Even as China overtakes the U.S. in the dubious category of “world’s leading greenhouse gas producer,” it is also well ahead of the U.S. in developing the technologies and policies to solve the problem—and selling those solutions to us at massive profits which could have been ours.
On a recent trip, I saw entire Chinese towns powered by farm waste and enough windmills for jousts with ten thousand Don Quixotes. As you read this, China will have just surpassed the U.S. as the leading producer of wind turbines, many of which are exported at very high margins. And to get a sense of just how fast China is leaving us in their rearview mirror, consider this: the Golden Dragon has doubled its wind capacity every year since 2004.
Solar too. I wrote a speech for California Governor Arnold Schwarzenegger in 2005 when he visited China on a trade mission. He spoke at Tsinghua University in Beijing, “China’s MIT,” and held up the world’s most efficient solar cell, designed by Silicon Valley’s SunPower Corporation. The cells were being manufactured in China for export back to the states, but SunPower had to double capacity because of Chinese domestic demand. Schwarzenegger noted that a student in the audience might design the next/better solar cell someday—and every head nodded with knowing smiles. So while we have already lost the battle for low-cost, high-tech manufacturing, we may soon lose bragging rights and IP royalties when our designs are surpassed by China.
One reason China is leaving us in the dust is a shrewd government that has invested 40% of its stimulus funding in green companies, compared to just 12% by U.S. taxpayers, ensuring the rapid growth of the economic gift that keeps on giving. They also get the money out the door—compare our Department of Energy, which is still mired in communist-era bureaucracy and can’t ever seem to pull the trigger on loan guarantees/grants for projects that actually work. The secret is that the Chinese government fast-tracks projects that create economies of scale, recently approving a 25 square mile solar farm. That helps Chinese companies get costs down and become even more competitive globally.
The final ingredient in the fast-rising Chinese cleantech soufflé is finance. When I spoke in Hong Kong to investors, pension funds, and shoe shine boys with coins to invest, they are all putting money into these clean technology companies and looking for more. That includes real estate investors, who are looking for green development projects with LEED or other certified efficiencies. My firm, Pegasus Sustainable Century Merchant Bank, recently partnered with Ross Perot’s Hillwood Realty to host a US tour for the China Real Estate Chamber of Commerce and 30 of their investors. They’re looking at green projects, but also figuring out which energy efficiency and green building products they can take back to China for use in their own developments.
But never fear: everyone I spoke to in China’s government and private sector was very polite. They are willing to share all of this with the rest of the world—at the right price, of course. See you at the race track!
City preps and countries posture ahead of Copenhagen talks
Home Economics of the JP Green House, Part 1
Comments
View as Flat
skitters Posted 8:35 am
18 Sep 2009
Permalink
lasmog Posted 10:52 am
18 Sep 2009
Permalink
Jon Rynn Posted 5:57 pm
18 Sep 2009
China doesn't worry about the mythical "market"'s ability to direct the economy, rather, the government directs the market into more profitable industries. The United States is shackled by its ideology of free markets, which is also having the perverse effect of preventing us from decreasing global greenhouse gas emissions with any kind of speed.
Permalink
vbstenswick Posted 7:31 pm
18 Sep 2009
Permalink
SnowStarvedVermonter Posted 9:44 am
24 Sep 2009
Permalink
Tasermons Partner Posted 1:01 pm
19 Sep 2009
They may produce more clean energy than us in the near future (we still beat 'em on wind energy at the moment), but even then it will make up only a small fraction of their energy output (2-3%).
I'm excluding hydro from those figures. They can build massive dams out the wahzzo all they want, but that doesn't make it "clean" energy.
Permalink
Glen Clark Posted 6:45 pm
19 Sep 2009
thanks for the info. Where could one find more on current and projected demand served by alt energy in China?
Regards
Glen Clark
Permalink
Sasparilla Posted 7:29 pm
19 Sep 2009
Something that isn't on the radar screen for alot of discussions regarding China and trade and stuff is that Oil (that lifeblood of transportation) will grind China's exports (at least to the US) into dust over the next decade or so. Last year's $147 barrel oil price had the same effect of a 15% tariff (about what we had in the 1970's when it wasn't worth it to offshore your industries there for labor - steel was cheaper to source in the US last summer). As oil goes back up when demand goes back up (as the economies come back - its already doubled in this year) oil will extract a toll as it climbs (we'll continue to have boom/bust cycles that will raise/lower oil demand upping and lowering its price, but it will be on a climb overall as it has been this decade). Things that are shipped and more vulnerable to transportation costs (big chunks of steel for example) will be the first to go and over time more and more things will bite the dust. An example here is that it doesn't make sense to get wind turbine blades offshore as the transportation costs add so much that overall its cheaper if you source it locally (in the US).
So I believe this fear of "they're going to beat us" with China is overblown. They're going to have their hands full taking care of themselves, we'll be in the same position and Oil will gradually destroy our "global" economy (at least of physical goods) over the next couple of decades so that all that manufacturing we thought was gone for good will be back - it only left because of cheap energy/oil and that is gone. JMHO.
Permalink
Des Emery Posted 8:33 pm
19 Sep 2009
Permalink
amazingdrx Posted 10:22 am
20 Sep 2009
We need some FDR/Eisenhower style public investment, like the TVA, rural electrification, and the interstate highway systyem (the socialist part of the political equation); in order to bring Teddy Roosevelt trust busting to restore a free market (the capitalist part) in energy.
A national high voltage direct current power grid would put us back on the leading edge of innovation. It would attract solar, wind, and biomass/waste stream energy investors and manufacturers. A solar farm in the desdert southwest or a wind farm off any coast or on the great plains would pay great dividends if the power could be sopld across the continent.
Like wise great return on investment could be realized for storage, from superconducting electromagnetic energy storage on the HVDC grid, to batteries in individual homes and cars. Storage throught the smart grid would have a quick payback period.
Systems for billing and crediting individual energy accounts over internet on the power grid would be developed, a wholw new industry of smart grid switching and billing would be developed. Fractal distributed computing controlling distributed generation and storage.
We can still lead if we invest like we did in the TVA and interstate highway system and other national projects. A national HVDC power grid will facilitate electric rail and under highway recharge strips so cars and trucks can charge while they drive.
This is how public investment has grown our economy in the past and the way it can do it now and in the future. Don't worry about China, cheer on their green efforts, keep to the public investment we need. Build it and they will come, investors in renewable energy, electric transportation, and all the technology it takes to make it happen.
Make the US power grid the test bed for HVDC smart grid technology, the way a few cities here, Boulder and Austin, have become smart grid test cities. That's the one government investment of say 20 to 40 billion per year that could yield great gains in a few years, 20% wind and solar for the national grid would be right around the corner.
That public investment would bring on 10 times the investment dollars, and in time that would soar until tax dollars coming in more than pays for the initial public investment.
Permalink
Des Emery Posted 6:07 pm
20 Sep 2009
Permalink
bailsout Posted 10:15 pm
21 Sep 2009
Permalink
georgiact Posted 6:41 pm
24 Sep 2009
Permalink
Matt N. Posted 7:24 am
25 Sep 2009
As for my 2 cents on the issue of our convoluted and slow moving government... well maybe we should vote Obama some "emergency powers". Of course he might create a clone army and try to conquer the galaxy but oh well. Seriously though, it seems like there is still much to be done at the community and state level, at least when it comes to increasing efficiency. The author mentioned finance as one of the powerful tools driving Chinas green tech machine; so at the business and personal levels invest in LEED certified buildings, invest in renewable tech, and create a market.
Permalink