Renewable Energy Myths 5: If China Drove An Electric Car Off A Cliff...

"There’s an argument to be made that the short-term culprit here is the contest between the United States and China, to see who can subsidize their respective solar industries the most (Hint: China is winning). On the other hand, finding the most economically efficient way to deliver energy — or finding the best “comparative advantage” roles for the U.S. and China in the solar market — is only the second most important goal of promoting renewables."  Jeff Spross, Climate Progress.

One of the great oddities of the debate over Cleantech and renewable energy policies is the insistence that the US should emulate China. As a previous post noted, the idea that a country could achieve “dominance” in any industry or technology is foolish, having been violated repeatedly. But given the economic boom in China, many feel that the implication is that they must be doing something right.

In fact, the same concept percolated through the mental coffeepots of industrial policy proponents during the 1980s, when the nation to be idolized was Japan. It did prove, however, that some of Japan’s great success was due to expansive fiscal policy creating an asset bubble. (If you think that was the only factor, check the price difference between manufactured goods from Japan and the US, Korea or China. Companies like Sony made a huge difference and reap the benefits in their stronger pricing power.)

But just as renewable energy advocates ignored the Japanese robust nuclear power program, so they now avoid mention of the Chinese reliance on coal for xx% of their total energy consumption. Nor do their plans to promote nuclear power receive much attention, just as pundits like the New York Times’ Thomas Friedman never seems to mention Denmark’s robust offshore oil production when he showers their wind power emphasis with plaudits.

More important, why take China as an example to be imitated? Proponents seem to think their rapid economic growth of the past two decades, which is much guided by government, proves the government’s superior insight into microeconomic policy. This is a very elemental mistake. Chinese economic boom is basically the same as what the US, Europe and Japan experienced, moving low-productivity agricultural laborers into high productivity manufacturing jobs.

The reality is that China is heavily focused on building new coal power plants, and has not only become the largest carbon emitter, but the fastest growing emitter among major economies. Although it has committed to new nuclear plants, it also continues to build coal power stations and threatens to continue this, with coal consumption projected to grow by about 25%, or 500 million tons of oil equivalent, by 2035, according to the IEA (2012 forecast).

As in some other cases, like fears of “dominance” of the Cleantech industry by other countries, this argument appears to reflect a combination of naivete and a desire to avoid the real question, namely whether or not renewables are the most cost-efficient way to reduce greenhouse gas emissions.