Efficient energy cooperation
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While there has been high profile conflict between the United States and China over energy issues, quiet cooperation does exist, in the form of decades of joint work on energy efficiency standards and through a new, but under-funded, US-China Clean Energy Research Center.
2009 ended with an unproductive US-China standoff at the Copenhagen Climate Summit and high-level tensions have developed over China's rapidly scaled-up production and global sales of renewable energy technology - specifically solar panels, wind turbines, and batteries for the burgeoning electric vehicle markets - and China's dominance in the production of rare earth elements for advanced electronics.
However, China's incredible acceleration of production and sales of clean energy technology is the result of necessity. China has become the world's largest energy consumer, and while its coal resources are vast, 70 percent of China's energy and 80 percent of its electricity come from coal, no other nation pays as high an environmental cost for energy than China, which has no other path to continued growth and energy security than through renewable energy efficiency. To meet the rising demand, China invested more than $50 billion in clean energy in 2009, twice as much as the US.
The US, too, is dependent on coal, 49 percent of its electricity in 2010 came from coal, and energy is the largest component of the US' annual imports, with crude oil accounting for 38.4 percent of the US trade deficit in 2009.
But both nations have made clean energy investment central to their recent national stimulus plans and the two countries need each other in order to build a clean energy economy for the 21st century.
China is arguably the most important proving ground for clean energy scale-up, as China needs energy to grow, and can propel renewable sources to the center of the global energy system. While the US has a nimble and efficient research and development system.
Signs exist that the governments of China and the US can cooperate to create an environment where clean energy companies compete to the benefit of us all. The US company First Solar signed an agreement in May 2010 with the Ordos city government in Inner Mongolia autonomous region to develop the world's largest solar power plant. Once formalized, it will allow First Solar to bring its advanced photovoltaic (PV) technology to China while leveraging its experience in large-scale PV power plants. China's Suntech, which is setting up its first manufacturing plant in Arizona, will be able to reduce the time, cost, and emissions in its manufacturing process, while creating hundreds of jobs.
An ideal area for joint-development is a smart grid; where advanced technology from the US joins forces with a fast-growing market in China to deploy clean energy transmission, distribution and storage infrastructure at utility-scale. Indeed, the market is already speaking louder than politics as General Electric recently signed a strategic cooperation agreement with the State Grid Corp of China and the Chinese Academy of Sciences to jointly develop smart grid standards. More such partnerships are needed.
Nuclear energy is another area where the two countries are cooperating. China's total nuclear capacity will reach 70-80 GW by 2020, accounting for 6 percent of its total energy use and perhaps a fifth of the global industry. In 2007, the State-owned China National Nuclear Corp partnered with Westinghouse to build four third-generation nuclear reactors for an estimated $8 billion to supply power to China's coastal cities. Demand in China for advanced nuclear power technology translates into a huge market for US companies.
The US, too, is investing heavily in nuclear energy with over $60 billion in loan guarantees available for the industry. The most efficient form of industry support, of course, is market opportunity, and the US and China could harmonize and cooperate on transparent standards for nuclear reactor performance, safety, and secure waste management.
If such cooperation grows everyone will benefit.
Professor Daniel Kammen is the chief technical specialist for renewable energy and energy efficiency at the World Bank Group. Gang He is a guest researcher with the Institute of Environment and Economy at Peking University.
