Feb 11 - McClatchy/Tribune



Of the 10 largest wind power companies in the world, the United States has one - General Electric. Of the world's 10 largest solar companies, we have two - First Solar and SunPower - but almost all their manufacturing is in Asia. Hydropower and geothermal companies are also located in the Far East.

The United States, with no national goal or policy framework for clean energy, simply hasn't found a way to create a stable marketplace where large, renewable energy companies can thrive. For a nation that consumes 25 percent of the world's energy, our failure to compete is ominous, and all the more troubling because a veritable "clean energy gold rush" has begun.

Multinational bank HSBC reports that this sector's value already tops $500 billion a year, larger than the global aerospace and defense industries combined. What's more, the bank says the clean energy market will be worth $2 trillion in 10 years - the biggest economic development opportunity ever quantified - and it's up for grabs. Those who will cash in, Deutsche Bank concluded in a report that followed HSBC's, will be countries with smart policies.

China, for one, is sprinting ahead. It has moved swiftly to create goals and policies to capture market share, announcing recently that it will generate 15 percent of its energy from renewable sources by 2020, and that it intends to become the world's largest exporter of clean energy technologies. China is also mobilizing hundreds of billions of dollars using pricing policy to seize control of these markets. It's working. Five years ago China essentially had no presence in wind or solar manufacturing. Today, China is the largest maker of wind turbines and solar panels.

 Determination and policy are creating a juggernaut.

Even with growing unemployment, America seems incapable of recognizing a golden opportunity. With no goal or effective policy framework, not only are we shipping oil dollars to the Middle East, we are watching our solar, wind and other renewable energy dollars begin flowing to Asia. In the 40 years since the first oil shock, U.S. economic orthodoxy has allowed roller-coaster fossil fuel prices to thwart the development of domestic clean energy manufacturing. When oil and gas prices decline, demand for renewable energy products collapses. If we don't correct this problem, the United States will lose its ability to capture a meaningful share of the booming clean energy market, despite having invented these technologies at Energy Department laboratories.

We need to change - quickly. The United States must create policies that support long-term, stable demand for clean energy production to encourage companies to invest and create jobs. Tax credits, the policy Washington has long favored, do not create such demand alone. Legislated requirements for minimum generation of renewable energy, currently employed by some states, are useful but insufficient for providing certainty to banks and investors about customer demand. A price on carbon, through a cap and trade mechanism or a tax, would definitely help, as it does in Europe.

Another proven policy tool used by our competitors in Europe, Japan and China - long-term, guaranteed purchase contracts would provide an enormous boost and could be implemented quickly by states and cities.

These contracts guarantee steady demand and competitive prices for manufacturers so they can confidently build factories and create jobs. Without the economic security of guaranteed purchase contracts, companies will keep relocating overseas. Evergreen Solar, an up-and-coming solar manufacturer just pulled out of Massachusetts because the U.S. solar market is unpredictable. Where is Evergreen going? China.

In a sign of hope, the state of Vermont and city of Gainesville, Fla., legislated guaranteed purchase contracts last year.

Gainesville's mayor reports the transformation in her city's energy market has been swift, with jobs and companies now flocking to take advantage of the guaranteed market. By itself, with just 115,000 inhabitants, Gainesville will triple Florida's installed solar energy generating capacity in the first year of its program. A similar multiplier is expected in Vermont, where 50 megawatts of clean energy generation will be installed this year thanks to guaranteed purchase contracts. The United States needs to decide rapidly whether it wants to own this future or pay for it. With proven ways to move forward, it isn't too late. A $2 trillion gold rush in clean energy can and should focus the minds of policy-makers.

ABOUT THE WRITER

Michael Northrop is the director of the sustainable development program at the Rockefeller Brothers Fund. Readers may write to him at: Rockefeller Brothers Fund, 475 Riverside Drive, Suite 900, New York, N.Y. 10115; e-mail: Mnorthrop@rbf.org.

This essay is available to McClatchy-Tribune News Service subscribers. McClatchy-Tribune did not subsidize the writing of this column; the opinions are those of the writer and do not necessarily represent the views of McClatchy-Tribune or its editors.
 

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