US

Green energy has potential to bolster Sino-US ties

By Lin Boqiang (China Daily)
Updated: 2010-10-08 07:49

XIAMEN, Fujian - In the wake of global financial crisis, all the countries are starting to reassess the old development modes and to seek new growth engines of economy. They are addressing climate change, not only having a stake in environmental protection, but also in a future economic growth mode.

United States President Barack Obama's new policies, which put energy policy at the core, indicate that green industry would become the engine of the economy. The new energy industry is regarded as an important means for the US to recover from the financial meltdown and maintain its dominance in the 21st century.

Meanwhile, China's breathtaking pace toward industrialization and urbanization is constrained by resource scarcity, concerns of energy safety and its high energy cost. Besides, to develop clean energy is an important way for China to honor its commitment to reducing carbon emissions.

Therefore, clean energy is an excellent way of cooperation for China and the US.

During the second round of Sino-US Strategic and Economic Dialogue in May, nearly half of the 26 agreements were related to clean energy, which sent a clear message that the great potential and common interest in new energy cooperation between the two countries have been fully understood.

Some are worried the technological barrier may stand in the way. I don't share the view.

On the one hand, the US government and the country's enterprises have invested heavily in new energy application and conservation and have yielded ample results. As a mature economy, the US is witnessing an increasingly mature energy structure and wide application of energy-saving technologies. Thus, it's hard for the US to make any major breakthroughs within a short period in this regard.

On the other hand, as the biggest developing country, China's glittering economic growth is maintained by an extensive form of development featuring high energy consumption and emissions.

China's rapid growth and heavy reliance on coal as the major energy source leads to much lower energy efficiency and higher carbon emissions per GDP when compared with developed countries.

Besides, due to the insufficient investment in developing clean energy in the past, we have to introduce advanced technologies of other countries.

Looking at the bright side, China not only abounds in solar and wind energy resources, but also has a great market yet to be tapped in the application of new energy technologies.

So, China and the US are highly complementary in new energy cooperation. As to the technological barriers, it's just a matter of time and rounds of negotiations.

We should cooperate with each other for the sake of trade. Obama has called for redoubling US exports to reverse the long-existing trade deficit. Obviously, exporting new energy technologies to other countries can be a bright choice.

China, at the same time, is challenged in the international community on carbon emission reduction. With the carbon tariff gaining more popularity in the international trade system, we have to quicken our pace to develop clean energy to make our products more competitive in the export markets.

However, this is not necessarily a win-win game. The US expects to cash in on China's huge market and foster the industry into a new growth point of economy by exporting its technologies to China. Actually, the adoption of new energy will inevitably bring up the energy cost.

At the extreme, if all countries develop clean energy and utilize them all on their own, their economies will suffer due to higher energy cost. Only by gaining the edge of technology and management expertise and exporting them to other countries can the clean energy industry truly benefit an economy.

The author is a professor with China Energy Economy Research Center of Xiamen University.