The recent World Energy Outlook report by the International Energy Agency tell us that global greenhouse gas emissions are growing dramatically in the developing world. By 2035, world energy demand is expected by 36 percent, and almost all of that new demand – 93 percent of it – is going to come from developing nations.
But the irony is that billions of people there will have an easier time adapting to climate change if they increase their electricity consumption and, given current technology, increase their greenhouse gas emissions. Electricity consumption protects the population from climate change by allowing people to take advantage of technological solutions to climate impacts. In hot, equatorial climates facing an exacerbated risk of climate change, access to air conditioning would allow people to be cooler and more productive during summers. Refrigeration would reduce the risk of food spoilage and the threat of disease. As developing nations increasingly urbanize, their work force will be working inside energy consuming buildings and their workers will be using computers and other pieces of energy consuming capital.
As energy consumption rises to meet the challenge of adapting to climate change, it then exacerbates the overall global risk of climate change, unless the development and diffusion of renewable power technology decouples economic development from greenhouse gas production. Imagine an economy in which our electricity is generated by renewable energy. As we phase out fossil fuel fired power plants and gasoline vehicles, we would cap our greenhouse gas emissions while allowing us to continue to enjoy a high standard of living.
Today, the powerful state government in China is offering strong incentives such as low interest rate loans and cheap real estate to promote the growth of its green tech sector.
“But much of China’s clean energy success lies in aggressive government policies that help this crucial export industry in ways most other governments do not. These measures risk breaking international rules to which China and almost all other nations subscribe, according to some trade experts interviewed by The New York Times.”
International intellectuals such as the New York Times’ Tom Friedman have forcefully argued that China’s big bet on renewable investment means that U.S. green tech entrepreneurs will suffer because we will lose the race for cornering the market for the next big export product.
But, Friedman is wrong. Green innovation is not a zero sum game. In fact, when China invests in green tech, we all benefit. China’s investment in the development of intellectual property offers an excellent example of how globalization and trade in intellectual property will foster overall global sustainability. Its investment raises the probability of true breakthroughs. There is a certain irony in celebrating China’s role as an exporter of innovation. In the recent past, China has benefited from importing (at very low cost) intellectual property such as Microsoft Windows. Now, China can reciprocate and be “generous” in sharing its “green” intellectual property with less-developed countries. If developing nations can cheaply purchase the new renewable power products (i.e., solar panels and wind mills), then we could get the power we need without increasing the risk of climate change.
During this time of recession and job insecurity, it is politically incorrect to point out the social benefits of trends that may cost the U.S green jobs in the short run. Some U.S. firms will lose out to rising Chinese firms. To achieve global sustainability goals (especially in the absence of a global carbon tax), we need to encourage unilateral efforts by nations to accelerate the growth of the green economy. If China is willing to play the role of the “green guinea pig”, then such investments should be celebrated as helping us collectively to achieve true sustainable development.