One key aspect of the “race to net zero” is its urgency: Net zero greenhouse-gas ambitions must be achieved by 2050, or (we are told) horrors will ensue. A second (in all probability) is that its target date bears a rapidly diminishing connection with reality, if it ever had one in the first place. The third is that the never particularly credible promises of net job creation in those countries participating in the race were going to be exposed as a sham.
“Green” jobs will be created, but they will be more than canceled out by jobs lost by the massive dislocation that the so-called green transition will involve. (I touched on this, not for the first time, while discussing electric vehicles the other day.) As the growing wave of protests by farmers in Europe reminds us, this is going to come at an increasing political cost, initially across the Atlantic, but it will not be confined there.
Against that background, this update from the Financial Times on the solar sector makes for interesting reading:
Brussels is considering emergency support measures for Europe’s solar panel manufacturing industry as a flood of cheap Chinese imports threatens domestic production and industry figures warn the continent’s manufacturers are “on the brink”.
Four European factories have shut or announced plans to do so in recent weeks, just as the bloc prepares to announce a plan next month for cutting greenhouse gas emissions that will require it to plough increasing investment into renewable power. Industry representatives blame Chinese competition.
There is huge global overcapacity and European manufacturers cannot sell the products without making huge losses. We need to deal with the Chinese threat,” said Johan Lindahl, secretary-general of industry group the European Solar Manufacturing Council. . . .
The ESMC said manufacturers were “on the brink” and that the bulk of Europe’s production could be shut within three months. “Either [manufacturers] will be forced into bankruptcy or those that . . . have the resources will move to the US,” said Lindahl. Washington is offering hefty subsidies to companies investing in green technology in the US.
USA! USA!
The bad news is that the subsidies being paid to any European manufacturers that do make it to the U.S. will be paid by American taxpayers, and, ultimately, consumers of electricity over here.
Among the measures being argued for are trade barriers directed against Chinese producers, although one industry group, SolarPower Europe, has argued against this, preferring various forms of state support instead. It is only a coincidence that one of its members is Huawei.
The FT:
Another senior industry executive said history showed that trade barriers would create a “lose-lose situation” and leave the bloc’s climate goals “hanging in the balance”.
The EU applied anti-dumping measures on Chinese solar cells, wafers and panels in 2013, only to lift them five years later to increase supply and meet renewable energy goals.
One of the problems often associated with central planning is that its interference with market mechanisms and characteristically swollen ambitions can easily take the planners into a position where they are in pursuit of contradictory goals. So, Brussels wanted a lot of solar power to be installed (advantage mercantilist China), and for this to be achieved very quickly (advantage mercantilist China), and for it to be attractively priced (advantage mercantilist China) while simultaneously developing a competitive European solar sector.
Not easy!
If Brussels believes it as important as it claims to hit net zero by 2050, it will hand this market to the Chinese, who are described by one installer as being the most competitive on quality as well as price. What the EU eventually decides will be an interesting test of its priorities given an additional twist by the political problem that net zero’s toll is beginning to represent for Europe’s establishment parties. Oh yes, there is also the small matter of Europe being dependent on China for its solar equipment. I’m old enough to remember when one of the arguments for decarbonization was that it would reduce the West’s dependence on unreliable and possibly hostile authoritarian powers for its energy. Oh well.
Meanwhile, solar capacity has been growing very rapidly in Europe, but now looks as if it may face a slowdown in the short term. SolarPower Europe has warned that the growth in installed capacity, which has been growing at annual 40 percent over the last three years, will slow down this year to about 11 percent.
Why?
“A lack of grid connection capacity and permitting issues.”
Another characteristic of central planning is that c does not follow b, and that b does not follow a.