The U.S. may have lead the IT revolution but it’s clear China is intent on leading the green revolution. The contrast between the two countries is stark when it comes to green energy. While Congress dithered over the passage of a renewable energy / climate change this spring and summer, China invested $11.5 billion in renewables. Underscoring China’s growing green clout, a recent Ernst & Young ranking put China ahead of the U.S. as the most attractive country to invest and develop renewable energy projects.
The Department of Energy or the Commerce Department (the two agencies spearheading the Obama administration’s green policies) no doubt paid close attention to the Ernst & Young ranking. The United SteelWorkers (USW) union also got riled up enough to launch a broad challenge against China’s green sector, claiming that the country’s wind and solar companies are being supported by unfair subsidies in the form of tax credits and cheap bank loans.
That deep support, the USW explains, is leaving U.S. companies unable to compete and costing American jobs. “These practices have enabled China to emerge as a dominant supplier of green technology,” USW President Leo Gerard said in a conference call Thursday. He added that the deep subsidy package supporting China’s renewable energy industry were “a direct violation of the obligations China undertook when it joined the WTO.”
The USW has asked the U.S. Trade Representative Office to begin negotiating with their Chinese counterparts and if those negotiations fail, file a complaint with the Geneva-based World Trade Organization (WTO).
China’s leadership has bet that its economic growth depends on its ability to manufacture and sell cleantech and renewable energy technology. And so, over the past couple of years the country has emerged the most aggressive investor and its companies have grabbed market shares at home and abroad.
The administration has 45 days to engage in talks with their Chinese counterpart or file a complaint with the WTO. Chances for a U.S. / China showdown in Geneva remain slim. The reality is that until now the Obama White House has not pressed the Chinese on some of the issues raised by the USW and in some instances, has actually opted to cooperate and in fact help the Chinese green economy.
We don’t expect much to come of the complaint.
VC and PE Watch
Richard Branson, the famously inexperienced British billionaire, announced that he personally invested an undisclosed amount in biofuel maker Solazyme.
JIT Solaire, a French developer of turnkey photovoltaic solar projects, scored a €3 million ($3.8 million) investment from Axa Private Equity.
Former Good Energies CIO Sven Hansenjoined London-based fund Zouk Ventures as a partner.
According to Ernst & Young red China is the leading enertech investment destination, ahead of the U.S. and its so-called free market. The U.S., despite all its talk for a green economy, populated by well paid green collar jobs, is paying the price for its inability to bring the sort of clarity and certainty that are currently helping turn China into the world’s leading green economy!