Will China Clean Our Clock in Cleantech?

Nat GoldhaberGoing Green | Always OnSeptember 28, 2011

Walls all the Way

China Then: Very Serious About Walls

China Then: Very Serious About Walls

China Now: Very Serious about Energy

China Now: Very Serious about Energy

United States: Serious About Solar?

Cherchez la Reptile

Energy Independence vs. Environmentalism

The United States is not serious

Meritocracy = Entrepreneurship

Entrepreneurship = Growth

2008 2015 2020 2025 2030 20350

50

100

150

200

250

SOURCE: Energy Information Administration, International Energy Annual

China

United StatesQu

adri

llio

n B

tu

3.0%Annual Change

0.5%Annual Change

Total Energy Consumption

2008 2015 2020 2025 2030 20350

20

40

60

80

100

120

SOURCE: Energy Information Administration, International Energy Annual

China

United States

Coal Consumption United States & China, 2008-2035

Qu

adri

llio

n B

tu

2.4%Annual Change

0.3%Annual Change

Entrepreneurship - Dirty Coal

500

200

138

100

50

0

Cost of Growth

• People in 56% of Chinese cities breathe dirty air• Annual cost of air and water pollution is 5.8% of GDP (4.3% health + 1.5%

non-health)

5

12

3

4

Very Good Level

Good Level

Unhealthy LevelAvoid Intense Outdoor Activities

Extremely Unhealthy LevelAvoid Outdoor Activities

Dangerous LevelStay Home, Reduce Physical Activity

Bad LevelSensitive People should Stay Indoors

AIR

QU

AL

ITY

LE

VE

L

API Influence on Health

9%

35%

56%

SOURCE: World Bank, Deutsche Bank

Cleantech at Heart of 12th Five-Year Plan

Energy 2015 Target

Reduction in Energy Use 16% reduction per unit of GDP

Reduction in carbon dioxide emissions 17% reduction per unit of GDP

Power industry investment RMB 5.3 trillion

Use of non-fossil fuels as a percentage of total energy use

11.4% by 2015; 15% by 2020

SOURCES: (1) China 12th Five-Year Plan(2) Xinhua, Chnia plans RMB5.3 trin investment power in next 5 years, 22 Dec 2010

Serious About Cleantech

United States China0

5

10

15

20

25

30

35

Efficiency & Low Carbon Tech/Ser-vices

Biofuels

Other Renewables

Solar

Wind

$34.6B

$18.6B

Investment by Sector (2009)

Serious About Wind

SOURCE: World Wind Energy Association

• China now represents half of the world’s installed wind power capacity• Chinese wind power capacity is targeted to grow 6-7x by 2020

35.159,0

25.810,0

40.180,0

44.733,02010

2009

2010

2009

Investment in Wind Power Capacity($ in billions)

Serious About Solar

Solyndra Trina Suntech JA Solar Yingli Solar$0

$1

$2

$3

$4

$5

$6

$7

$8

Chinese Development Bank Loans to Chinese Solar Companies

United States Loan Guarantee

BIL

LIO

NS

Serious About Hydro

2008 2015 2020 2025 2030 20350

5

10

15

20

25

SOURCE: Energy Information Administration, International Energy Annual

China

United States

Qu

adri

llio

n B

tu

1.5%Annual Change

4.8%Annual Change

Serious About Cleantech Leadership

US China0

2000

4000

6000

8000

10000

8000

10000

2/3 are not

US citizens

PhDs Engineering Students

Rx for U.S. Cleantech1) H1 Visas and Green Cards

Rx for U.S. Cleantech2) Get Serious

Rx for U.S. Cleantech3) Streamline Regulations/Permitting

BrazilUnited States

Canada*Italy

Japan*Indonesia

BelgiumGermany*

Hong KongIndia

MalaysiaMexico*

Netherlands*Singapore

Taiwan*Thailand

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%

15.0%15.0%14.5%12.5%7.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%0.0%

SOURCE: American Council for Capital Formation

Rx for U.S. Cleantech5) Tax Policy & Incentives

Clean our Clock…?

Where We Win

• China’s advantage Low cost labor Manufacturing efficiency Instant permitting (or none) Minimal environmental and labor regulations Low cost of capital

They make good stuff cheap

Where They Win

We Both Win

… Thanks to China

Loaning us money to buy their goods…Thanks again

$1,400,000,000,000