Renewable Energy Policy Outside the United States
Message from REPP Staff |
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Consider this scenario for the next millennium's first decade: Average global temperatures are on the rise. Antarctic ice sheets crumble, and natural gas prices swing disconcertingly. U.S. political leaders are determined to catalyze the use of renewable energy technologies. They put into place programs to deploy wind turbines, photovoltaic cells, biomass gasifiers, and other technologies. Now the question is, "Where to find the renewable energy technologies?" The unfortunate answer: overseas. In this scenario, dwindling U.S. demand has long since impoverished most American firms. The few that remain have abandoned any interest in domestic markets, and instead have built their factories in Europe, Japan and the developing world. Their former rivals from Germany, Japan, and India dominate the PV industry. Danes manufacture wind turbines. Biomass is the province of the British and the Chinese. Thus, as we wait for investment to return to the American renewable energy sector, we make the only possible decision: we import, abandoning for the moment economic development that would have come from domestic manufacturing and services. Now, add to those conditions a falling dollar—almost inevitable, compared to current exchange rates. The economies of Japan and Southeast Asia rebound. The European Union consolidates and its firms become lean and competitive. Industrial development accelerates in India and China. In short, U.S. renewable energy policy becomes a hostage to the crosswinds of international economics, as well as potential international skirmishes over trade policy. We find this scenario dishearteningly plausible, given current trends. As Curtis Moore and Jack Ihle outline in this report, our allies and competitors have not only crafted renewable energy policies with attention to commercial and consumer finance, community participation, and bold distributed energy policies; many also back up such programs with substantial funding. One purpose of these programs is to increase renewable energy capacity domestically. The other is to build a healthy renewable energy industry that can compete worldwide. Meanwhile, demand for renewable energy in the U.S. has fallen off, as has the American share of the world market for renewable energy. Once the world leader in installed wind capacity, the U.S. has fallen behind Denmark and Germany, with other nations closing in fast. The one surviving U.S. manufacturer of large wind turbines faces a Danish juggernaut. The U.S. photovoltaic industry relies on exports to Europe, Japan, and the developing world for 75% of its sales. British Petroleum has merged with Amoco, giving the resulting amalgam ownership of the only remaining major American PV firm left, and, all told, 20% of the world market. And U.S. geothermal firms have largely turned to markets in Central America and Southeast Asia. These trends should worry us. As Mr. Moore writes in his book Green Gold (co-authored with Alan Miller), "Important properties are passing out of American hands largely because U.S. businesses and U.S. policy makers still believe that economic progress is made despite the costs of environmental protection." In short, America is losing strategic advantage in a set of industries with enormous potential to improve our lives. In the process, we are crippling our future options to deploy renewables. We need to wake up. Examining the policies of our competition is an important start. |
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Renewable Energy Policy Outside the United States |
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