of generating capacity.

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