This past weekend, President Trump met Chinese President Xi Jinping at Mar-A-Lago. It was a meeting of figures symbolic of the past and the present.
Trump, clearly, represents the past: he is slashing environmental regulations to make room for the dirty energy industries to increase profits – even though even Robert Murray, the President and CEO of coal giant Murray Energy, has said that the president’s deregulation plan, which he supports, will not bring coal jobs back. Nonetheless, Trump is doubling down on the energy economy of the past, threatening to withdraw from the Paris Climate Agreement, and installing climate denier Scott Pruitt, a mortal foe of the EPA, as the agency’s head. As a figurehead, Trump clearly represents a backward-looking perspective, a longing for the economy of the past that will never, wishful thinking aside, come roaring back. All the deregulation in the world will not undo the market’s shift towards renewable, sustainable energy and the economic opportunity it provides.
Jinping’s China, by contrast, has fully embraced the future, and, barring substantial changes, will rapidly eclipse America in terms of benefiting from a clean energy economy. China’s latest five-year energy budget invests $360 billion in renewable generation alone by 2020. Beijing calculates that this investment will result in an additional 13 million jobs. In 2014, the most recent year for which data is available, the entire US coal industry employed just 76,572 people – less than Arby’s, as the Washington Post recently pointed out.
We are missing the boat with Trump’s masturbatory fantasies about the coal industry. Clean energy will be a key driver of employment and the economy for the countries with the foresight to invest in it and incentivize it. By contrast, Trump’s ironically-titled “America First” budget released Thursday essentially eliminates the following Department of Energy (DOE) clean-tech programs:
- the Advanced Research Projects Agency-Energy, which invests in innovative clean technology
- a program to improve manufacturing for clean cars, and
- the loan guarantee program, which jump-started large-scale U.S. solar deployment, the electric vehicle (EV) revolution, and companies like Tesla.
This should surprise no one. Trump campaigned on the notion that climate change was a hoax, and eliminating clean energy funding. Trump has rationalized this in his budget by asserting that “[t]he private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.”
This is supremely counterfactual. The United States is notorious for inventing whole industries other countries end up dominating because our private sector under-finances advanced development and commercialization unless given regulatory or other incentives to drive investment and research and development. Our greatest and most prosperous era was in the post-WWII years, when a potent combination of robust public investment in R&D and economic development drove industry to take advantage of those publicly-funded gains and monetize them in the private sector. The anti-government rhetoric of every GOP administration from Reagan forward has resulted in decreased public funding for key innovations that could drive private sector growth. This is why the US has steadily lost manufacturing jobs while other countries make so many devices we invented – consumer electronics being a prime example.
By and large, the international community – now absent the US – has doubled down on the goal of ramping up clean energy and decreasing carbon pollution, as required by the Paris climate deal. That requires a tenfold increase in clean energy investments from recent levels. Worldwide investment could reach as much as $90 trillion in the coming decades by some estimates.
China, in particular, has made clear moves that will position it as a leader in the developing clean energy economy – an opportunity the US is willfully foregoing. China is racing ahead in building and deploying a solar and wind power infrastructure. They have also placed enormous bets on batteries and EVs.
The shift towards renewables is irreversible, as two GE execs explained in a recent article, “Unstoppable: Why The Next Decade Belongs To Renewable Energy.” They note that “In 2016, wind and solar beat investment in fossil fuels by 2-to-1.” And they list these facts:
In 2016, Portugal powered the country with renewable energy alone for four consecutive days, clean power supplied Germany’s power demand for a full day, and Denmark could produce enough wind power to meet its domestic electricity demand and have enough to export power to Norway, Germany and Sweden. The U.K. generated more electricity by wind than coal — the first-time wind has outperformed coal for an entire year.
Deregulation of environmental rules won’t stop this. The price drops that have led to this shift in the energy market are linked to the sales increases, so they will continue no matter what the United States does, simply because of the big bets by other countries. Bloomberg estimated in 2016 that the world will invest $3.4 trillion in solar alone by 2040 — eclipsing fossil fuel investment. China has essentially stopped construction of over 100 planned coal plants in favor of overwhelming levels of new investments in renewables.
We are further crippled by the fact that we don’t put a price on CO2 or have a serious gasoline tax like our economic competitors. That’s what makes government investment — as well as state and federal standards — so important. But instead of taking these steps, Trump is planning to gut the renewable renaissance. He is doing his best to eliminate the EPA’s Clean Power Plan. He’s also begun the process of rolling back fuel economy standards needed to keep us competitive in the growing market for clean cars, an area where both China and Europe are moving full speed ahead. Meanwhile, Trump’s allies in the fossil fuel industry are fighting state-level EV incentives — as well as the renewable electricity standards that helped sustain growth in domestic clean tech industries.
China already has over 40 percent of all jobs in renewables globally, while the United States has under 10 percent.
Trump’s backward-looking policies are foolish, short sighted, and will allow China to leave us in the dust in the most important job-creating sector that currently exists. The old guard cannot hold, and America’s own myopia has elevated a leader who cannot fulfill his “America First” promises.