The New Energy OlympicsAstonishingly, there is a proposal in the U.S. Senate to withdraw the financial incentives provided to New Energy by the 2009 stimulus bill, potentially threatening tens of thousands of high-quality domestic jobs. Beyond the short-term ramifications, however, the proposal is even more detrimental: It could further threaten U.S. economic competitiveness for generations. If the U.S. does not get competitive in the international race to develop a New Energy economy expected to be worth $2.3 trillion by the end of the next decade, it will have missed out on the biggest foreseeable opportunity in this century. In Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind, authors from the Center for American Progress (CAP) describe the federal government's to date support of the New Energy/Energy efficiency sector as “lollygagging.” They attribute this performance to inadequate and inconsistent federal policies that represent, in sum, a failure of real commitment to the sector. And they explain what a blow to the nation's international competitiveness it will be if effective policies do not emerge. The CAP study details how Germany, Spain and China are using public policy to make a real commitment and facilitate the building of a New Energy (NE) and Energy Efficiency (EE) infrastructure. Policies and programs signal their business communities and support their marketplaces as the transition to an emissions-free New Energy economy that depends on secure domestic energy resources and provides new jobs and a renewed manufacturing base for their populations moves ahead dynamically. Apparently some members of the U.S. Senate find such things objectionable. But there are also Senators with more foresight now attempting to write energy and climate legislation that can win bipartisan support. Which element of U.S. political leadership prevails could determine the economic fate of the nation for decades. This is not exactly news. Rising Tigers Sleeping Giant, a Breakthrough Institute 2009 report, showed that U.S. New Energy R&D spending is embarrassing in comparison to that of important Asian economies. (See ASIA, THE U.S. AND THE NEW ENERGY RACE) Investing in Climate Change 2010, a Deutsche Bank 2010 study, showed that investments in the New Energy economy pay better than the economy as a whole but require favorable policies and incentives to put them on a level playing field against the entrenched Old Energies. (See THE BEST BETS ARE ON THINGS THAT BEAT CLIMATE CHANGE) The question is not whether the U.S. can afford to commit to New Energy and Energy Efficiency, the question is whether it can afford not to: Evergreen Solar built a plant to manufacture solar photovoltaic panels in Devens, Massachusetts, but, 2 years later, in the wake of failing support from public policy, moved part of the operations to Wuhan, China. Will this continue to be the pattern for U.S. manufacturing and the fate of the U.S. worker?
This post is based on Will U.S. Companies Be Shut Out of Clean-Tech Markets by China and Other Competitors? by Lisa Friedman (March 4, 2010, NY Times) and Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind by Kate Gordon, Julian L. Wong, and JT McLain (March 2010, Center for American Progress) Click thru for more on this and more NewEnergyNews
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Herman Trabish
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Since the US began making a run at Renewables, and I was fortunate to be involved in early strategic planning by federal and state, an error in philosophy has in my mind been demonstrated in that a tremendous amount of social resources from federal and state, primarily speaking to the form of grants, have gone towards academia on programs that have little value in full scale. Not all, but many ideas generated within the educational institutional complex have had little to do with real world, or should I say real US form of successful markets, much different than most all other markets globally.
Again there is a philosophical issue here and what is being played out in America is that governing bodies have taken directives to drive the quest for the renewable energy gold medal by attempting to emulate some sort of EU social economic model and not the dynamic capital markets that thrive in the US. In doing so, they have drained private capital markets and tied up creative intellect behind a cushy test tube environment with little incentive to function beyond some name recognition and a tingling feeling that they are doing something noble.
Don't get me wrong, some of my best friends and associates are academics as well as my brother, of whom head of a department at a major US university spends most of his time writing grants. The real issue I am suggesting is that our system of success has historically been demonstrated to be unique and innovative, centered around individuals and private companies' free creativity to generate profit driven ideas. There is far too much human and financial capital heading into the pot of ideas that will never become valid, or sustainable.
We are not Europe. Americans will not pay for true, non subsidized Renewable Energy cost unless they have a vested interest in it or until it reaches a level of cost within reason of alternatives. When gasoline was $ 4.50 there nearly was rioting in the streets and that's nothing compared to what other countries of the world pay.
As a Renewable Energy producer/professional I welcome feed in tariffs and any justifiable approach to encourage free market advancement in utilization of renewable resources– within reason-and more importantly the drive towards energy independence. While there are some complex issues attached to tariffs on biofuel imports, I see no reason not to encourage stability in the production of home grown biofuels until the market matures and/or we receive the same value of federal support as oil.
The playing field is laid out before us within America to make those advancements, but the game has to be played the way we get things done here. Let the governing body(s) and bureaucrats step back from choosing winners and losers while forcing regulation on industry taking on renewable strategies, and the free market of America will champion the evolution in the industry that will capture that Olympia Gold.
If a philosophy change is not made soon in the US then I cannot see how we can out spend or out maneuver the monopoly of the China totalitarian system, they have been at this social engineering a lot longer than we have and frankly I don't think the American people will put up with it much longer.