China Plays Dirty with Clean Energy


"But China may be operating under an unfair advantage."

While U.S. states struggle to develop their clean-energy potential, China has become a center for clean-energy manufacturing. It will produce more than half the world's solar panels this year, and more than 95% of them will be exported to the U.S., Germany and other countries. But China may be operating under an unfair advantage.

The New York Times reports the country's success with the renewable energy industry mostly is due to aggressive governmental policies, including heavily subsidized land and loans for exporters.

America is no stranger to subsidiesójust ask a corn farmer. But at issue is China's apparent violation of World Trade Organization rules that ban nearly all subsidies to exporters. China's policies could be challenged at the WTO's tribunals in Geneva; and, if China fails to remove its subsidies on exports, the United States and other countries could impose tariffs on them.

China's "business friendly" practices have helped fuel the clean energy market, lowering prices worldwide on solar panels and wind turbines, but that can come at the expense of U.S. jobs. The NYT notes this example: "Evergreen Solar of Marlboro, Mass., plans to move the final manufacturing steps for its solar panels from Devens, Mass., to China next summer, eliminating 300 American jobs, after struggling to borrow money in the United States and after finding that costs in China were lower."

While China may get its hand slapped, it's still dominating the clean energy market, making some wonder if the United States could learn somethingówithin the rulesófrom China. While China is giving land away, making loans easy for clean energy upstarts and providing an educated workforce, the U.S. is arguing over carbon pricing and a Renewable Energy Standard. An RES requires utilities to get a percentage of their energy from renewable resources.

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