Green technology may spark new U.S.-China trade boom
www.chinaview.cn 2009-09-06 11:03:36   Print

    by Matthew Rusling

    WASHINGTON, Sept. 5 (Xinhua) -- Many experts foresee a green trade boom between the United States and China due to their enormous energy demand, but when that will come and how large it will be remain unclear.

    Energy experts differ so widely in their opinions on the issue that those who look forward to a boom consider its potential "huge." Others, however, are more cautious in their outlook.

    "It's going to be huge because it has to be huge...there is no choice but for the sector to become enormous," said Julian L. Wong, a senior policy analyst at the Center for American Progress.

    Wong cited the International Energy Agency's forecast that 26 trillion U.S. dollars will be needed by 2030 to meet global energy demands.

    With both China and the United States planning cuts in carbon emissions, the two -- the world's largest energy consumers -- can play leading roles in developing renewable energy equipment and technologies, experts say.

    For its part, the U.S. announced recently that it would provide tax credits worth 2.3 billion dollars to companies manufacturing clean energy equipment. The move falls in line with U.S. President Barack Obama's goal of making America the world's largest renewable energy exporter.

    Jing Su, director of the U.S.-China program at the American Council on Renewable Energy, said America could provide technology to help China convert its infrastructure to lower carbon platforms.

    "Many low carbon zones and cities (in China) are being planned," she said. "(Green) technologies for mass transportation, building efficiency and power generation are greatly needed."

    China is calling for more technology transfers from the U.S. and Senator John Kerry, a Democrat from Massachusetts, said recently that the United States would push toward that goal.

    "If the U.S. is willing to engage fully with China in bilateral cooperation or joint research and development, it will mean a transfer of technological assistance," he said.

    Wong called the recent launch of a joint U.S.-China research project to produce more fuel-efficient motor vehicles and buildings an important first step, despite its modest 15-million-dollar budget.

    "I see great potential to link China's great demand to build transformational infrastructure (using) technologies here in the U.S.," she said.

    Su went even further to predict a close partnership between the United States and China.

    Su said technology such as carbon capture and sequestration -- the process of removing carbon dioxide from the atmosphere to mitigate the effects of greenhouse gasses -- would require collaboration from both countries to bring it to maturity.

    This is the "key component" of the solution to climate change in the short term, she said.

    Nicholas Hope, director of the Center for International Development at Stanford University, described green trade opportunities as "limitless." He said solar energy could become a significant power source.

    "I don't think we've exhausted the technological capacity of solar," he said.

    Some major U.S. investors have taken interest in China's emerging solar energy sector. Investment banks Goldman Sachs and CDH Investment announced in December that they would pour nearly 100 million dollars into the Himin Solar Energy Group, a China-based solar module manufacturer. The funds are earmarked for research and development as well as boosting the company's growth.

    China is gaining ground in the solar industry. China-based Suntech, fox example, is on its way to overtaking Germany-based Q-Cells to become the world's No. 2 provider of photovoltaic cells behind U.S.-based First Solar.

    But some U.S. solar firms fret that they can't compete with their Chinese counterparts because the latter have access to cheaper electricity and less costly labor.

    Wong warned that some issues over protectionism and tariffs could arise, but said there is more to gain from the free flow of goods and knowledge than from erecting walls.

    The green energy partnership will not necessarily be a one-way street, either, Wong said. Some new technologies could also flow to the United States from China, the world's leader in advanced coal combustion, she said.

    The two countries, Su said, need to move beyond lip service and begin developing tangible plans for action in their green energy cooperation.

    An agreement signed at the recent U.S.-China Strategic and Economic Dialogue calls for deeper ties on clean energy technology but provides little information on what shape that cooperation would take.

    Details may emerge in December at the UN Climate Change Conference in Copenhagen, Denmark.

    Philip Levy, resident scholar at the American Enterprise Institute, however, said it remains unclear how large the market for green technology will be and whether it will dominate trade in other products.

    "I'm not sure we are all going to forget about oil and go for green technology," he said. "When you look at the United States and China, it's very ill-defined how big the market is going to be."

    A U.S. "cap and trade" bill -- companies buying permits to emit carbon with the government setting limits on emissions -- won't take effect until well into the future as lawmakers are still pushing it through Congress. That may mean U.S. demand for green energy could remain low for years to come.

    Also unknown is the cost of saving energy for U.S. factories aiming to cut carbon emissions. Some companies may find it cheaper to purchase pollution permits than shell out large sums for new carbon-reducing products, Levy said.

    Despite high hopes, alternative energy is still not as efficient as fossil fuels and it remains unknown when, and if, that efficiency will improve.

    "It's hard to say whether this will be a giant booming market or whether it will be (a) small boutique market," Levy said.

Editor: Li
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