Why Europe Wants U.S. Cleantech Leadership
From the war in
Afghanistan to economic recovery, the world often looks to
Washington for guidance.
But recently, sitting in a packed Capitol Hill caucus room, I saw a
parade of foreign clean energy pioneers teach spellbound American
power brokers about leadership.
There at the American Council on Renewable Energy’s Phase II Policy
Forum, it became clear that we have been the ones waiting for
marching orders.
Energy Change at the Heart of Political
Power
Everything from the window treatments to the columns in the hallway
outside signaled that we were in the very heart of U.S. political
power. And ACORE is one of very few groups that can get such a
prime spot on the Hill for its own policy powwow. Coming from just
across the street, one of the first to address the ACORE crowd
early that Friday was Senator Jeff Bingaman of New
Mexico.
Bingaman, sponsor of the American
Clean Energy Leadership Act (S. 1462), was the first of several
speakers who asserted that greenhouse gases and other noxious
emissions do serious damage to the U.S. economy, and that the
market is not yet factoring the environmental, economic, and
health-related costs of carbon-intensive energy generation.
Yet Bingaman and others from policy and industry grew in chorus
throughout the day to make the case that renewable energy is “its
own task” - not just a component of emissions reduction plans.
In a letter on November 16, Bingaman
told President Obama that through a Clean Energy Deployment
Administration (CEDA), his energy bill could create 350,000-500,000
jobs in R&D and implementation over the next decade.
That point - that clean energy should be considered as a
wide-reaching economic change - was really driven home when Hermann
Scheer, a legislator in Germany’s Bundestag, gave voice to the
international urgency of America’s clean energy transformation. In
prodding the businesspeople and policy types I sat with to action,
he flipped D.C.’s “go it alone” attitude on its head.
A Message from Europe: Don’t Wait, Go On!
Hermann Scheer is something like a Founding
Father of international clean energy policy progress. He was
instrumental in the crafting of Germany’s feed-in-tariff (FIT),
which kickstarted a national clean energy employment boom that now
finds Germans with 8 times as many jobs in wind energy and solar
power per capita than the United States has.
And if he wanted to, Scheer could have asserted with his insistent
hand gestures and Teutonic emphasis, that the U.S. should move in
lockstep with the European Union or the United Nations. But he
didn’t.
Essentially, Scheer said not to wait for anyone, especially the
traditional energy concerns - the “coalition of postponers,” as he
put it - to approve a massive green power buildout. With every year
that complacency is excused, America falls further behind.
After all the bashing of Old Europe in the Rumsfeld era, it was a
bit surprising to hear Scheer encourage American
exceptionalism.
“No
technological revolution in the last 200 years happened based on an
international treaty. Not one!” Encouraging action over reaction,
Scheer refused to shed crocodile tears for energy industries that
will be phased out during clean power implementation. “Nobody said
ten or fifteen years ago that we should slow the introduction of
laptops because we should protect the typewriter
industry!”
So why would this firebrand from
southern Germany travel to D.C. to prod a national renewable energy
boom that will compete with his own country?
Well, the Ernst & Young Renewable Energy Attractiveness Index
consistently ranks the U.S. as the most appetizing market on earth.
Chalk that up to size and potential.
For all their trailblazing, European economic chiefs would give
anything for access to a robust American market. The U.S. is still
the strongest economy in the world; in recent generations,
Germany’s very economy was restored with American money and
ideas.
Scheer has seen a shift “from a fuel-driven business to a
technology-driven business” that can compete far beyond Germany’s
borders. By emphasizing technology over raw resources, Germany’s
historically strong automotive and chemical industries have been
reinvigorated. And entrepreneurs from other European countries are
all gearing up to compete with an American cleantech boom that they
see as inevitable.
I’ve personally spoken with many
policymakers and businesspeople over the years about the
segmentation of the American market along state lines and differing
regional priorities. The overall feeling I get from them is genuine
confusion as to why Washington hasn’t taken the reins.
As it stands, even the U.S. stimulus package has served to do more
for foreign clean energy companies than to stimulate a homegrown
generation transformation. Leo Gerard, head of the United
Steelworkers Union, pointed out that the 85% of clean energy
spending under the American Recovery and Reinvestment Act is going
offshore.
If Ed Markey has his way, dog-eat-dog competition will ensure that
renewable energy money stays in the States.
“A Darwinian, Paranoia-inducing Marketplace”
Congressman Edward Markey knows that the worldwide market in
cleantech is expected to rocket past the half-trillion-dollar mark
by 2020. He wants a stake in it, with Washington taking the lead to
help homegrown companies avoid the “Green
target=”_blank”>Valley of Death.”
That’s where many good ideas die
because money simply costs too much from private sources. The
government is in a position to help long enough to usher startups
through the danger zone and into market viability. Morgan Stanley’s
Jeff Holzschuh had already told the ACORE gathering that capital
markets simply aren’t big or deep enough to provide stage-1
financing like government can.
“Our job is to create a
Darwinian, paranoia-inducing marketplace.”
Ed Markey, a Massachusetts liberal Democrat, didn’t sound like a
bleeding heart at the ACORE conference. He sounded like a rabid
capitalist: “Our job is to create a Darwinian, paranoia-inducing
marketplace.” Past the initial incubation period, Markey said, he
would like nothing more than for the government to “get out of the
way.”
It’s happened before in telecommunications. Markey was involved
back then, too. The end result of D.C. loosening its grip on the
frequency spectrum while encouraging innovation is that today’s
high-speed, wireless data flow would be completely unrecognizable
to Alexander Graham Bell.
Sadly, much of the energy world looks pretty much the same as it
did in Bell’s day.
Markey’s calls were echoed all day by people like BP Wind Energy’s
John Graham, who wants policymakers to establish a value chain
based on clear carbon pricing. In telecoms, policy moves helped
make American companies like Qualcomm (NASDAQ: QCOM) and Nextel
(NYSE: S) leaders worldwide. Their domestic success brought prices
down, enabling poorer countries like Kenya to leapfrog fixed-line
infrastructure and achieve maximal efficiency as their markets
develop.
When it comes to a decision between products from the U.S.,
Germany, Denmark, or even China, consumers from those countries
won’t even be the main people entrepreneurs need to impress.
Kevin Parker of Deutsche Bank Asset Management said that by 70% of
target=”_blank” title=”Green Technology Sector”>clean energy
technology demand growth by 2030 would come from companies
outside the 30-country Organization for Economic Cooperation and
Development (OECD, or “rich country club”). That means that a
sizable portion of the people we want to sell energy products to in
the future probably have no stable household energy supply
today.
That’s a promise for market-based growth that the United States
should be happy to take the lead on.
In the coming days, you’ll learn about an unlikely cooperative
effort between America’s top technology minds and some of the
world’s most entrenched petroleum partisans. Stay tuned.
Regards,
Sam Hopkins
International Editor
You can return to the main Market News page, or press the Back button on your browser.
