By Allan Topol
The United States is locked in a fierce struggle with China for world economic, political, and military dominance. This competition is also now occurring in the environmental sphere. Which nation will get the new green jobs?
President Obama has a goal: the greening of America, a myriad of solar panels and wind turbines dotting the American landscape, cutting our consumption of fossil fuels. Hybrid vehicles, or better yet plug-in electric cars, will fill our roads, eliminating foreign oil imports that are wrecking our economy. And a critical part of Obama’s vision is that this green revolution will create jobs. American jobs in the suffering heartland.
Unfortunately this goal, like many of Obama’s, is unrealistic.
For starters, large-scale product demand is simply not there. Most American individuals and businesses aren’t in a mood to change anything that costs money. The shift of electric power production from fossil fuels to solar and wind will be miniscule, certainly for the foreseeable future.
The same position stands for vehicles. American manufacturers are still producing gas guzzlers, and fuel savings from mandated mile-per-gallon requirements won’t even offset increases from new cars. With oil at $80 a barrel, the United States spends more than a billion a day on imported oil. Every dollar added to the price of oil per barrel costs Americans $7.7 billion a year, and $4.62 billion goes for imports.
These payments for foreign oil not only damage our economy and balance of payments, but place the American way of life at the mercy of tumultuous Middle Eastern suppliers, endangering our national security. As Sen. Lindsey Graham recently said, "We are more dependent on foreign oil today than after 9/11. That is political malpractice and every member of Congress is responsible."
If we were really serious about kicking the foreign oil habit, we could do that with electric cars and large-scale nuclear power plants to provide the electricity. That construction would create jobs. Lots of jobs. But since Three Mile Island, we’ve strapped our nuclear power industry into a virtual straightjacket. While nations like France aggressively build nuclear power plants, we barely get projects on the drawing board.
Now for the other part of the Obama vision: job creation. Even if we induced widespread demand for solar and wind energy products, that still wouldn’t create American jobs, except a relatively small number in the short run. Sadly, it would create lots of Chinese jobs in plants manufacturing the equipment for export to the United States.
In the last decade, we’ve watched millions of American jobs being lost to China in every segment of our economy, including toys, textile, machinery, chemicals, appliance making and furniture. The reason is simple: a virtually unlimited supply of cheap Chinese labor. In the last decade, more impoverished Chinese left the countryside
and moved to cities to find manufacturing jobs than the whole workforce of the United States. These Chinese workers are being paid approximately one dollar an hour, a small fraction of what American workers are paid. For good measure, the Chinese government has added a major stimulus package to enhance manufacturing. In contrast to the United States, which has near double-digit unemployment, China only has 4 percent unemployment—allowing China to satisfy the demand for exports. American economists estimate that, by 2020, China will surpass the United States in manufacturing output.
But some say these new green manufacturing jobs involve advanced technology that the United States is more equipped to handle. But, with China graduating five times as many engineers as the United States, it seems that may soon change.
China may not yet have surpassed us in technical proficiency, but Chinese engineering cannot be underestimated. The proof is the numerous jobs in computer and electronics manufacturing that have left the United States for China. Most of the world’s major electronics companies now manufacture their cell phones, computers and other IT products in China. In the process, Chinese engineers have absorbed and now enhance technology invented in the West. Thus, it’s not surprising that China has developed highly efficient solar roof panels and is already producing more of them than the United States. The same is true for wind energy.
President Obama has paid lip service to the concept, and there has been relatively minor construction of domestic products; but, again, the Chinese juggernaut is rolling. Wide-scale production and installation of wind turbine units has been occurring for the last decade, aided by massive Chinese government subsidies.
Arguably, at this point, American solar panels and wind turbines are of higher quality than the Chinese products, but based on what’s happened in other high-technology industries, that gap in quality will be swiftly closed or even shifted favorably to the Chinese side. Then the cheap labor factor will kick in. Very quickly, Chinese exports will hit the American market, undercutting our products in price and finding their way to the American countryside. The combination of sophisticated engineering, cheap labor, and massive government subsides is unbeatable.
One staggering irony is that these green products we’ll be using in the United Sates will be manufactured in a country that continues to destroy its own environment. In contrast to the United States, which has rigorous environmental laws, rivers and streams in China are so heavily polluted that aquatic life is dying. An estimated 1.3 million people die every year in China from respiratory illnesses such as lung and heart disease related to air pollution.
Notwithstanding this devastating air pollution, a McKinsey & Co. study projects that the number of vehicles on Chinese roads will more than triple to 120 million in the next 10 years. In response, Beijing is funding a massive program to solve the battery and other technological problems preventing widespread use of electric cars. With such an aggressive program and thousands of qualified engineers, it is likely that Chinese electric cars will begin appearing in American showrooms before long, and more American jobs will be lost.
Any doubt of this theory was resolved at Detroit’s 2009 International Auto Show where the star was BYD Auto, a Chinese car manufacturer. BYD launched the first mass-produced plug-in car. They’ve been sold in China for the last year, priced at approximately $22,000. A BYD spokesman said, "We are confident of exporting our electric cars to the U.S. Market in 2011." Meanwhile, a second Chinese company has released a model that gets 93 miles on a single charge and can be fully recharged in four to six hours.
This issue of who will get the green jobs plays out on the larger canvas of the struggle for world supremacy. The stakes are huge: Will the United States stay on top or yield that position to China as Britain did to the United States 100 years ago?
The time has come for us to recognize the threat being posed to the American way of life by China. Once we pull our heads out of the sand, perhaps we can take the steps to readjust this precarious balance.
Allan Topol is a partner in a large Washington-based international law firm. He is also a national best-selling novelist, using the thriller genre to explore international, geopolitical, and military issues. He is currently at work on a novel about China, tentatively titled The China Gambit.