Global economy needs green playing fields, not just level ones

Is a solar panel made in China less “green” if it’s installed in Tallahassee instead of Shenzhen? Does it matter where the raw materials for making wind turbines comes from, as long as the wind turbine itself goes on to generate clean energy?

These are questions that neither international trade laws nor green-energy policies today are equipped to answer.

For example, when the US Department of Commerce looks at Chinese-made photovoltaics (PV), the only green it looks at is money: how much of an unfair advantage do financial incentives from China’s government give that country’s solar companies, compared to US-based firms, and what can be done to even the playing field? (The answer, Commerce officials decided this week, is to impose tariffs of 2.9 to 4.73 percent on Chinese solar PV products imported into the US.)

And whose fault is it that one country (China again) can tie restrictive knots into the global pipeline of rare earth materials so critical for green technologies like electric cars? Not us, say the US, Europe and Japan, which have lodged a trade complaint against China’s export restrictions. But most rare earth mining operations in places like the US shut down a long time ago because China found ways to deliver the goods more inexpensively. Fair? Maybe, maybe not. But it was great for rare-earth-dependent businesses around the globe until supplies were recently tightened.

The problem these two controversies illustrate is the flip side of the climate change coin. Just as carbon emissions anywhere contribute to global warming everywhere, so too do renewables and clean technologies produced anywhere work just as well everywhere. But only if you don’t look too deep.

The caveat, of course, is that renewables and clean technologies produced anywhere can’t be produced without a cost. There’s the input of raw materials and energy (usually fossil-fuel-based) needed for the manufacturing process. That helps determine one crucial measure of how “green” a product really is: energy returned on energy invested, or EROEI. If the energy output of a solar panel made in Factory X isn’t greater than all the energy that went into making it, it’s not worth making, from a sustainability standpoint.

There are other factors to account for as well: environmental and social impacts, for instance. Again, if the overall environmental and social harms created by making that solar panel exceed the benefits, the technology isn’t worth it. And it turns out that many countries in the so-called “developed” world have avoided unpleasant domestic environmental and social impacts not because those were eliminated, but because they were “outsourced” to places like China, in part because environmental and social regulations there were often not as stringent as in other places.

So we find ourselves in a difficult set of circumstances today. Cheap solar panels from China are great for European consumers but bad for European PV manufacturers. And maybe — depending on how much coal was burned in China to produce the electricity needed to power all those PV factories — those solar panels aren’t so good for the Earth in general, either.

In the same way, an abundance of inexpensive rare earth materials from China is great for electric-car-makers — and, presumably, buyers — anywhere … until those supplies become neither so abundant nor so inexpensive.

Just as with carbon dioxide itself, it seems that the only way we can ensure a global “level playing field” for clean energy and green technologies is if we account for all the costs — all the environmental externalities, social impacts, etc. —  involved in making them, and not just the value of this country’s sweetheart incentives for PV firms or that country’s feed-in tariffs for residential solar energy.