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Dale Wen om US WTO case in China Dialogue

Here is a comment regarding the US United Steelworkers complaint against China regarding clean tech subsidies. It was published at the China Dialogue web site:

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Pointing the finger the wrong way
By Dale Jiajun Wen

October 19, 2010

America’s largest union has persuaded Obama to investigate China’s cleantech subsidies – a protectionist move that will only hinder green progress and foster climate scepticism, writes Dale Jiajun Wen.
“If China is blamed no matter what it does on climate, what better evidence is there to convince people that climate change is merely a western conspiracy to constrain the growth of developing countries?”


On September 9, the biggest union in the United States, United Steelworkers, filed a 5,800-page petition under Section 301 of the Trade Act of 1974, alleging that the Chinese government has violated international trade laws by providing hundreds of billions of dollars in illegal subsidies to its green-technology producers and exporters.

The organisation asked the US government to initiate an investigation and bring this case before the World Trade Organisation (WTO) – and on Friday last week (15 October), Barack Obama’s administration obliged, announcing the launch of a probe into the complaints.



A US union complaining that China is not joining the race to the bottom? This sounds shocking. It is true that China is investing more in renewable energy than the United States. According to a report by US-based non-profit The Pew Charitable Trusts, in 2009 China ploughed US$34.6 billion (231 billion yuan) into clean energy, while the United States only invested US$18.6 billion (124 billion yuan), 0.39% and 0.13% of their GDPs respectively. But isn't significant investment in fossil-fuel alternatives what every country needs to do in order to reduce greenhouse-gas emission as well as to generate green jobs? In this regard, Spain, which pumped 0.74% of GDP into clean energy in 2009, and the United Kingdom (0.51%) are also in the front ranks.

On September 22, a panel of experts including those from United Steelworkers and BlueGreen Alliance (a labour-environment alliance initiated by United Steelworkers and the Sierra Club) gave a joint briefing in Washington DC entitled “Leveling the Playing Field – Clean Energy Subsidies in China: A Briefing on the United Steelworkers’ Section 301 Petition”. One cannot resist asking: do we truly need such a “level playing field”, where everybody talks about the necessity for renewables and low-carbon development, but doesn’t act on it? Why can’t United Steelworkers ask the Obama administration to support green jobs with real deeds instead of empty words? Instead, they attack China for doing the right thing, the thing the US government should itself be doing.

To give it fair credit, the BlueGreen Alliance is still trying to spin the petition to highlight the need for domestic action. In a September 9 press release, the organisation stated: “Today's Section 301 petition filed by the United Steelworkers underscores the importance that the United States act quickly to take advantage of the job-creating opportunities of the clean energy economy. Every day America delays action is another day that China capitalises on jobs created in the production of clean energy technologies that could and should be developed, manufactured and installed in the United States.”
Unfortunately, this does not change the fact that the 5,800-page petition largely focuses on what is wrong with China instead of discussing what is wrong with US domestic policy. You can guess the outcome – it is almost part of human nature that if a problem can be framed as “somebody else’s” (in this case, China’s) then people lose the incentive to search for solutions at home. The real problem here is quite obvious: lack of ambition and coherent national policy in the United States.

Discussing this issue, a German friend commented: “There are people who prefer installing wind turbines or making solar panels, there are people who prefer pushing papers. The problem with America is that, in this land of lawyers, more and more people prefer pushing papers. What hope exists for the US manufacturing industry if even the labour unions prefer pushing papers with their 5,800-page petition instead of installing wind turbines?” A 2009 report in the Guardian newspaper indicated some potential for positive change, with blue-collar workers pushing for green jobs, but the potential has not yet been realised. And, for many observers, the hope is dashed by this lengthy document of finger-pointing.

To be honest, China's rapid expansion of renewables, especially the solar industry, does have problems. Despite the recent increase in subsidies to domestic users of PV panels, more than 90% of Chinese-made solar panels still go to overseas markets, largely because solar electricity is so much more expensive than energy from conventional sources. Given the high energy cost of PV-panel manufacturing and related pollution, some Chinese experts are questioning the green credentials of the PV industry, or even suggesting it is nothing but a new, low-end manufacturing sector for China.

Obviously, the Chinese government needs to fine tune its renewable policy to address these concerns. But on the global scale, China is certainly moving in the right direction. A 2009 UNDESA report called for a global green new deal to mobilise substantial public resources – in the order of US$500 to US$600 billion (3.3 trillion yuan to 4 trillion yuan) a year – to tackle energy poverty, while over the next 10 to 15 years driving the price of renewable energy down to levels where it can compete with fossil fuels and be affordable for the global poor.

We should be glad that China is doing its bit with its serious commitment to renewables. It is probably not enough against the backdrop of the colossal challenge of climate change, but it certainly shines in comparison to the inaction of the United States. What an irony that a US union is seeking to penalise China for doing it.

In order to slow down and eventually reverse dangerous climate change, we need a positive competition, a race to the top and a race to the future, which in this case means that, instead of finger pointing, US workers need to ask their own government to at least match China's support for renewables. Given that the United States is the richest country in the world, it should do much more. In the light of the bailout and huge subsidies the US government lavished on the banking industry, the manufacturing workers are justified in complaining and lobbying for more support. They deserve sympathy in this regard, but their chosen target of the complaint is utterly misguided.

A friend from the United States commented that China is in an impossible position: “Either (the Chinese) don’t take action on climate and we slap a BTA [border tax adjustment] on your imports, or take action and we challenge your support of green tech.” She is right on the mark. The number of Chinese climate sceptics has grown since Copenhagen, largely as response to unreasonable China-bashing on the issue. One scary yet common response to Mark Lynas's widely distributed article blaming China for the summit’s failure was, “Let's unite with the US right wing to destroy the stupid European climate agenda.” Needless to say, this knee-jerk response is wrong in many respects, but that does not change the sad fact that Mark Lynas's article has probably done more to discredit the climate issue among the Chinese population than all the western sceptics combined.

I have been in China for the last month, spending many hours talking to sceptics. I described the negative impacts of climate change on agriculture and rural livelihoods that I have already witnessed in many parts of rural China, trying to convey the message that the science of climate change still stands despite problematic climate politics. Now I am deeply concerned that this new development of US climate protectionism will push people further away. If China is blamed no matter what it does on climate, what better evidence is there to convince people that climate change is merely a western conspiracy to constrain the growth of developing countries?

Many of my Chinese environmentalist friends and I are doing our best to salvage the integrity of the climate agenda. In this context, this petition really feels like a stab in the back. I think it is a challenge for all people who are seriously concerned about climate change and environmental sustainability as a whole: for the last two years, the climate politics has been largely abducted by US internal politics, which seriously and increasingly undermine the integrity of the climate issue. One sceptic already said to me: “This US union blames China for supporting renewables too much. Not surprising. What do your western green friends say about this?”

I will stop here and pass the question to all green friends: what is your answer to this? It is up to every one of us to show with our words and our deeds that the climate issue is a common issue for humankind, and not just an issue for the green lobby, the renewable-energy lobby or any other special interest group.
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