Global Cleantech Legislation

Written By Nick Hodge

Posted September 30, 2010

Imagine if, during the Super Bowl post-game press conference, the losing coach blamed the other team’s prowess for his defeat…

He’d say something like, “We would’ve won if the other team wasn’t so good.”

You’d say he’s a whining schmuck.

Enter U.S. lawmakers — 180 of whom sent what I can only guess was a strongly-worded letter to Obama this week complaining about the progress China is making in the clean energy sector.

Here’s a snippet:

Through a variety of predatory trade practices, China’s industrial policy seeks to give its manufacturers an unfair advantage in the green technology revolution and to capture this emerging sector. If left unchecked, these practices will achieve their intended effect, which is to drive American manufacturers from this critical emerging sector.

Of course China is trying to “drive American manufacturers from this critical emerging sector”…

This isn’t a friendly game of Go Fish with your niece; this is a trillion-dollar cutthroat global industry.

Of Tolstoy and excuses…

In Resurrection, Tolstoy describes a court case in which an executive is being tried for having swindled some shareholders. But during the trial, the defense ignores the charge — instead arguing that the manner in which the executive was caught is illegal.

And indeed, the jury and judges take the bait.

It would be like if Madoff got off because the prosecutor mishandled some paperwork — a social injustice of the worst kind.

And it’s exactly what these 180 lawmakers are trying to do: shift the blame, make excuses.

The yuan stuff I get, but it’s not the real reason we’re significantly falling behind China in the energy race.

The real reason is the inaction of these very lawmakers who are now looking for a scapegoat.

Dead horse

Must I run through this again?

If Congress had done a better job crafting legislation that would help the country embrace a clean energy future, we wouldn’t be having this discussion.

But they didn’t, and the Chinese did.

The Chinese have passed a law mandating a certain percentage of their energy comes from renewables. Congress has talked about it, but nothing has been done.

China also requires utilities to pay a higher rate to developers for clean energy. Congress never got around to doing that, either.

And yes, when we passed the stimulus back in 2009, $80 billion was set aside for cleantech projects ranging from energy efficiency to energy storage…

But do you know what China did? It set aside $217 billion for the next five years, and could invest upwards of $600 billion by 2020.

Some reports show the Chinese are spending $12 million an hour toward developing a cleantech economy, working out to about $100 billion per year. That figure isn’t far off.

And as I reported this past weekend:

Last year, $35 billion in private money was invested in Chinese cleantech projects. The United States received under $19 billion.

And it isn’t just Chinese money; dollars are pouring in from U.S.-based funds and individual investors buying Chinese ADRs.

Chinese companies will make 39% of the wind turbines sold this year; U.S. companies will provide 12%.

Chinese companies will make 43% of the solar panels; U.S. firms will make 9%.

So, to the 180 lawmakers who think China has “an unfair advantage in the green technology revolution,” I can only say:

“You’re right. And you’ve given it to them.”

You’ve given it to them with your inaction. You’ve given it to them with your constant yielding to corporate interests. You’ve given it to them with your intense partisanship.

And that’s sad for America.

But it’s not sad for investors…

Global market

While America as a nation may be falling behind, her investors don’t have to.

We can invest in the Chinese solar companies now dominating the market: Renesola (NYSE: SOL), Solarfun (NASDAQ: SOLF), JA Solar (NASDAQ: JASO), and Trina Solar (NYSE: TSL) have each been on a tear.

And that’s expected to continue:

Chinese Solar 1y 9-30-10

Or like Buffett, we can invest in the Chinese companies ushering in the next generation of batteries and hybrid cars. His investment in BYD (PK: BYDDF) has returned seven times his money — and my readers earned almost 400% on this same play.

We can even invest in the American companies smart enough to get a foothold in the Chinese cleantech market. American Superconductor (NASDAQ: AMSC) comes to mind, given its cozy relationship with Sinovel, China’s largest wind turbine producer.

In short, clean energy is a global game with global players.

And if Congress wants to keep on mismanaging the team, we’ll simply place our bets accordingly.

Call it like you see it,

Nick Hodge


P.S. China is also making big strides in the conventional energy game, securing all the oil it needs to support its current economy and coming cleantech transition. One place they’re getting oil from is Mongolia, and this new video tells the exclusive story of the one company that could make billions supplying it.

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