Clean Tech in Copenhagen: A Key Solution to Climate Change

Clean tech is very much on the radar screen here in Copenhagen as a key solution to climate change.  The U.S.-based Solar Energy Industries Association (SEIA) and the European Photovoltaic Industry Association (EPIA) have just released a report entitled “Seizing the Solar Solution: Combating Climate Change through Accelerated Deployment.”  The report estimates that a combination of photovoltaics (PV) and concentrated solar power could deliver 15 percent of U.S. electricity by 2020. Moreover, along with European PV, these technologies could reduce CO2 emissions by nearly 1 billion tons annually while creating some 6.3 million jobs.

Our team was present today in the U.S. Pavilion as Secretary of Energy Steven Chu launched a new $350 million, five-year Renewables and Efficiency Deployment Initiative (Climate REDI). This initiative was spearheaded by our former NRDC colleague Rick Duke, now U.S. Deputy Assistant Secretary of Energy for Climate Policy.  As shown in more detail here, the initiative will be designed to cut the cost of existing clean technologies, such as advanced energy efficient appliances, solar home systems and LED lamps, in order to make them affordable for people without access to electricity. In addition to lowering costs, the program will focus on enforcing quality assurance mechanisms for these products and coordinating international standards, labels, information programs and incentives for high-efficiency appliances in order to dramatically scale-up market penetration worldwide. The program will receive an $85 million infusion from the U.S. which is separate from the U.S. contribution to the major climate financing package that will likely be announced later this week. It is also separate from the $150 million U.S.-China Clean Energy Research Center that was announced during President Obama’s trip to China in November.

I gave a presentation this afternoon about unlocking the potential of energy efficiency in China at an exciting side event hosted by the Alliance to Save Energy entitled From Paradox to Paradigm: The Role of Energy Efficiency in Creating Low-Carbon Economies, chaired by European Parliament Members Claude Turmes (Luxembourg) and Lena Ek (Sweden), featuring remarks from the CEOs of Rockwool International and Siemens Building Automation. (Side note: Frances Beinecke was slated to give this presentation but she was stuck in the Bella Center registration line for most of the day).  I was more than willing to pinch-hit for her on this topic, since I am also the President of the China-US Energy Efficiency Alliance. The Alliance, which was the brainchild of Environmental Entrepreneurs (E2) members Peter Liu and Bob Epstein, is a nonprofit public-private partnership dedicated to combating global climate change by promoting energy efficiency as the cleanest and least expensive energy resource in China.

Frances’ presentation astutely pointed out that energy efficiency represents over one-third of the total CO2 emission reduction potential in China, and could avoid about 2.4 billion tonnes of CO2 emissions by 2030.  Most of China’s impressive success to date in slashing its energy intensity has been focused on the industrial sector, which constitutes about two-thirds of its energy demand. But the only way for China to achieve its new carbon intensity target will be to focus aggressively on unlocking the energy efficiency potential in China’s buildings.

In NRDC’s joint report with the Boston Consulting Group, From Grey to Green: How Energy Efficient Buildings Can Help Make China’s Urbanization Sustainable, we showed that reducing energy use in all of China’s buildings by 70% (which we did in our pathbreaking Agenda 21 project, the first LEED-certified green building in China), would avoid the need to build 550 new coal-fired power plants in China each year.  But even a more modest goal – cutting energy use by half in only 5 percent of existing buildings and 60 percent of new buildings by 2015 – would be equivalent to removing all the cars from the roads in Sweden, Norway and Denmark.

Copenhagen is swarming with representatives from clean tech companies and organizations eager to take advantage of the new opportunities that an international climate agreement would unlock.  For example, I attended a reception hosted by the U.S. Business Council for Sustainable Energy and spoke to a number of people interested in collaborating on clean tech projects in China, including Katherine Hamilton, President of the GridWise Alliance, and Jared Blum, President of the Polyisocyanurate Insulate Manufacturers Association. A group of 200 Chinese companies and organizations also issued a joint statement in Copenhagen supporting China’s new carbon intensity target and vowing to explore models of low carbon economic growth (see my colleague Jingjing Qian’s blog here).

Over the last several years, China has taken dramatic steps to grow its clean energy industry, in part because it recognizes that climate change and energy security pose significant threats to China’s own economic and social stability. It is using a number of smart policy tools to foster the growth of renewable energy, including targets, subsidies and feed-in tariffs (we hear that a national solar feed-in tariff of 1.15 RMB/kWh will be rolled out after Copenhagen).  As a result, China has been steadily improving its ranking on clean tech development.  According to Ernst & Young’s latest report on global renewable energy, China has moved ahead of Germany to become one of the top two most attractive locations in the world in which to invest in renewable energy projects, second only to the United States. 

Tom Friedman has skillfully chronicled the rapid growth of China’s clean tech industry and warned the US to ignore it at our peril. The best way for the US to continue its leadership role on clean tech is to enact strong climate and energy legislation. But we should also recognize that China’s efforts to promote renewable energy are serving to bring down costs worldwide and provide jobs all along the global supply chain. I discussed this with Polly Shaw, Director of External Relations at Suntech America, at last month’s US-China Green Tech Summit in Beijing.  Polly said that Suntech, a China-based company which recently opened its first solar PV manufacturing factory in Arizona, has boosted the bottom line for American polysilicon suppliers such as MEMO of Houston Texas (about 70% of the value of a panel is polysilicon), as well as American thin film production equipment manufacturer Applied Materials, not to mention producers of all the wires, cables, inverters and trackers that go into a PV panel. Seems that the solutions to climate change are becoming as global as climate change itself.