US, China at loggerheads over renewable energy

At the turn of the century, China had faced heavy criticism from the EU and US, for the countrys perceived lack of regard for initiatives to support energy conservation and control of the emission of pollutants. However, during the past decade the Chinese government has implemented a series of reforms to curb the emission of greenhouse gases and switch from burning fossil fuels to renewable sources of energy. Chinas state-run Xinhua news agency reported that "in 2006, the government launched ten major energy-conservation projects, estimated to have stopped the burning of 240 million tons of standard coal from 2006 to 2010" and the following year, it announced a "timetable for different regions to close down their old and polluting production facilities in 13 industries, including power generation, steel, cement and glass production industries". Last year, investments in clean energy projects in the country increased by 30 percent over the preceding year to reach $51.1 billion; making China the most aggressive country in terms of measures to mitigate the risks of climate change. The countrys efforts have been recognised by UN Secretary-General Ban Ki Moon and environmentalists across the world. However, the US and EU are fuming over some of the steps taken by the Chinese in this regard. Particularly unnerving for the Western economic super powers are subsidies announced under Chinas current five-year plan for wind turbine and solar panel manufacturers. US Interna-tional Trade Commission data show that China shipped solar panels worth $1.4 billion to the US, in the Jan-July 2011 period, alone. In UK, prices of solar panels have plummeted by as much as 30 percent, just this year and experts are not ruling out further decrease by the end of 2011. As a consequence, sales of Chinese solar panels have gone through the roof there. While consumers in developed economies have pounced on cheaper energy solutions from Chinese manufacturers; manufacturers of similar technology in these countries have taken a severe pounding. Just this month, California-based solar panels manufacturer, Solyndra, collapsed becoming the third major US-firm in the business to fall to Chinese competitors. Now the US is gearing up to take on the Chinese, not by reducing costs for their own manufacturers but by lobbying for action against the Chinese government for anti-competitive practices. US-based solar panels manufacturers are expected to file a complaint with the US International Trade Commission in Washington. This complaint will pave the way for a complaint at the WTO against China. For its part, the Chinese government has maintained that subsidies for this industry and other manufacturers of renewable energy sources are highly effective in furthering the cause of energy conservation. It is interesting to note that even as the US prepares to drag China to the WTO over the matter; many states within the "land of the free" have propped up trade barriers of their own to protect the local industry. But highlighting the contradictions of US policy will hardly suffice for China. Experts agree that the Kyoto Protocol in itself has proved to be futile for significantly curtailing the emission of greenhouse gases, particularly from countries such as the US which remains the worlds biggest polluter. What is needed is greater cooperation between emerging economies such as China and India and the developed economies of the West for collective efforts to substitute the use of fossil fuels with environmentally-friendly energy production. Although trade protectionism runs contrary to free trade ideals, it is no secret that Chinese manufacturers have raced ahead of international counterparts by concentrating on cutting costs of producing solar panels and wind turbines while Western firms remained fixated on investing in newer solutions. Consistently declining costs of renewable energy technologies may bode well for prospective consumers in developing economies such as Pakistan. It is also irrefutable that any sustainable efforts to arrest the deterioration of the environment and counter climate change can only be made through complete cooperation between the worlds economic giants since they are the biggest polluters. Hence, prudence demands that the current impasse over subsidies for Chinese firms producing renewable energy technologies should be resolved through constructive dialogue instead of retaliatory trade protectionism.