Harry Reid’s ‘Green China’ myth

Christopher Horner Senior Fellow, Competitive Enterprise Institute
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In a media call this afternoon, Senate Majority Leader Harry Reid announced that he has seen the future, and it works. It’s “green energy” in Red China. That this green-energy absurdity continues to get so much play at such high policy levels is little short of terrifying.

Reid sees China making things, hears talking points about how they’re also widely using green contraptions, and argues ever more feverishly that we must do something that China is not in fact doing, the double-whammy binge of mandating and heavily subsidizing alternative energy technology.

Here’s the truth, which we already know, even if some people insist on ignoring it:

— Non-hydro renewables, despite considerable government support, make up less than 1 percent of China’s energy portfolio — which is not projected to change in coming decades. As Bjorn Lomborg wrote just last week in the Washington Post, “China was responsible for half of the world’s production of solar panels in 2010, but only 1 percent was installed there…solar is responsible for one-half of one-thousandth of 1 percent” of China’s energy.

— China is not leading a green energy revolution; it is leading a global race for oil, natural gas, coal, and nuclear power — the energy sources that actually fuel China’s growth. A coal-fired power plant a week — I’ll have what she’s having! — a new coal mine every three months — China’s doing it! — a few new nuclear reactors a year (yes, still planned, they merely said they’d review safety plans).

— China does not have renewable energy mandates or cap and trade, both of which make energy more expensive and send manufacturing jobs away.

Now here’s the really difficult part:

— “The cost of Chinese factory labor is a paltry 64 cents an hour…For comparison, hourly factory compensation in the U.S. in 2002 was $21.11, and an average of $14.22 in the 30 foreign countries covered by the existing [U.S. Bureau of Labor Statistics] report.”

The average manufacturing wage in China is 64 cents per hour.

The EPA and green group obstruction of development: Kidding!

Democrats insisting we do what China does: Priceless.

Sixty-four cents an hour is the pay to make things that other countries’ leaders — but not their own — are mandating. The Chinese make solar panels and windmills not because they work (they don’t, in any meaningful sense of the word), but to satisfy Western policymakers’ political vanity.

If you liked the Simpsons’ monorail, you’ll love this.

You won’t love it so much if, say, you’ve ever read Bastiat, pay taxes or simply are concerned about our economic future. Or if you understand that for something to be an “alternative” it has to actually be an alternative.

Wind and solar power, both commercialized at the same time as coal-fired power, are no such thing. The wind doesn’t always blow, the sun doesn’t always shine, and when one or both are happening, they are extremely diffuse energy sources and are redundant. That is, you still have to have the fossil-fuel plant running to cycle up and down as (wait for it!) a “backup.” That’s on net even more polluting than not having windmills or solar panels at all.

The closest thing we have to China, from Reid’s perspective, is California, where they subsidize and mandate the heck out of these things. But being not $0.64-per-hour China, but enormously expensive nanny-state California, they are an uncompetitive basket case.

As John Fund quoted those familiar with the situation in the Wall Street Journal this past weekend, “You can’t build in California, you can’t manage in California and you have to pay a big tax,” and “The red tape is ridiculous…Regulators see developers as wearing a black hat and the environmental laws have run amok.”

These experienced hands were describing why 70 companies have left California this year so far, generally for Texas (20% of them) or other states or countries that have not done to themselves what Reid wants Congress to do to all of us.

It may hurt to hear this but, despite what Harry Reid’s tour guides might have led him to believe, the U.S. is not China. It cannot compete in making expensive, low-performance goods purchased to satisfy political mandates. That’s baked in our economic cake, which is then iced should we (unlike China) mandate the gizmos’ use, which would only further increase the cost of energy, compounding the cost of doing business.

As Lee Lane argues, you do not improve the economy by pouring billions down rat holes and using other means to try and make wind and solar and the stuff that works cost about the same: a lot.

It’s really not complicated. But things look different if you filter out the inconvenient facts. “Green China” is a myth and politicians who can’t, or won’t, deal with that fact put all of our futures in peril.

Chris Horner is a senior fellow at The Competitive Enterprise Institute.