China expresses ‘regret’ at US renewable energy policies probe

China’s Ministry of Commerce (MOC) Saturday expressed "regret" over a US government decision to investigate China’s renewable energy policies, and said it would defend its interests in accordance with World Trade Organization (WTO) rules.

Responding to a complaint by the United Steelworkers union, the Obama administration Friday said it has opened a trade investigation into China’s allegedly protectionist policies that, among other things, may illegally subsidize manufacturers of wind turbines and other renewable-energy equipment.

In September the United Steelworkers International Union accused China of investing hundreds of billions of dollars in Chinese manufacturers of wind energy, solar power, advanced battery equipment and other low-carbon energy technologies.

The Chinese statement accused the United States of subsidising up to 2,300 energy-related programmes, including clean-energy projects, making the US criticisms of China "unjustified".

Trade tensions have dogged China and the United States over the past year, particularly allegations that China keeps its yuan currency artificially weak to boost its export competitiveness.

China’s wind power can reach 230 GW of installed capacity by 2020, which is equal to 13 times the current capacity of the Three Gorges Dam.

The unilateral US move, under a procedure called Section 301, could set the stage for retaliatory US sanctions on Chinese goods if China does not change its policies.

"The union’s complaint is groundless and irresponsible" as both parties should act in line with WTO rules, said an official with MOC’s Bureau of Fair Trade for Imports and Exports in a statement.

While the world is working toward improving the environment for the welfare of human kind, the US. move sent the wrong signal that the US did not support China’s efforts to that effect, the official said.

The US was subsidizing up to 2,300 energy-related programs, including clean-energy projects, which made the US criticism of other country’s environmental efforts unjustifiable, said the statement.

The US should enhance collaboration with other countries in clean energy and meet climate and environment challenges together, said the statement.

GOP Attacks on Stimulus Wind Power Money: Hot Air By Michael Grunwald

The National Republican Congressional Committee (NRCC) has borrowed a populist Democratic theme for its latest round of attack ads, featuring red flags, menacing-sounding songs, and Asian calligraphy fonts to accuse vulnerable House incumbents are outsourcing jobs to you-know-where.

"Tim Walz helped create jobs in China!" "Mike McIntyre: Jobs in China, not North Carolina." The brassiest spot ends with a cartoon image of Cultural Revolution-style upraised fists: "He’s created massive debt here, while he created renewable energy jobs over there. Barron Hill: For Indiana, or China?"

These cookie-cutter ads, to put it mildly, are half-baked. But they come with an interesting back story. The renewable energy program that the NRCC is trashing was part of President Obama’s stimulus bill — or, as the ads call it, "the $800 billion failed stimulus." It’s helped prevent the collapse of the American wind industry, and it’s created thousands of American jobs; like the stimulus in general, it’s helped advance Obama’s long-term goal of weaning the economy off carbon as well as his short-term goal of saving the economy from a second Great Depression. But like the stimulus in general, it’s also creating political headaches for Democrats — at least partly self-inflicted. (See the best viral campaign ads of 2010.)

"These ads are completely at odds with reality," says Liz Salerno, director of industry data and analysis for the American Wind Energy Association. "This myth about jobs has just been snowballing. It couldn’t be more opposite to the facts." (Where did the transportation stimulus money go?)

For what it’s worth, here are some facts.

When credit markets froze in 2008, the U.S. wind industry froze as well. Since the first Bush Administration, Congress had extended bipartisan tax credits to promote renewable energy projects, but after the financial meltdown those credits became virtually unusable; when no one has profits, no one needs tax credits. Wind projects were stalling, and turbines the size of 747’s were lying in fields; the industry was bracing for a 50% decline in new capacity in 2009. So the American Recovery and Reinvestment Act provided nearly $2 billion in direct grants to wind projects, in effect "monetizing" the tax credits. (See Grunwald’s viewpoint on why the stimulus wasn’t a waste of money.)

The results were immediate and impressive. The industry came back from the dead to add a record 10,000 megawatts in 2009, almost a 20% increase. AWEA credits the stimulus with saving at least 40,000 jobs in construction, engineering, trucking and yes, manufacturing. According to the Department of Energy, the U.S. only imported 40% of the components for its wind turbines in 2009, down from about 80% in 2006. And according to the International Trade Commission, less than 5% of those components came from China. In a Facebook posting in February that helped inspire the Republican wind-bashing, Sarah Palin claimed that "80% of the $2 billion they spent on alternative energy went to purchase wind turbines built in China." In fact, only 3 of America’s 33,000 turbines were built in China.

The case of Iberdrola Renewables, headquartered in Portland, Ore., helps illustrate the program’s impact. After Lehman Brothers collapsed in September 2008, Iberdrola delayed 500 megawatts worth of wind projects in Illinois and Texas. "We were reallocating capital around the globe," recalls senior vice president Don Furman. "We were really stuck." But the day the stimulus passed, Iberdrola’s chairman announced he would pour $6 billion back into U.S. projects; the company has already generated an additional 1,800 megawatts with stimulus funds, supporting an estimated 9,000 jobs, and it has launched another nine projects in seven states. "Overnight, we were back in business," Furman says. "Without the stimulus, we were looking at drastic cuts."

See why Obama doesn’t want to call his next plan a "stimulus."

Those 9,000 jobs were American jobs. But Iberdrola Renewables, it must be said, is the U.S. subsidiary of a Spanish company. That shouldn’t come as a surprise, since foreign firms still rule the wind industry — largely because they’ve enjoyed such generous subsidies for so long. But back in March, reports that nearly three-quarters of the wind grants went "overseas" inspired the talking points that ended up in the Republican ads. It was four Democratic senators who raised the initial outcry about outsourcing in the stimulus, even though they had supported the legislation. "The point of the stimulus was to create jobs in the United States, not in China," Senator Charles Schumer of New York said at the time. "There is a race going on to pioneer the next generation of clean-energy technologies. We should be building up our domestic industry, not subsidizing our foreign competitors."

The truth is the stimulus is blasting unprecedented cash into U.S. factories for clean-energy products, including solar panels, electric cars and advanced batteries as well as wind turbines. It’s a bold experiment in industrial policy, and the results won’t be clear for decades. But it’s already clear that without domestic wind demand, we wouldn’t have a domestic wind industry. It’s also clear that without the stimulus, we’d have much less demand, and much more outsourcing. (Is offshore wind power worth the trade-offs?)

Yes, Iberdrola’s projects inevitably provide some jobs for foreigners; the average wind turbine includes 8,000 components, and while the U.S. now supplies most of its own towers and blades, we’re still importing electronics and other parts. But most of the jobs created by Iberdrola’s U.S. projects are done by its 875 U.S. employees, and by U.S. installers, truckers and steelmakers as well as manufacturers. "The point isn’t the name on the polo shirt," Salerno says. "Foreign investment is a good thing — it creates jobs here." (Read more about how the stimulus is changing America.)

By the way, wind energy is also a good thing. It reduces our reliance on fossil fuels that are baking the planet and empowering foreign thugs. And the stimulus is also pouring billions of dollars into high-voltage transmission lines that will help connect rural wind projects to population centers. But the Administration and its Democratic supporters have made the mistake of marketing the stimulus almost exclusively as a jobs program; as long as unemployment remains sky-high, it’s going to be judged harshly.

Similarly, it’s Democrats who tend to traffic in the populist alarmism about outsourcing and China that’s being used against them on TV. They can rightfully argue that the Republicans are hypocrites; the stimulus is full of made-in-America provisions that limit outsourcing, and GOP leaders fought them all the way. But some of those provisions are pretty silly; for example, requiring the Department of Homeland Security to buy American-made uniforms just harms the Pakistani textile industry and fosters anti-American resentment at a time when we’re deeply invested in the economic and political stability of the region. (See TIME’s Green Design 100 for 2009.)

Environmentally, the world will be better off if the U.S. and China both invest heavily in renewable energy. Economically, the world will be better off if the U.S. and China both create millions of green jobs. The lesson of globalization is that the world doesn’t have to be a zero-sum place, for better and for worse; our subprime crisis can crater your economy, and your sovereign debt crisis can crater our economy. But if globalization is a double-edged sword, so is anti-globalization rhetoric. And the Democrats who have lived by it might die by it in November.