China Ramps up Renewable Targets 50% - What About US?

Senior Chinese officials are publicly musing about ramping up their renewable energy standards 50% over previous targets just two years ago. Unencumbered by the democratic process, these statements signal the Chinese government is making a significant shift in their titanic economy towards clean tech.

Meanwhile in the US, the political sausage-making continues apace. Late last month the watered down Waxman Markey bill passed the House and moves to the senate where further concessions to Democrats and Republicans alike may be necessary to get what’s left of the climate and energy bill to Obama’s desk.

Will this latest news from China affect evolving national renewable energy standards in the US? Probably not - beltway politics is notoriously myopic and often motivated by pork rather than principle. However, this significant signal from the world’s number-two economy may remind those senatorial swing votes that the world does not end at their state boundaries.

Obama clearly recognizes the geopolitical strategic importance of emerging renewable energy technology. When he committed billions in stimulus spending towards clean tech, he was unequivocal: “the nation that leads the world in creating new sources of clean energy will be the nation that leads the 21st century global economy.”

However, the way things are shaping up, that nation may not be the US. The hazing ritual that greeted the Waxman Markey bill in Congress resulted in drastically reduced renewable energy standards that some observers believe may actually result in less future renewable capacity than no energy bill at all.

Meanwhile, China already has a GDP of $7.8 trillion and is on-track to surpass the US economy by 2025. By 2050, the Chinese economy will be 150% larger than the US, and India may push America to number three spot.

At 9,000 GW, China is already close to the US in generating capacity and is expected to exceed America in the near future with an increasing reliance on renewables.

China is also America’s largest creditor, holding more than $2 trillion in US treasury reserves and counting. In short, whatever vague signals drift out of the opaque political leadership in China are a very big deal.

US politicians are accustomed to the world waiting for Washington to take the lead, but the times they-are-a-changing. The latest comments from senior government officials signal that China is moving their economy rapidly towards clean tech, regardless of what the US Senate chooses to do.

According to the China Daily, Xie Zhenhua, vice-minister in charge of climate change policy said that renewable energy is expected to account for 10 percent of the country's energy resources by 2010 and 15 percent by 2020.

Zhang Xiaoqiang, the NDRC's vice-minister in charge of international cooperation, was more ambitious. "Personally, I think we could reach the target of having renewable sources make up 20 percent of total energy consumption."

Bear in mind that these latest statements, in the state-run publication, represent a 50% increase in renewable targets over the official position just two years ago.

China, like Obama, recognizes that renewable energy represents a new kind of superpower race. Chinese leadership also enjoys a significant advantage over what is politically possible in the US since they don’t have to bother with the pesky process of democracy.

Energy Secretary Steven Chu intimated as much last May when he lamented that progress on renewables was not limited by science or policy, but by domestic political opposition from powerful interest groups.

Today’s New York Times divines the entrails of that opposition by showing that a strong Waxman Markey bill may be the death knell of the powerful US coal industry. No wonder there has been such a concerted push back in Congress.

While Washington can choose a go-slow approach for the benefit of the US coal industry, the rest of the world is clearly not waiting. Another strong opinion piece by Thomas Friedman takes the pulse of the rapidly changing clean tech sector in China compared to the sluggish steps so far on this side of the Pacific. 

While the US coal industry is not to be trifled with, there are far more powerful forces in the world of geopolitics. A few mild statements by Chinese officials in the state newspaper may have just shifted the political landscape in China, and in Washington.

So what does this have to do with clean tech sector? Stimulus spending is useful to credit-starved renewable sector but what far more urgent is strong and clear domestic policy so investors and innovators can make informed business decisions.

This story is far from over and we will keep you posted on the latest twists and turns.