The Hill - Innovated in the US, Made in China
Op-Ed
By Senator John Kerry
America has always been the world's innovator -- it's defined in our DNA. That's why I've been particularly concerned by what I hear as chairman of the Foreign Relations Committee: Our global economic rivals are cheering and our allies are perplexed by an America still relatively sitting on the sidelines in one important area that will define the global economy for years to come -- clean energy.
It's an economic race not unlike the race to the moon in the 1960s. And we're losing.
Kevin Parker, the head of asset management at Deutsche Bank, says we're "asleep at the wheel on this industrial revolution taking place in the energy industry." And he's right. The current energy economy is a $6 trillion market with 4 billion users, and the fastest growing segment of that is green energy -- projected at $2.3 trillion in 2020. We need to harness this incredible opportunity to create jobs and strengthen our economy, but instead right now we're on track to let most of this investment go overseas. Unless we make some big changes, and soon, the United States is at risk of sleeping through an economic opportunity of extraordinary proportions.
Ironically, other countries are raking in profits and creating jobs thanks to our earlier -- but relatively abandoned -- efforts. We can't allow the bumper sticker of the 21st century to become: "Invented in the United States, Made in China."
Consider this: In 1995, the U.S. led worldwide supply of photovoltaic cells and modules, manufacturing roughly 43 percent of the total global market. By 2009, U.S. leadership eroded to less than 6 percent market share. Alarmingly, it's just one example of many.
How did we get here? Simply put, national policies matter, particularly when it comes to financial incentives. A recent study by the National Renewable Energy Laboratory found that the financial incentives countries provide play a far more significant role than factors like labor costs when a company is deciding where to locate. It is no surprise then that China, for example, is now the leading manufacturer of solar panels and wind turbines as they prepare to outspend the United States 3-to-1 on public clean-energy projects over the next several years. Countries including China, Germany, Italy and India are also attractive to financers because they have national policies that create long-term certainty for investors by supporting renewable-energy standards and greenhouse-gas reduction targets.
Because of political uncertainty and inaction in this country, we are standing idly by, just watching our investment dollars capitalize on opportunities in Asia and Western Europe, where governments provide a more attractive climate. The longer the United States puts off the clean-energy revolution, the further behind we will fall to our competitors in the global economy.
Nevertheless, the forecast isn't all bleak -- if we act now. We still have significant advantages over other countries. Our scientists continue to conduct cutting-edge research better than anywhere else in the world; our business communities are agile and excel at identifying consumer demands and new markets; and we have a culture that welcomes new ideas and talent regardless of its origin. The United States is still the world leader in energy-efficiency investment and clean-energy innovation. However, turning these innovations into products that are installed and the jobs that accompany them will not happen until we have strong national policies that provide incentives and certainty to our business community.
Just consider what one arm of the government can do. A recent Pew study finds that the Pentagon's clean-energy investments increased 300 percent between 2006 and 2009 -- driven by experiences in Iraq and Afghanistan, where fuel shipments account for 80 percent of all supply convoys. Not only was the price volatility of oil and the impact of fuel dependence on operational efficiency problematic, but tragically, an estimated 1 in 46 convoys suffered a casualty in fiscal year 2010.
An example of the department's innovative response in investments is the USS Makin Island, commissioned in 2009 with a hybrid electric propulsion system that will save approximately $250 million in fuel costs over the life of the ship. These kinds of improvements overall will save the Pentagon $500 million this year alone.
Now is the time for America to build our new energy future -- to ensure America's competitiveness and leadership in the new global economy, improve public health and protect future generations, increase energy security and create important manufacturing jobs on American soil. With the right national clean-energy policies, jobs that produce clean energy in America are jobs that will stay in America.
Some people say that today's political differences make progress on these issues impossible. But we face a crisis of willpower, not capacity. Millions of Americans know we can do better than we've done these last bitter years -- because our history has proven it time and again. When the Soviets sent the first satellite in history into orbit half a century ago, leaders from both parties rose with a sense of common purpose and resolved that never again would the United States fall behind anyone, anywhere.
Back then -- just as today -- our leaders, Democratic and Republican, had deep disagreements on many issues, but back then, they shared an even deeper commitment to stand together for the strength and success of our country. For them, at that turning point, politics stopped not just at the ocean's edge, but at the edge of the atmosphere. For them, American exceptionalism wasn't just a slogan; they knew that America is exceptional not because we say we are, but because we do exceptional things.
Surely we can agree and act to realize the goal set by President Kennedy in the race to the moon -- when we aspired to be an America "that is not first if, not first but, but first period." Surely we can still unite to do the exceptional things that will keep America exceptional for generations to come.
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