Friday, April 22, 2011

More on the China Green Energy Myth

Shanghai, China Smog. A Source of China's "Green Jobs" Advantage?

This blog has previously debunked the myth that China somehow leads the world in clean energy. (See U.S. Crushing China in Clean Energy Race) (See here for one such assertion that China might "clean our clock" when it come to clean energy technology.) As previously explained, China does lead the world in carbon emissions, a dubious distinction, and the country emits twice as much carbon per unit of output as the United States. Moreover, some estimate that, by 2030, China's carbon emissions, now growing by leaps and bounds, will equal the world's entire current emissions.

Yesterday, in a devastating Washington Post Op-Ed, Bjorn Lomborg further exploded the myth of China's Green Superiority, explaining that, while China manufactures numerous wind turbines and solar panels for export to other countries, its own utilization of such technology is cosmetic at best. Thus, it seems, China's role in green energy technology is an example of economic opportunism, whereby the country takes advantage of its various advantages to manufacture solar panels and wind turbines, all the while lagging behind other nations in the actual utilization of such devices.

Here are the salient points of Lomborg's essay, followed by some additional thoughts.

1) While China produced one half of the world's solar panels in 2010, it exported 99 percent of that production to other countries, many of whom subsidize the purchase and installation of such (expensive) panels. For all the ballyhoo about Chinese solar panel production, solar panels account for one-half of one-thousandth of 1 percent of Chinese electricity production. Basically, then, Western nations are subsidizing Chinese production of a very expensive method of generating electricity.

2) While China installs about one third of the world's wind power turbines, much of this has been "for show." Many such turbines are not even connected to China's power grid, and a 2008 study found that one third of China's wind turbines are not in use. Thus, wind power generates one-twentieth of one percent of China's electricity. By contrast, your blogger's own research reveals that wind power accounts for almost two percent of American electricity generation. That is, windpower is nearly 40 times more prevalent in the United States than in China.

3) 87 percent of China's power comes from fossil fuels, mostly coal. (Note that this compares to about 70 percent for the United States.)

4) China does lead in the production of so-called "solar heaters," which heat water for cooking, bathing, and other uses. In China, such heaters provide four times as much energy as windpower. The production of such heaters is not subsidized; Chinese consumers demand them because they far most cost-effective than, say, conventional water heaters.

Some additional thoughts:

--- Many point to ChinaAs Lomborg suggests, China's apparent emphasis and advantage in manufacturing solar panels is simply one manifestation of its larger emphasis on manufacturing for export. For instance, according to one source, China produces more than three times as much steel as the United States and Japan combined. (Note that the same source reports that China leads the world in steel production, with Japan second and the United States third.) China also replaced the United States as the largest exporter of information technology products in 2005. There are numerous reasons for China's growing dominance in these and other industries, but China's supposed commitment to "Green Energy" has nothing to do with, say, China's exploding steel production. On the contrary, and quite ironically, China's lax enforcement of its own environmental laws results in the sort of smog pictured above and also gives its manufacturing base, including firms that manufacture solar panels and wind turbines, a cost advantage over, say, American companies subject to more stringent environmental regulations. (This report, by the Alliance for American Manufacturing, documents the lax enforcement of China's environmental laws vis a vis the steel industry.) Ditto for China's relatively lax regulation of other subjects.

--- Much of the public rhetoric on this issue apparently conflates two different questions: (1) the level of a nation's carbon emissions, which depends in part on the sources (e.g., fossil v. non-fossil) of a country's electricity and (2) whether the country in question itself produces wind turbines, solar panels, and other devices for generating electricity without relying on fossil fuels.

As the China example shows, a nation can apparently thrive in one category while entirely falling down in another. Moreover, at the end of the day, performance in first category is far more important than the second. Indeed, if countries are serious about performing well in the first category, then performance in the second category will take care of itself, as producers of electricity will demand clean methods of electricity generation, thereby inducing the private sector to invest capital and knowhow in the production of such devices.

--- There is no doubt that domestic subsidies for the production of solar panels, wind turbines and the like will encourage firms that manufacture such items to locate in the United States and thus increase the number of Americans who work in "green-related industries." It's also the case that domestic subsidies for the production of paper clips will increase the number of Americans working in the paper clip industry. Someone, however, must pay for such subsidies, and a nation cannot subsidize itself to a strong jobs base.

--- A nation concerned about reducing its carbon emissions and providing good jobs for its citizens should focus on: (1) providing the appropriate incentives for consumers and producers to make only reasonable uses of carbon-based electricity and (2) providing an economic environment in which all companies, whether or not they make windmills, can grow and thrive, free of the shackles imposed by unduly onerous regulation.