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Happy Year of the Snake!
I have some major catching up to do so let me begin here with a link to my book which the Wilson Center launched on September 24, 2012. (Note: if you want to download the PDF of the book, just right-click and use the Save As option).
More 2012/3 updates to follow in rapid sequence.
Thanks for hanging in there,
This is the second in the 2012 series of Cooketop News commentaries and news recaps.
By reviewing the previous week’s top stories involving — broadly speaking — U.S./China clean energy, the commentary section isolates one trend/dynamic which points forward and can help illuminate news-in-the-making for the week(s) ahead. Following the commentary is a summary of the week’s top stories.
This week? We look at the headline (Cooketop News, Friday, January 13th) that, after four years, the U.S. re-took the lead from China as the front-runner in global clean energy investment.
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From 2008-10, the U.S. visibly lost pace – and, in some instances, lead position – to China as the world’s top investor in clean energy. In 2010, China – then just over one-third the size of the U.S. economy – invested twice the absolute amount in clean energy as the U.S. Yet, in 2011, the U.S. bounced back, reclaiming top-spot for the first time in four years: U.S. investment increased 33% to US$56 billion while Chinese investment remained flat at $47 billion, according to Bloomberg New Energy Finance. What does it mean? Less than the headlines might suggest.
Here are three key points to keep in mind while tracking current results – and handicapping future results – in the global clean energy arena:
(1) It’s not a sprint, it’s a marathon. The bragging-rights prize will ultimately go to the economy which manages the best combination of technological innovation, political support, and financial sustainability over many years. Germany and Spain have seen political support for their heavily subsidized systems erode with the euro. The U.S. is in near political grid-lock over how to set that balance. China’s position looks strong on the surface but is hobbled by lack of technology innovation, political accountability and financial transparency.
(2) How high’s the bounce? The U.S. resurgence is due to short-term programs due to expire soon, such as biofuel support programs and energy efficiency measures. Absent a broad national consensus, there is no strong reason to expect the U.S. “bounce” to remain strong throughout 2012, an election year.
(3) The bottom-line is this is a race is against time, not a Sputnik-type competition. For either nation’s efforts to pay off, investment will need to be scaled to a global level by investors, public and private. That won’t happen unless there is a clear middle-way between the extremes which tend to bedevil U.S.-China relations – zero-sum, highly-nationalistic competition on the one hand vs. unrealistic and unsustainable ideas of cooperation on the other.
While the metric of renewed investment vigor in the U.S. is encouraging, the real challenge for the future will be to define and align complementary ‘skill-sets’ in both the U.S. and China so that capital can be attracted and deployed on a global scale through these two massive markets accounting for 40% of the global GHG emissions problem. We’ll need a discerning eye for the different strengths which our two countries can bring as complementary partners in this effort as well as a realistic understanding of our enduringly different systems and values. Regardless of who has the momentary lead in investment level, we need to recognize that there is no path to a sustainable future for either country without clear-eyed, realistically-based and sustained cooperation between the two.
Monday, January 9, 2012
Tuesday, January 10, 2012
Wednesday, January 12, 2012
Thursday, January 12, 2012
Friday, January 13, 2011
One of the strongest attributes of job-creation from the clean energy economy in Greater Philadelphia and its surrounding ‘super-corridor’ (NY/MA through DC/VA) is its balanced profile. Year after year (and despite dynamic swings in the economy), the clean energy economy in this mega-cluster area (and the Greater Philadelphia region in particular) is producing:
- steady and dependable growth above the national average
- a sweet-spot of middle-skill and middle-wage jobs
The following mini-slideshow of data drawn from the new Brookings study Sizing the Clean Economy: A Green Jobs Report (released July 2011) illustrates these trends clearly:
The mini-slideshows in this week’s postings are provided courtesy of Mark Muro, Deputy Director of the Metropolitan Policy Program of the Brookings Institution. They are taken from Mark’s presentation at Philadelphia’s 21st century Clean Energy Opportunity from Regional, National & Global Perspective, a program I organized in cooperation with the Academy of Natural Sciences of Drexel University and the T.C. Chan Center for Building Simulation & Energy Studies on October 11, 2011). I am grateful to Mark Muro and Brookings for permission to share these slides with the readership of U.S./China Clean Energy.
Philadelphia enjoys key advantages in the emerging national clean economy, not least due to its linchpin position at the heart of a vibrant clean energy ‘super-corridor’ running from Albany NY and Boston MA down to Washington DC and northern Virginia (see Monday’s post).
Other advantages that Greater Philadelphia enjoys include: (1) its position as #5 top-performing cluster nationally, (2) its participation in a national trajectory of fast-growing, high-quality jobs, (3) its profile of balance with middle-skill, middle-wage ‘green collar’ jobs; (4) its breadth of clean economy segments (air & water purification, lighting, nuclear, mass transit, professional energy services, solar PV, solar thermal, and wind); and (5) its being home to the U.S. Government’s new Energy Innovation Hub (EIH) and Energy Regional Innovation Center (e-RIC) at the Navy Yard — the Greater Philadelphia Innovation Cluster (GPIC) for Building Energy Efficiency.
What’s the basis of the Greater Philadelphia’s #5 ranking nationally in the Brookings’ first-of-a-kind study Sizing the Clean Economy: A Green Jobs Report released in July 2011? There are five strong reasons, each covered with substantive detail, in the following mini-slideshow:
Tomorrow’s post will focus on the breadth of clean energy segments supporting Greater Philadelphia’s position as a leader among U.S. regional clean energy clusters.
If you want to help make a small push for Philadelphia’s emergence as a 21st century clean energy leader, please tweet or Like on Facebook or +1 this on G+, using the sharing tool below. This will help spread the word. Thanks.
Yesterday’s mini-slide show focused on the five principal clusters in the northeast Clean Energy super-corridor:
- Albany -Schenectady-Troy, NY
- Boston-Cambridge-Quincy, MA-NH
- New York-Northern New Jersey-Long Island, NY-NJ-PA
- Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
- Washington-Arlington-Alexandria, DC-VA-MD,WV
Today’s mini-deck focuses on how the clusters in this super-corridor are creating the right kind of jobs for today’s globally-connected economy:
The findings presented above and in posts throughout the week come from Brookings’ Sizing the Clean Economy: A Green Jobs Report released in July 2011. The PowerPoint slides are courtesy of Mark Muro, Deputy Director of the Metropolitan Policy Program of the Brookings Institution. The video clip is extracted from Philadelphia’s 21st century Clean Energy Opportunity from Regional, National & Global Perspective, a program I organized in cooperation with the Academy of Natural Sciences of Drexel University and the T.C. Chan Center for Building Simulation & Energy Studies on October 11, 2011). I am grateful to Mark Muro and Brookings for permission to share these slides with the readership of U.S./China Clean Energy.
If you want to help push for the emergence of any of these five cluster regions as national and global clean energy leaders, please consider tweeting us on Twitter, liking us on Facebook or +1’ing us on G+, using the sharing tool below. Thanks.
This week, I’ll be providing five mini-slideshows to add context and substantive detail to last week’s post and video clip on Brookings Touts Philadelphia’s Top 5 Strengths in U.S. Clean Economy.
Number 1 in the docket is the Cleantech Mega-Cluster stretching from New England though the southern Mid-Atlantic — with Philadelphia at its center.
The findings for today’s slideshow, as well as those for the remainder of the week, come from Brookings’ Sizing the Clean Economy: A Green Jobs Report released in July 2011. The PowerPoint slides are courtesy of Mark Muro, Deputy Director of the Metropolitan Policy Program of the Brookings Institution. The video clip is extracted from Philadelphia’s 21st century Clean Energy Opportunity from Regional, National & Global Perspective, a program I organized in cooperation with the Academy of Natural Sciences of Drexel University and the T.C. Chan Center for Building Simulation & Energy Studies on October 11, 2011). I am grateful to Mark Muro and Brookings for permission to share these slides with the readership of U.S./China Clean Energy.
If you want to be sure you see this week’s series of posts, please click the “Follow” button on the WordPress toolbar immediately above this blog’s heading and an email will automatically be sent to you as soon as each post appears.
On October 11th, Mark Muro, Policy Director of The Brookings Institution’s Metropolitan Policy Program, presented the national-level chapter of the story of ‘Greater Philadelphia’s 21st century Clean Energy Opportunity’ at an event I organized in Philadelphia for the Academy of Natural Sciences of Drexel University and the T.C. Chan Center for Building Simulation & Energy Studies of the University of Pennsylvania.
According to Muro, Philadelphia enjoys key advantages due to: (1) its position as #5 top-performing cluster nationally, (2) its participation in a national trajectory of fast-growing, high-quality jobs, (3) its profile of balance with middle-skill, middle-wage ‘green collar’ jobs; (4) its breadth of clean economy segments (air & water purification, lighting, nuclear, mass transit, professional energy services, solar PV, solar thermal, and wind); and (5) its location in the middle of the most vibrant clean economy corridor in the country (from Albany NY and Boston MA down to Washington DC and northern Virginia).
Future posts will help tell the other chapters of this story, including the City of Philadelphia perspective (Alan Greenberger, Deputy Mayor for Economic Development), the regional perspective (Mark Hughes, Task Leader for Policy, Markets & Behavior at the Greater Philadelphia Innovation Cluster for Building Energy Efficiency (GPIC), the global perspective (Amy Fraenkel, UN Environmental Programme Regional Director for North America) and the U.S./China strategic opportunity (Terry Cooke, Founding Director of the China Partnership of Greater Philadelphia.
Stay tuned for more!
Note 1: If you want to be sure you see each of these upcoming posts reliably and promptly, please click the “Follow” button on the WordPress toolbar immediately above this blog’s heading and an email will automatically be sent to you as soon as each post appears.
Note 2: See Brookings Backgrounder for additional information on: (1) the Brookings Institution’s Metropolitan Policy Program initaitive for clean energy clusters; (2) the intellectual antecedents of this policy work in the work of Michael Porter at Harvard University; and (3) how David Sandalow and Brookings helped translated this thinking into U.S. Government policy through the closely-connected Energy Innovation Hub (EIH) program and the U.S.-China Clean Energy Research Center (CERC) program (via the John L. Thornton China Center at Brookings).
Note 3: If you want to help push for Philadelphia’s emergence as a 21st century clean energy leader, please tweet or Like on Facebook or +1 this on G+, using the sharing tool below. Thanks.
I was asked today what accounts for China’s outsized role in solar PV , amounting currently to roughly 50% of global share of production despite having a Lilliputian share of global consumption. It comes down to three inconvenient truths. That said, the degree of inconvenience of each truth varies with the point of view (e.g., ‘panda hugger’ vs ‘dragon slayer’ in the U.S. vs ‘patriotic netizen’ in China) of who you happen to be talking with :
(1) Post-WWII, Asia (and notably China since 1982) has had clear advantages of cheaper land, cheaper labor and cheaper facilities relative to manufacturers in higher per capita income markets in the West. Since solar panel production has some basic similarities to the manufacturing process for computer memory chips (which in the 1990s were the basic ‘rice’ commodity of the IT boom in Asia), solar manufacturing has benefited from the natural ‘cluster effect’ of decades of chip manufacturing know-how of Chinese, Taiwanese and other investors on the mainland.
(2) The barriers to entry for solar manufacturers are lower than the earlier tech waves of integrated circuits and bio-technologies so national and local
government in China has seized on it to bootstrap their economies to a higher rung of the global value chain. This has meant various government subsidies (on the producer side) to the point of a casino mentality — more than 100 solar manufacturers in the single town of Dezhou in Shandong Province. (The Chinese government also rounded up and ramped up polysilicon supply when that key input for solar PV production tightened in 2010/11);
(3) There’s not yet an established market for solar products in China so almost everything is exported to Western markets — especially to those national
markets like Germany and Spain and state markets in the U.S. such as New Jersey that have been subsidizing the industry (on the consumer side). [Note: World Trade Organization rules tend to allow/encourage consumer-side subsidies and to sanction producer-side subsidies, hence the recent trade action by the 7 Western solar firms against China. However, these actions take time to work their way through the ‘python’ of WTO process).
As a wrote almost a year ago ( click here for link ), there’s a global boom/bust going on in PV solar and China is in the thick of it.
In 2008 China could be seen rapidly closing the gap with the traditional wind market leaders – the U.S., Germany and Spain. By 2009, China, riding a massive post-GFC stimulus program, became the world’s largest buyer of wind turbine equipment. In that same year, the U.S. managed to maintain its strong pace of wind installations but Spain and Germany started falling off the global pace as post-GFC austerity forced them to drop governmental price supports (so-called “feed-in-tariffs” or FiTs) for wind installations. Finally, in 2010, China surpassed the U.S. in wind-power installations (18.9GW vs. 5.6GW) and emerged as the clear global front-runner for wind-energy purchases and installations.
But three caution flags are now waving for China:
(1) For the moment, there is still a huge asymmetry in the number of installations which GE has made in the Chinese market (over 1,000 in China alone, over 14,000 worldwide ) versus the number of installations Chinese wind-power companies have made in the U.S. market (3 installations, as of December 2010). Moreover, lingering tight credit strongly favors established market leaders when it comes to wind energy projects and, for now at least, financing costs are currently prohibitive for new entrants. This is a substantial market hurdle for Chinese entrants to the lucrative U.S. market, not a government barrier.
(2) In a mid-summer 2011 settlement announced by the Office of the U.S. Trade Representative, the Chinese government agreed to stop subsidizing its wind power manufacturers. This put an end to a six-year, WTO-inconsistent effort known as Notice 1204 and led by National Development and Reform Commission, to favor Chinese suppliers in the manufacture and installation of Chinese wind-turbines.
(3) Earlier this week, China’s government adopted stricter regulations in anticipation of an expected “bloodbath among turbine producers” as reported by the Financial Times on October 24th.
It’s a marathon, not a sprint to the wind-energy future. Far too early to proclaim China the winner.
The China Partnership of Greater Philadelphia (CPGP) is a non-profit organization that promotes collaboration on public/private cleantech initiatives between Philadelphia and the People’s Republic of China. We operate on the principles of openness, inclusivity, and transparency in order to maximize engagement from all relevant stakeholders throughout the Philadelphia area. Our objective is to accelerate job creation, attract investment, and support cleantech business incubation in Greater Philadelphia through strategic linkages to leading Chinese corporate, governmental, and academic organizations. CPGP leverages both established and emerging programs and initiatives including:
- The new $129 million Greater Philadelphia Innovation Cluster (GPIC) for energy efficient buildings, funded primarily by the U.S. Department of Energy (DOE)
- The City of Philadelphia’s 30-year old official Sister City relationship with Tianjin, China. Tianjin, the fastest-growing Special Economic Zone (SEZ) in China, also has a national mandate for clean energy leadership under China’s 11th and 12th Fiver-Year Plans
- The $150 million U.S.-China Clean Energy Research Center (CERC) program, with a dedicated building energy efficiency initiative led by Lawrence Berkeley National Lab (LBNL) in the US and the Ministry of Housing and Urban-Rural Development (MOHURD) in China
CPGP harnesses the Greater Philadelphia region’s broad base of resources and expertise to create synergy between regional and national initiatives in both countries through a single innovative program focused on cleantech jobs, business development, and investment. To support these goals, we have developed plans for:
- Export & investment initiatives including an open-consortium incubator (involving government, academia, business, and related associations) planned for the Philadelphia Navy Yard and leading to a world-class public demonstration facility
- A CEO Summit entitled, “Greater Philadelphia & China: Toward a Sustainable Future,” planned for the spring 2012 focused on four areas: carbon finance, water, green building, and clean energy
- An official U.S. State Department city EcoPartnership with Tianjin, China
- The expansion of our already extensive network of universities and think tanks on the local, regional, national, and international levels.
The Partnership includes members from a wide range of Philadelphia area stakeholders. Business: Capitol Project Partners, The China Business Network, Cozen O’Connor, Delmarva Group LLC, Deloitte, Deutsche Bank, Ecolibrium Group, GreenWorld Capital LLC, HSBC, KSW Consulting, Philadelphia Industrial Development Corp, VerdeStrategy, White and Williams LLP. Government: City of Philadelphia, International Visitors Council. Academic: Academy of Natural Sciences, Drexel University, Penn International Sustainability Association, Temple University, University of Pennsylvania’s T.C. Chan Center. Associations: Global China Connection, Greater Philadelphia China Center for Culture and Commerce. (Note: All work conducted by these organizations is done by individuals on a pro-bono basis.)
For further information, please contact Deputy Executive Director Nora Sluzas at firstname.lastname@example.org