Talk in Washington; Action in Beijing and Brussels
What's wrong with this headline? In Washington, D.C., there’s an ongoing debate about whether big oil and gas companies should keep their huge tax-payer funded subsidies. Meanwhile, in Beijing, the government is strategically maneuvering to capture the economic benefits of the future clean energy economy. A study released this week concludes that China’s green tech industry raked in $65 billion last year – making it the world’s leader in green tech production by revenue.
The green tech market contributed an impressive 1.3% of China’s GDP, boosting China’s rank based on percentage of GDP to #2. Windmill production giant Denmark scored highest with its green tech sector contributing 3% of its GDP.
The study (conducted by Roland Berger Strategy Consultants and commissioned by the World Wildlife Fund) also ranked the US. Guess what? We’re way down the list at #17.
While our leaders fail to set comprehensive energy policy that steers us toward a green economy, the Chinese have laid out a series of national carbon reduction goals, renewable energy production targets, and incentives to grow the green tech manufacturing sector.
While we debate preserving subsidies for companies in mature industries like oil and gas, the Chinese are building windmills, solar farms, and electric vehicles. And as they make these strategic investments, they are perfecting techniques to cost effectively manufacture the solar panels, windmill generators, and electric vehicle batteries.
Wake up Washington! The game is on. There’s no debate in Europe about the need to expand renewable energy generation. There’s no debate in China about the need to become energy independent. Both have made the decision that clean energy is the future and are taking action. That’s why two other European Union countries find themselves in the green tech top five list for highest GDP percentages - Germany and Lithuania.
The oil executives fighting for their subsidies have one thing right: incentives do create and help grow jobs. Strange how we never hear the oil and gas industry making that point when the renewable energy sector seeks incentives. And unlike the subsidies embedded in the tax code for oil and gas, solar incentives are structured to attract private investment first, which is then met by a very modest incentive. Over the four years of the highly successful California’s Solar Initiative, for example, more than $4.5 billion of private investment flowed into the state as a result of the program according to GreenTech Media. And solar energy production creates more jobs than any other form of energy generation.
So the bottom line is rather than wasting time lampooning oil and gas or debating drilling for oil our government could be making meaningful policy that ignites our green tech industries of the future while it curbs our carbon emissions and weans us of foreign oil. That’s something worth throwing a tea party over.