China is prevailing in the global race for green jobs in sectors from solar panels to advanced lighting, and appears to be on an unstoppable upward path, an annual report by cleantech research firm Clean Edge said on Wednesday.
The Chinese government spent $34.6 billion last year to propel its low-carbon economy, more than any other nation and almost double what the U.S. invested. The country is now headquarters for six of the biggest renewable energy employers—up from three in 2008—according to Clean Tech Job Trends 2010.
Ron Pernick, managing director of Clean Edge and a report author, called the economic giant’s “meteoric” surge “very striking.” But, he said, it is “not a fait accompli that China will dominate” across the entire industry.
There is “serious competition on the global playing field,” Pernick told SolveClimate News.
The report said clean energy is spawning millions of high-paying green jobs worldwide, even as the global economy continues to sputter.
Total jobs surpassed three million in 2009, recent data from global research group REN 21 finds. China accounted for 700,000 of that amount, due in large part to measures that promote solar heating.
But Brazil, South Korea, Germany, Japan, the U.S. and other nations are still very much in the game, as clean-energy manufacturing grows and becomes more complex.
Clean Edge identified more than two dozen top cleantech job sectors, including solar energy storage, green building materials and smart-grid devices.
The authors said the findings should dispel naysayers’ claims that green jobs merely displace employment in other sectors and add no new net jobs.
“Clean-tech jobs are not amorphous as these critics claim, and instead represent some of the most dynamic sectors in the technology landscape,” the report said.
“There’s no way that any country is going to dominate in every one of those,” Pernick said, adding, “The cleantech revolution is going to be a highly dispersed one, and highly distributed.”
“Wake-Up Call” for U.S.
Still, Pernick called China’s emerging dominance a “wake-up call” for U.S. lawmakers. “Time is running out for us to take a more serious, concerted approach…at the national level,” he said.
The U.S. government devoted $50 billion of the $800 billion federal stimulus package to develop cleantech factory jobs. “But results of this attempted manufacturing revival in the U.S. are decidedly mixed,” the report said.
Some 70 percent of the parts in renewable energy installations are manufactured overseas, according to estimates from the Apollo Alliance, a coalition of environmental groups, labor unions and politicians.
Part of the reason is cheap labor costs in Asia. But Clean Edge also faults the lack of a federal renewable portfolio standard (RPS) that would require more use of solar, wind and other sources, and provide a long-term market signal to manufacturers. Around 30 countries have such policies in place, including China, which has targeted 15 percent of its energy from renewables by 2020.
“We believe that the lack of a strong and robust RPS puts countries like the U.S. at a significant disadvantage,” the report said.
Another policy absent in America is a national feed-in tariff program like the one that made Germany the world’s largest market for solar power. The U.S. also needs significant regulatory and financial support, including “billions in loan guarantees,” the report said.
“There are no subsidy-free or regulatory-free energy sources on the planet—whether it’s oil, natural gas, coal, nuclear, wind or solar,” Pernick said.
Silicon Valley Leads, Houston Surprises
In the U.S., solar power continues to create the most green jobs, followed by biofuels, smart grid, energy efficiency, wind power and clean vehicles, the report said.
California is the national leader, with four of its cities in the top 15 metro areas for cleantech jobs. San Francisco and Silicon Valley ranked first, with Los Angeles coming in second, San Diego seventh and Sacramento fifteenth.
If it passes, “it would reduce the leadership of California and set up a roadblock on their ability to mandate emissions standards and a regulatory framework,” Pernick said. However, he noted that it would not be “the end of the world,” especially given the state’s new 33 percent renewable energy goal by 2020.
New polling data by Reuters indicates the measure is headed for defeat by a margin of 49 percent to 37 percent.
After California, Boston, New York and Denver are the next hottest spots for green jobs.
Houston was the biggest surprise, the study said, leaping from 15th to eighth place in one year, driven by the city government’s commitment to buy wind power and a local biofuels boom.
Is Mexico the Next China?
Even if the U.S. could shrink China’s green jobs lead, it would still have to contend with a rising Mexico, the report suggested.
“With a combination of cheap labor and geographic proximity, the United States’ third-largest trading partner is attracting attention from those looking for low-cost access to the North American clean-tech market,” the authors said.
So far, Japan-based Sanyo has established a factory in Mexico to churn out solar photovoltaic panels. BP Solar and Michigan-based thin-film maker Energy Conversion Devices recently revealed plans to do the same. In the wind sector, German equipment manufacturer Liebher has constructed a facility in Monterrey to make parts for the American market. Pernick predicts battery manufacturing plants could be next.
“It’s not just low-cost manufacturing in China” that the U.S. has to watch out for, Pernick said: “It could be low-cost manufacturing south of the border.”