green technology

“Illegal” Green Energy Subsidies

by Brian McGraw on October 15, 2010

in Energy, Trade

In a move that surprised no one, The New York Times reported today that the U.S. agreed to go ahead and formally investigate a complaint filed by the United Steelworkers in early September, accusing China of illegally subsidizing their green energy industry. The original story on the filing of the case is here. A summary of the complaint is here.

Two quotes from the summary, emphasis mine:

The USW petition details the broad range of WTO-inconsistent policies that China has employed to vault ahead of the United States as a leading producer and exporter of green technologies. These practices include discriminatory laws and regulations, technology transfer requirements, restrictions on access to critical materials, and massive subsidies that have caused serious prejudice to U.S. interests. Together, these practices have given Chinese producers an upper hand in accessing investment, technology, raw materials and markets, while foreclosing these same opportunities to U.S. producers. The Chinese government has invested hundreds of billions of dollars to unfairly advantage its producers and exporters, undercutting U.S. companies and workers and distorting billions of dollars of world trade.

China’s massive domestic subsidies to green technology are distorting trade and harming producers in other countries. In its economic stimulus package, for example, China gave more than $216 billion to subsidize green technologies – more than twice as much as the U.S. spent in the sector and nearly half of the total “green” stimulus spent worldwide. These subsidies are helping Chinese producers ramp up production, seize market share, drive down prices, and put global competitors out of business.

The USW are angry that China is subsidizing green energy MORE than the U.S. does. Their language is unclear, but they agree that the U.S. subsidizes green energy, unfortunately just not to the extent that the Chinese do. This article indicates that the stimulus package reserved $43 billion for renewable energy.

The Energy Information Administration estimated that in 2008 annual subsidies for the renewable energy industry were 4.87 billion (and this group makes a convincing case that their estimates are far lower than reality). Does the WTO account for subsidy levels versus total population? If China has four times the population of the United States, can they give a subsidy that’s larger in absolute terms but smaller in relative terms?

I am not a lawyer; it’s possible that certain types of subsidies are legal while others aren’t. Regardless, it is pretty clear that the U.S. has been on the wrong side of numerous international trade violations — and even if not wrong legally, is wrong in spirit here. See the dispute over Mexican trucks, the international gambling ban, the U.S. Brazilian cotton dispute, and many others.

Regardless of how you feel about the accusations of a weak currency (see CEI’s Fran Smith on the issue here), the U.S. cannot with a straight face accuse China of illegally subsidizing its green energy sector. Until the case is resolved, or goes away, this will be another great talking point for politicians who are more than willing to cater to protectionist fears. Nancy Pelosi has already seized the opportunity.

Finally, this is another great time to look at the mission statement of the USTR:

American trade policy works toward opening markets throughout the world to create new opportunities and higher living standards for families, farmers, manufacturers, workers, consumers, and businesses. The United States is party to numerous trade agreements with other countries, and is participating in negotiations for new trade agreements with a number of countries and regions of the world.

The Office of the U.S. Trade Representative (USTR) is responsible for developing and coordinating U.S. international trade, commodity, and direct investment policy, and overseeing negotiations with other countries. The head of USTR is the U.S. Trade Representative, a Cabinet member who serves as the president’s principal trade advisor, negotiator, and spokesperson on trade issues.

The relevant parts are the first paragraph, where they forgot to include “politically favored” when describing businesses and manufacturers (they could also delete consumers from the list and stop pretending). The relevant part of the second paragraph is where they reveal that the USTR is nothing more than a tool of the Obama administration, who has been depressingly bad on trade issues.

Human Achievement Hour

by Michelle Minton on March 23, 2009 · 18 comments

in Energy, Environment, Global Warming, International, Odds & Ends, Private Conservation

This week CEI announced the creation of Human Achievement Hour (HAH) to be celebrated at 8:30pm on March 28th 2009 (the same time and date of Earth Hour).

Our press release described ways people might celebrate the achievements of humanity such as eating diner, seeing a film, driving around, keeping the heat on in your home—all things that Earth Hour celebrators, presumably, should be refraining from. In the cheekiest manner, we claimed that anyone not foregoing the use of electricity in that hour is, by default, celebrating the achievements of human beings. Needless to say, the enviros in the blogosphere didn’t take to kindly to our announcement.

Matthew Wheeland, an environmental journalist called the holiday “mind-blowingly strange” and pondered if Earth hour folks are including in their numbers people in countries that don’t have enough electricity to make the choice to turn out their lights. Of course, they don’t have the choice to acquire electricity whereas anyone can choose to stop using human technology if they wish.

In fact, one might even say that they are seething about it–lighting up the various green-oriented blogs with comments such as this sarcastic gem from Jon Petherbridge:

Human achievement hour. Another great idea. I’ll remember how great we all are as I watch the heat mirages rising from the surrounding hoods as my arm hangs out the window during my next July traffic jam.

Or maybe I’ll remember it the next time an American attack aircraft blows up a wedding party in Afghanistan. At least in that example we don’t have to feel bad for the dead Afghanis as they have a sexist culture that we are morally obligated to obliterate, quite literally if necessary. I reckon I’ll celebrate human achievement hour when everybody’s divorced or bisexual and drinking coca-cola in traffic jams on their way to work folding sandwiches for the lawyers and the bankers who we will worship for allowing us to support them by paying on our credit cards.

Go human achievement hour. Pile it on. Diversify, equalize, refinance and over qualify.

I’m feeling better already.

I love and will not give up my electric toothbrush.

They are also attempting to erase any attention directed at HAH, such as the Wikipedia article.

Of course, there are people out there who appreciate what we are trying to say. For example, Rajesh in India writes on his blog:

Coming from India where we routinely suffer power cuts due to mixed-market policies of the government, I found this post from The New Clarion fantastic…Lets use the wavelength of both light and philosophy to keep darkness at bay.

Green and private conservation are fine. We have no problem with an individual (or group) that wants to sit naked in the dark without heat, clothing, or light. Additionally, we’d have no problem with the group holding a pro-green technology rally. That’s their choice. But when this group stages a “global election” with the express purpose of influencing “government policies to take action against global warming,” we have every right as individuals to express our vote for the opposite

If our Human Achievement Hour is at all a dig against Earth Hour, it is so only by the fact that we are pointing out what Earth Hour truly is about: it isn’t pro-earth, it is anti-man and anti-innovation. So, on March 28th I plan to continue “voting” for humanity by enjoying the fruits of man’s mind.

Show Your Work!

by Iain Murray on March 19, 2009

in Economy, Employment, Environment, Global Warming, International, Sanctimony

Fiona Harvey of the FT is one of the better journalists covering the environmental beat, but I’m afraid that is a bit like saying that someone is one of the better members of Congress. In this blog entry on green jobs she commendably raises some objections to the idea that “green jobs” can be a panacea, but then shows her own biases with an unsupportable assertion:

That said, the move to a low-carbon economy requires such major changes in the way the whole of the economy – from house building to vehicle manufacturing to recycling our rubbish to redesigning our cities – that it is sure to entail a large number of new jobs, which will almost certainly far outweigh the effects of any job losses.

Really? The Heritage Foundation’s analysis of green employment resulting from the weak CO2 restrictions proposed in last year’s Lieberman-Warner bill found a net reduction in American employment of some 900,000 jobs. A German government study found that green technology would only be a positive for employment as long as the country remained a net exporter of the technology, something bound to change as other countries usurped their comparative advantage. A Spanish study by the Instituto Juan de Mariana found that for each green job created in Spain, at least 2.2 “regular” jobs were lost (and also that thanks to the temporary nature of many green jobs, 40,000 such jobs will be lost this year).

Fiona’s assertion reminds me of this statement by Catherine Bennett in The Guardian, 2004:

In short, if we can rise to the challenge, the permanent abolition of the wheel would have the marvelously synergistic effect of creating thousands of new jobs – as blacksmiths, farriers, grooms and so on – at the same time as it conserved energy and saved the planet from otherwise inevitable devastation

The only difference is, Ms. Bennett was clearly joking.

SOTU Watch: Energy Claims

by Iain Murray on February 24, 2009 · 2 comments

in Economy, Employment, Energy, Environment, Global Warming, Stimulus to Nowhere

The President might make various remarks relating to energy tonight. These are likely to center around grandiloquent claims as to the effectiveness of “green jobs” and alternative energy in saving the economy, not to mention the planet. Here are a few notes on the reality of these claims.

Green Jobs: The President will probably claim to be creating millions of “green jobs” to save the economy, fight global warming and end dependence on foreign oil together. In fact, “green jobs” have a number of problems, outlined in my Examiner piece from yesterday. To summarize:
• “Green jobs” come at the expense of traditional energy jobs. At the moment, the wind industry employs 85,000 people in all its facets (including support staff and suppliers). The coal industry employs 81,000 miners alone, and probably over 1.4 million in all, including support staff and suppliers.
• “Green jobs” are more expensive to society in general. Those 85,000 people in the wind industry contribute to the generation of just 1.3 million MegaWatt-hours of electricity, while the coal industry generates 155 million MWh, making each coal industry job seven times more productive than a wind industry job. The difference in cost is born by the rest of us.
• “Green jobs” are mostly low-paid and transitory, according to a recent report by, among others, The Sierra Club and the Teamsters union.
• A German government report found that “green jobs” are only beneficial to the economy as long as Germany remains a net exporter of green technology and power. As soon as other countries utilize their comparative advantages in manufacture and power generation, “green jobs” become a drain on an advanced economy.
• Most “green jobs” are related to the generation of electricity, which is not used to power cars yet, and so do nothing to lower our “dependence” on foreign oil (and most oil we use comes from the US and Canada in any event).

Alternative Energy: The President may repeat his promise to double the use of alternative energy, again claiming effects in terms of climate and energy independence. This claim is, in all probability, disingenuous.
• A doubling of alternative energy electricity production by 2011 would require the main alternatives – solar, wind, geothermal and biomass – together to generate 144 billion KiloWatt-hours of electricity by then. However, under the Energy Information Administration’s “business-as-usual” projections, these industries are expected to supply 150 billion KWh by then, with no additional policies needed. (Note the EIA includes hydropower and wood in its renewables calculations, for the solar/wind/geothermal/biomass figure, see here.)
• Reduction in greenhouse gases as a result of this policy is not likely to occur, as the EIA predicts a similar increase in the use of coal to generate electricity by 2011. In all probability, therefore, we will be emitting greater amounts of greenhouse gases by 2011, not less.
• A “smart grid” is probably a useful technology, but the President and the stimulus plan gold-plated it in order to boost their renewable energy rhetoric. William Tucker has a good summary of what is wrong with the President’s version of a “smart grid” here.
• If the President means that he will double the use of biofuels, this is likely to mean a significant increase in corn ethanol production, resulting in greater diversion of the corn supply into fuel production. This will likely increase already-inflated food costs (the recent price drop would have been significantly greater were it not for ethanol manufacture) and thereby increase food insecurity in a recession. Increased ethanol production is opposed by most major environmental groups as well as free-market groups. See Facts About Ethanol for more.