Creating a clean economy will not be easy. It will require sustained, consistent, and large-scale investment across many sectors, including transportation, building systems and appliances, energy generation, and of course the electric grid itself. We will need new, more intelligent software and hardware to manage the new demands on the grid.
We'll need a smarter grid, one that will both communicate in real time with customers' devices to help manage peak demand and manage the inflows of renewable energy and plugged-in electric cars. But this is not a single pursuit; it's the connective tissue in a network of new technologies and energy systems. These are multi-trillion-dollar markets, so the opportunities for the countries and companies that lead the charge will be vast. And some governments, especially in China and Germany, are taking this challenge much more seriously than others.
At the country level, I see two core indications of leadership and commitment to the clean energy economy:
On both fronts, a few countries, but China in particular, are going for the gold.
According to a pithy report from Deutsche Bank titled "The Green Economy: The Race is On", in the years 2000 to 2009, the U.S. invested (public and private) about $67 billion in clean technology. Similarly China spent $72 billion and Germany $38 billion. However, as a percentage of GDP, China, Germany, and even Brazil are investing at a rate three times greater than the U.S. On the specific issue of smart grid investment, another report estimates that the U.S. and China far outpace the rest of the world with an estimated $7 billion each in spending in 2010 alone (PDF). Companies like IBM, Siemens, GE, Cisco, and HP have noticed this investment -- and plan to get a piece of the business.
The U.S. economic stimulus package, technically the American Recovery and Reinvestment Act (ARRA), is really kicking in now. ARRA provides tens of billions of dollars for energy efficiency, R&D investment, and new transmission and smart grid investments. According to a recent report in Time Magazine, the Obama administration has turned the Department of Energy into "the world's largest venture capital fund."
This level of investment should not be taken lightly, but the stimulus is short-term. China is doing things differently, making longer-term, sustained commitments that are much larger. The country is already in the process of building 16,000 miles of high-speed rail (that's roughly, oh, 16,000 more than the U.S.). And China is bringing together 16 state-run companies to put one million electric cars on the road within a few years.
But it was the country's ten-year plan that made some jaws drop. Between now and 2020, the country will invest 5 trillion yuan in the clean economy. That works out to about $75 to $100 billion per year for 10 years running (smart grid investment alone is estimated at $60 to $100 billion over the next decade). Imagine the U.S. Congress passing the equivalent of the highly controversial stimulus package 10 times over (not likely).
Since the $100 billion in stimulus spending is significant, it's hard to argue that the U.S. is not investing in the future. It's the second aspect of green economic leadership -- building a strong climate and carbon policy framework that supports the economy-wide shift -- where the U.S. falls short.
Deutsche Bank's report suggests that countries need a policy regime that provides "transparency, longevity, and certainty" to increase investment and get private money off the sidelines. The report lists eight national policy elements that it deems critical, including having a concrete emissions target and a renewable electricity standard, among others. Only Germany and China have put all eight policies in place, while the U.S. has only implemented one in the form of some tax benefits. Unsurprisingly, Deutsche Bank concludes that, "the US is falling behind in the race to develop new technologies, industries, and jobs as the global economy moves towards a low carbon future."
Finally, as an indication of how serious China really is, the country has built the largest solar and wind production industries in the world in just a few years. The government is supporting its renewable energy industries so aggressively and lowering their cost of business so much, that it's likely the country is breaking World Trade Organization rules on fair play.
Even if that's true, you have to admit that China is in the clean economy race to win it. Is the U.S.?
This post first appeared in a series on the smart grid at Harvard Business Online.
Follow Andrew Winston on Twitter: www.twitter.com/GreenAdvantage
I suggest you examine the facts and this article provides a great deal of information:
http://canadafreepress.com/index.php/article/28051
The US government will not invest a greater amount in clean energy because are alot of people who simply don't believe in global warming period. These people would like to have the money instead go to the top 1%. With the political atmosphere swinging to the right lately, you can be sure that Obama will invest even less in liberals causes such as this one in the future provided that he can survive 2012.
Using U.S. Bureau of Labor Statistics (BLS) records of U.S. unemployment data, the impact of U.S. environmental regulations upon unemployment can be seen in the 30 years before, and after, the 1970 enviro-policy explosions:
• The average U.S. unemployment rate from 1940 (excluding WWII) to 1970 was 4.5%;
• The average U.S. unemployment rate from 1970 to 2000 was 6%;
• As environmental regulations expanded after 1970, 30-year average unemployment increased by 33.3%.
California voters can delay the California Global Warming Solutions Act (AB 32) by voting for Prop. 23 on November 2nd. Prop. 23 would suspend implementation of AB 32 greenhouse gas controls until the state’s unemployment rate is reduced to below an unemployment rate benchmark of 5.5%.
California’s Prop. 23 benchmarking of future environmental regulations to economic performance (recovery) should be model for U.S. Government environmental regulations. The “new” U.S. Congress should pass legislation to suspend all pending and future environmental regulations until U.S. unemployment recovers to the post-1970 average of 6.5%. The U.S., and each state, must reset the reckless pace of environmental regulation to an economic benchmark. The ”new green economy” is a green fantasy that should not be a national (or state) priority.
Yeah, well if you can get past all of the human rights abuses and the lack of freedoms. Then its a great place. NOT
All these wind turbines and solar panels will be load balanced by natural gas and coal. Gas is just as filthy as coal mining. Last time the nuclear power train came through it was blocked and in its place came so much coal that now the Eastern seaboard has fish consumption advisories on so many bodies of water it is sickening. You can not even eat these wild fish safely because their is so much mercury in their bodies from coal plants. If we had built nuclear, they would have spewed steam not waste. Additionally we would need a tiny fraction of mined uranium or it could be obtained from old weapons.
Remember, the gas men are waiting to build wind turbines or solar installations, while they smile knowing that they will be feeding gas to it all day long. Gas drilling is far worse than nuclear power. Destroys millions of acres, thousands of streams, dumps tons of toxins into the air at compressors stations. People have not seen how destructive it is yet. Nuclear does not melt down like Chernobyl, we don't even build those plants. Ours shut down with the laws of physics.
Nuclear power plants can't fail- Until they do.
France does reprocesses their spent fuel into MOX fuel. They also put their waste into solid state, store it, and let it weaken in radioactivity. They have the waste, and they use it again. Fear towards nuclear power is not wise. Nuclear weapons are not nuclear power plants, and the plants that would be the best for reducing a proliferation stream and reducing waste are not built because the oil and gas men are subtly supporting certain groups of environmentalists in their wind and solar dreams. Wind and solar can not do it, the gas is doing it now and will do it well into the future if people don't start studying it and nuclear.
If you really care about clean air and water, and open spaces, that aren't defiled by drilling for gas an oil, you will research nuclear power. This is matter of relative destruction, and nuclear wins.
The game changer is a little recognized potential impact of rising solar flare activity. The new eleven year sunspot cycle has begun.
Two solar threat events missed earth so far this year. According to NASA, if either had hit the geomagnetic field surrounding the earth, 130 million Americans live in areas that could lose power for protracted periods of time - perhaps several weeks - at a cost the first year of between $1 trillion and $2 trillion.
Similar to the combined cost to date of both current wars!
See: http://www.aesopinstitute.org
The steps necessary to rapidly reduce dependence on the power grid can accelerate development of inexpensive green systems.
The cost of home installations of solar is on the way down. One new system can be installed in windows, allowing some apartment dwellers to acquire solar power. Fuel cells that can power a home at modest cost are on the horizon.
Accelerating development of decentralized breakthrough systems opens a politically workable way to accelerate the development of cheap green power.
To take the lead in the worldwide race, we need to focus on that objective - since there is no reason to object and Congress can begin to support what needs to be done.
Strong leadership might unite the nation behind such a program and meet the challenge.
And cheap green power will then supersede the time wasting, fruitless debate over climate change.
Why do American writers refuse to discuss the ONLY successful energy policy on earth and go on and on about RES and "infrastructure?" It's bizarre, and obstructionist, because it makes going green look incredibly tedious, slow and expensive - and done with RES and Big Energy, that is exactly what it will be.
The entire success of the German clean energy market derives from ROOFTOP SOLAR that is paid for with a feed in tariff, which is exactly what the US needs. Property values, jobs, local economies, and the environment all benefit. Energy prices drop, no new infrastructure is needed, and WE get the money, not Chevron Solar and BP Wind.
RES is a stinker, FIT is a winner. How many times does that have to be proven before we get to work saving Americans money and decentralizing/democratizing the grid?
Aside from the environmental devastation done by Big Solar and Big Wind and Big Transmission (and the HUGE GHG EMISSIONS from them), they are costing taxpayers BILLIONS of dollars in loans and free money - money that would be much better spent on local, point of use solutions that HELP the economy instead of wasting our money then raising our prices.