The ministry identified programs supporting renewable power, including wind and solar, in California, New Jersey, Massachusetts, Ohio and California that violate World Trade Organization policies and trade treaties, according to a preliminary finding on the agency’s website today.

The finding comes a week after the U.S. Commerce Department announced tariffs as high as 250 percent on Chinese solar cells and is the latest salvo in a renewable-energy trade dispute, according to Theodore O’Neill, an analyst at Wunderlich Securities Inc. in New York.

“It’s a long, slow escalation of trade and currency wars as we race to the bottom,” O’Neill said today in an interview.
Chinese solar companies have criticized Commerce’s preliminary decision May 18 that they improperly benefit from government subsidies and sell solar cells below cost. At least four U.S. solar manufacturers filed for bankruptcy in the past year.

MarketWatch has more on the background of the dispute:

The U.S. Commerce Department last week announced a preliminary decision to impose 31% tariffs on several of China’s largest solar-panel companies that it had found guilty of dumping.

The Chinese government blasted the U.S. decision as “protectionist” and “unreasonable,” saying it provoked trade friction and would hurt both Chinese and U.S. companies as well as the clean energy sector.

The Ministry of Commerce didn’t say Thursday how it might respond to the U.S. trade violations it had uncovered.

Four Chinese solar companies plan to hold a news conference later Thursday to respond to the U.S. Commerce Department’s decision on tariffs, which followed U.S. antisubsidy tariffs of 3% to 5% on Chinese solar companies in March.

Read more about renewable energy in China, cooperation with the U.S. over environmental issues, and about U.S. trade with China, via CDT.

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The decision comes after the United Steelworkers made a wide range of claims about how China provides unfair support to its clean technology sector. After an investigation into those allegations, the U.S. has decided to only target a modest, narrowly focused program.

U.S. Trade Representative Ron Kirk said the government will continue to look into other claims made by the steelworkers union and could still take action. Any WTO litigation, however, would have to be done outside of the process initiated by the United Steelworkers in September.

The wind power manufacturing grants are being targeted because they appear to be contingent on Chinese producers using parts made domestically, according to the U.S. The size of each grant ranges from $6.7 million to $22.5 million.

“Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules,” Mr. Kirk said in a statement. “These subsidies effectively operate as a barrier to U.S. exports to China.”

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While proponents say the Chinese manufacturers should be welcomed as an engine for creating more green jobs and speeding the adoption of renewable energy in this country, others see a threat to workers and profits in the still-embryonic American wind industry.

“We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing,” Senator Sherrod Brown, an Ohio Democrat, said during a debate this year over federal subsidies for wind energy.

Such sentiments help explain why Goldwind is putting a distinctly American face on its efforts — and is diligently highlighting plans to do more than simply import low-cost equipment from China.

“Goldwind was approaching this as, ‘We’re going to build an organic, North American organization,’ ” said Mr. Rowland, a Texas native and former engineer at the Boston-based wind farm developer First Wind. “So the opportunity to work with them — and with folks I’ve known for a long time — was really attractive.”

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The verification issue, which cuts deeply on matters of national sovereignty and international trust, was a major factor in the torpedoing of last year’s climate negotiations in Copenhagen. But in the intervening year, China has significantly softened its position and the United States has moderated its insistence on the issue.

The reduced friction between the two nations has greatly improved the mood here, and envoys from both countries expressed guarded optimism this week that a deal could be reached by the end of the conference on Friday.

“There’s an agreement to be had — I’m quite sure of that,” Todd Stern, the chief American climate change negotiator said on Monday, although he added, “I’m not sure we’re going to get it.”

Xie Zhenhua, China’s top climate envoy, also signaled a willingness to sign an accord here, as long as it met Chinese objectives on financial aid to developing countries, transfer of low-emissions technology to poor nations and a continuing of discussions under the 1997 Kyoto Protocol. He pointedly did not raise verification or transparency issues as a barrier to the negotiations.

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Marred by an atmosphere of mistrust, negotiations have made limited headway as the world’s two largest emitters of greenhouse gases blamed each other for holding up talks.

The chief American negotiator, Jonathan Pershing, said he was disappointed by the resistance of China and other developing nations on a major issue: allowing monitoring and verification of their efforts to curb greenhouse gas emissions.

“We have made very little progress on the key issue that confronts us,” Mr. Pershing said. “These elements are a part of the deal. The lack of progress on these gives us concern about the prospects for Cancún.”

Mr. Pershing’s Chinese counterpart, Su Wei, hit back, saying developed countries had failed to commit to substantial reductions in carbon emissions while making unfair demands of developing nations. He accused the United States of using the monitoring issue to try to avoid its own responsibilities on cutting emissions and providing financing and technology to poor countries.

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Evergreen Solar, the Massachusetts company, struggled for three years to raise money in the States, but had no trouble doing so in China. Chinese state banks were happy to lend most of the money for the factory on very attractive terms, like a five-year loan with no payments of interest or principal until the end of the loan, said Michael El-Hillow, the company’s chief financial officer.”

The NY Times hints that China’s activist government’s actions are “unfair” WTO violating that hurts the well being of the United States. Is this true? Are we a nation of producers or consumers?

China’s actions will benefit U.S consumers who will import low priced , higher quality products due to China’s activist policies.

These Chinese investments will help households all over the world to adapt to climate change (i.e access to air conditioning) without exacerbating global GHG levels. Why? Their “big push” will make renewable power generation more reliable, and cheaper and better able to compete with power generated by fossil fuel. The Sierra Club should thank China for this.

And from Michael Levi’s blog for the Council on Foreign Relations:

But let’s take a more careful look at what’s going on. There are four basic stages in solar module manufacturing: silicon purification, ingot and wafer manufacturing, cell production, and module assembly. Evergreen Solar, according to its website, derives its competitive advantage through a proprietary low-cost technology for making wafers. Hunan Sunzone Optoelectronics, meanwhile, advertises its focus as being on cell production and module assembly. The two types of firms are not entirely, or even mostly, in competition.

This should not be particularly surprising. In what is quickly become one of my favorite obscure academic papers, Arnaud de la Tour and his colleagues at MINES ParisTech took a careful look (PDF) earlier this year at the structure of the Chinese solar industry. They found that China (circa 2008) was strong in the later stages of the solar value chain (27% of the cell and module market), but that it lagged far behind in the earlier stages (2.5% of the ultrapure silicon market and less than 5% of the ingot and wafer market). Those two later stages accounted for 60% of the cost of a module but only 18% of its profit. That’s because they’re less technologically sophisticated than the earlier stages, which accounted for only 40% of the cost but a whopping 82% of the profit. Those higher-value-added steps, in turn, support higher-wage jobs.

Seen from this vantage, the Sunzone/Evergreen story is decidedly less depressing. U.S. firms are unable to hold on to cell and module manufacturing (“the final manufacturing steps”) but still have an edge in wafers and silicon, where there is far more profit to be made. Indeed by lowering the cost of turning Evergreen Solar’s wafers into finished solar products, companies like Hunan Sunzone Optoelectronics help grow the market for the things that Evergreen Solar makes. Evergreen may have lost 300 cell and module manufacturing jobs to China, but it’s quite possible – indeed even likely – that it’s gaining (or retaining) high-wage jobs elsewhere in its value chain because of the same low-cost Chinese developments.

Indeed if the United States were to insist that all parts of the solar value chain stay in the United States, the result might not be more jobs – it might be less. Unable to reduce the cost of cell and module manufacturing, the cost of solar might stay too high, reducing the overall solar market, and with it jobs in wafer and silicon production too.

(Thanks to Jim Rothstein for providing the latter link.)

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The number of clean energy partnerships between the United States and China reached a new peak when the U.S. Energy Department announced two new consortia aimed at tackling clean vehicles and ‘clean’ coal technology earlier this month.

Along with a substantial funding pool totaling $100 million, split evenly among the two countries, the new consortia have put universities arm-in-arm with car companies, national laboratories, electric utilities and think tanks.

Dennis Assanis, professor of mechanical engineering at the University of Michigan and lead investigator for the clean vehicles consortia said these partnerships were not simply born out of President Obama’s trip to Beijing last November, where he and Chinese president Hu Jintao first announced the endeavor. Instead, the new consortia network many researchers already looking to pool their resources into a coordinated national effort.

“When this was announced, it was simply music to our ears,” said Assanis, who with several colleagues had discussed such a partnership for about three years. “Finally, what we’ve been dreaming and working on kind of quietly to establish,” he said, had come to fruition.

Read more about green tech in China via CDT.

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With just six days’ negotiating time left before a critical meeting in Cancun, Mexico, some diplomats fear that the fragile deal struck in Copenhagen last December could unravel.

Rather than slim down the negotiating text to allow politicians to make choices at Cancun, the US, China and many developing countries all added pages to draft texts in a series of tit-for-tat moves that critics said had sent the talks backwards after a week of meetings.

“Events outside [such as the Russian heatwave and the Pakistan floods] are consistent with what we can expect from climate change,” said Jonathan Pershing, the lead US negotiator at this week’s meeting in Bonn. “But I am very concerned that some countries are walking backwards in the progress made since Copenhagen. If we continue to go down this road, there is no hope of an agreement in Cancun. All parties are stepping back.”

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There is nothing new here. We are merely witnessing the reality of the U.S.-China relationship, which is marked by almost no trust, a weak foundation of real cooperation, and a lack of shared values and commitment to true compromise. China and the United States have never achieved full agreement on how to approach climate change; we have regular disputes over Taiwan arms sales and the Dalai Lama; and we have never had a truly common approach to Iran. The only “new” issue on the table is the Chinese cyberhacking of Google, a number of major American companies and think tanks, and Chinese dissidents…and even that is probably not all that new. We just didn’t know about it.

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China, the world’s largest emitter of greenhouse gases, on Sunday lauded the outcome of the U.N. climate conference, which produced a nonbinding agreement that urges major polluters to make deeper emissions cuts — but does not require it.

Foreign Minister Yang Jiechi said the climate talks that brought together more than 110 world leaders in Copenhagen delivered “significant and positive” results.

The Obama administration on Sunday also defended the agreement as a “great step forward” — despite widespread disappointment among environmentalists, who lament that the pact does not include mandatory targets that would draw sanctions.

Meanwhile, British Prime Minister Brown has blamed both the U.S. and China for the failure to deliver a more substantive agreement, the Telegraph reports:

Mr Brown invested a large amount of time in the process, but yesterday was forced to admit that the results were far from what had been hoped for after years of lobbying. He said the European Union was prepared to go to cut emissions by 30 per cent, but other needed to follow.

He said: “What we need is not just one part of the world going to higher ranges of ambitions, we need the other parts of the world as well,” Mr Brown said.

“If America and China were able to show that they were doing more, and I believe that they could, then all countries – Australia, Brazil, Japan, Korea – all these countries that have got ranges would be prepared to go to their highest level of ambition.”

Read also: “How China Stiffed the World in Copenhagen” from Foreign Policy. China has rejected accusations by British Climate Change Secretary Ed Miliband that it hijacked climate negotiations.

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