Are we in a ‘clean energy race’ with China?
A popular line among climate hawks these days goes something like this: If the U.S. doesn’t support domestic clean energy, China will beat us in the clean energy race. The message has become quite popular lately, and indeed Obama said something very like it in his State of the Union, what with the “Sputnik Moment” (which, because I’m a bad person, I can’t help thinking sounds like the title of a porn movie). There’s been a wide-ranging debate about the merits of this approach on the interwebs over the last few months.
I think it helps to separate the claim into two parts: first, whether the U.S. should support domestic clean energy, and second, whether competition with China is a good rationale for doing so. The first is a knotty topic that I’ll get into later, but for today, let’s noodle over the second bit — the “race.”
Is it politically useful to say we are in a contest with China?
As I said in The New York Times‘ Room for Debate a couple weeks ago, the primary barrier to progress on clean energy is not a policy disagreement about the best way to move forward on clean energy. Rather, it’s a disagreement about whether to move forward on clean energy. Republicans simply don’t want to. Unlike the voting public — even the conservative voting public — they like fossil fuels just fine.
So, can they be persuaded to change their position by the specter of competition with China? Can fear of Chinese dominance produce bipartisan support for clean energy?
Conventional wisdom these days seems to be: yes, where appeals based on climate change failed, appeals based on competitiveness have a chance of succeeding. Surely no politician, no matter how skeptical about climate change, would want to let China … beat America? Hell no! We’re No. 1!
The question is, if it does motivate policymakers, what will it motivate them to do exactly? Michael Levi says it’s not likely to end well:
Fears of China lead quickly to calls for protectionism, through steep barriers to clean energy imports or to Chinese investment in U.S. clean energy projects and firms; investment and imports are currently relatively small, but have great potential to grow. Such moves hurt support for Washington’s efforts to open up foreign markets (including Chinese ones) to U.S. firms. They slow the flow of clean energy technology across borders, stifling innovation and delaying much-needed cuts in the cost of green technology. They starve capital-hungry U.S. firms of investment, while depriving U.S. consumers of access to cheaper sources of pollution-free power. At the same time, the Sputnik rhetoric is bound to sap lawmakers’ enthusiasm for the sort of clean energy cooperation with China that President Barack Obama will push for during Hu’s visit. This will hobble the development of cheaper sources of clean energy, delaying the much-needed expansion of clean energy markets and increasing costs for U.S. consumers.
That sounds bad! (Ryan Avent has similar thoughts.)
Levi is right to warn against crude protectionism (though, as he notes in a follow-up, China does have some legitimately objectionable trade and currency policies worth pushing back on). And he may be right to predict that America’s reliably depressing political system will react that way. But I think it’s too early to say so confidently. It will take a while to see if this narrative can shake anything loose, and given the abject failure of all previous narratives, I’m not too eager to shut it down before it has a fair shot at gaining momentum. However much I may think it’s hooey (see below), if it yields more spending on infrastructure and RD&D, I say China boogabooga!
After all, no matter what message pandering congresscritters use to sell them, when it comes to negotiations with Hu, the Obama administration’s hand will only be strengthened by having domestic clean energy policies in place.
Of course everyone should try to talk about competition with China appropriately and to tamp down xenophobia, but there’s only so finicky one can afford to be in a political system with such overwhelming status quo bias.
But anyway, on the political side, I’m scoring it: too early to tell.
Are we in fact in a clean energy contest with China?
It depends what you mean by “contest.” It’s not a contest like Survivor, but it is a contest like The Biggest Loser.
Survivor is a zero-sum game. To the extent one participant succeeds, the others fail — they’re “voted off the island.”
The Biggest Loser is different: every participant benefits just by participating. It’s a competition, but it’s a friendly competition wherein “winning” is mostly symbolic. The point is to lose weight.
The “clean energy race” is, or ought to be, like The Biggest Loser. Both countries can grow their clean energy industries without either getting voted off the island or “losing.”
All the world’s people will benefit from cheaper clean energy and lower carbon emissions. China and the U.S. will both benefit from the expansion of the global market for clean energy. They will both benefit from joint research initiatives, intellectual property and technology sharing, and the reduction of distorting trade barriers. America happens to be particularly strong in research and tech development; China happens to be particularly strong in economies of scale. Those are complementary strengths that, in a sane world, would produce mutual benefit.
The question, then, is this: What should the U.S. do to support domestic clean energy innovation and industry that will not have the unwelcome effect of suppressing Chinese clean energy innovation and industry? That, you’ll be relieved to hear, won’t get hashed out here. I’ll tackle that in a future post.