I like McDonald’s. In fact, I may be one of the few people who actually enjoys seeing, and occasionally eating at, the golden arches when I travel in Asia. However, when I saw that McDonald’s was the chief U.S. corporate sponsor for the World Cup and Yingli Solar was representing China, I was left with this niggling feeling that we weren’t quite matching up. Somehow World Cup sponsorhip became a metaphor for the willingness of the United States to live in the past while China is out pushing a vision of the future.
Now, I may well be making a mountain out of a molehill. But this does lead to a bigger point—we have to get our energy act in gear. If anything good can come out of the BP oil spill, it will be President Obama leading the charge to reform our country’s energy strategy. The president managed to use the global financial crisis to make headway on financial regulatory reform. Why not use the BP oil spill to push our country into a new energy world and, in the process, assert U.S. leadership globally in the clean energy field?
The President did begin such a discussion in mid-June in his speech about how to address the devastation of the oil spill, but the White House is far from laying out a strategy. At the very least, I think we ought to pull a few pages from China’s playbook and focus on TIF—Trade, Investment and Finance.
First, if we are going to push for free and open trade in the clean energy sector, we are going to have to fight hard against China’s support for indigenous innovation. In the face of an enormous foreign outcry, the Chinese have taken a step back from their position that clean energy technology needs to be home grown—from research and development to deployment. However, the debate rages on in Beijing. Many Chinese believe that they should foreswear foreign technology in the near term (and accept the negative environmental and efficiency consequences) in order to develop their own technologies and control their own market over the long term. These aren’t rules that we should play by.
Second, we need an investment strategy: not so much for our investment abroad but rather for foreign investment here at home. When the Chinese clean energy companies come calling, which, by the way, they already are, let’s learn from them. They need to put some roots on the ground here by building a factory, establishing a research center, and, when applicable, sharing technology. We should not be too proud to learn from the Chinese way of doing business. After all, the country has been growing at 9-10 percent per year for three decades.
Finally, we need a financing strategy for energy projects abroad. The Export Import bank recently declined to provide financing for a U.S. company to be involved in constructing an ultra-supercritical coal-fired power plant in India on the grounds that we don’t want to support a fossil fuel-based power project. Admirable, yes. But practical? Probably not. India has coal and desperately needs energy. We need jobs. Short of Integrated Gasification Combined Cycle, which is out-of-sight expensive, ultra-supercritical power plants are the best bet for a country that is going to use coal. We might as well get the political credit and economic benefit that participation will bring.
If Yingli wants to eat lunch at McDonald’s, great. I just don’t want them to eat G.E.’s lunch as well.