Abu Dhabi, UAEMonday 20 August 2018

Economic ambition adds heft to China's carbon footprint

Eco-Money Solar-panel makers in the West fear an unlevel playing field is developing in China, where firms cut corners at the cost of employees and the environment to win lucrative contracts.

China is on course to become a bigger per capita environmental polluter than the United States. This is casting further doubts over the country's already tarnished "green" solar-power equipment industries.

On average, each Chinese person already has a bigger footprint than the citizens of some developed economies, including France and Spain. The Chinese are also expected to overtake their American counterparts by 2017 in terms of the average pollution generated by each individual, according to the Emissions Database for Global Atmospheric Research (EDGAR).

Between 2009 and 2010, EDGAR reports that China's carbon-dioxide emissions grew by 10 per cent, contrasting with a global average of 5.8 per cent. The growth in China's carbon footprint is largely thought to be accounted for by its massive infrastructure projects as it prepares to join the ranks of developed countries.

EDGAR, however, stresses the statistics are averaged across countries and that there are immense differences between one Chinese region and another. But, in those regions of China where there is intensive industry, the problem of pollution is becoming acute. There are now growing fears that China may be cynically riding rough shod over environmental considerations to generate purely economic benefits.

A solar-panel maker in Haining City, to the west of Shanghai, has been the target of violent protests caused by the factory's horrific pollution record. The facility's owner, Jinko Solar Holding, is reported to have admitted that pollutants may have spilt into a nearby river because of "improper storage of waste".

Protesting villagers stormed the factory compound and overturned vehicles after the owners allegedly failed to address previous environmental complaints. The villagers were protesting about mass fish deaths in August, which they attributed to pollution from the solar-panel factory. But Jinko Solar denied this and said any closure of the facility would be temporary.

There is an inherent contradiction in manufacturing solar panels that could cause enough pollution to outweigh the environmental good caused by fossil-fuel-saving solar panels. This is caused by the combination of globalisation and environmentalism.

Emerging economies such as China are willing to offer cheap tenders for the manufacture of all types of technology, including solar-energy equipment. In the kind of consumer society now rapidly evolving in the more developed regions of China, environmental considerations tend to come a distant second to purely financial ones when submitting tenders.

This is happening at a time when manufacturers in developed economies are increasingly regulated. In turn, this is creating what some say is essentially an unfair playing field between manufacturers based in regulated regions such as the US and those in emerging countries like China. The situation is already being perceived as unfair in the light of the collapse of Solyndra, the US-based solar-power giant.

Solyndra was a darling of President Barack Obama's drive to create jobs by funding green industries. The US Energy Department had given a US$535 million (Dh1.96 billion) loan guarantee.

However, following a visit by Mr Obama last year, Solyndra shelved a planned initial public offering of its shares in June. The following November, Solyndra also dropped plans to expand a new factory and shut down some existing production facilities. The company also failed to create a promised 1,000 new jobs.

Despite more than $1.5bn of investment from public and private sources, the company imploded in August, when it was forced to make 1,100 redundancies.

Some industry watchers have blamed foreign competition, particularly from China, for undercutting Solyndra. There have also been allegations that some Chinese companies have been able to offer cheaper tenders for solar-power equipment as a result of cutting corners on safeguarding the welfare of staff and local inhabitants.

Jinko Solar, the shares of which are listed on the New York Stock Exchange, is now being cited by some sources as an example of the way in which US green industries are being hobbled by unfair competition.

But there are also criticisms that government support for green technologies on the scale undertaken by the Obama administration could also make manufacturing facilities such as Solyndra's essentially uncompetitive in the global marketplace.

In Solyndra's case, there have been accusations of extravagance. The Solyndra factory, located in Fremont, California, was compared to the Taj Mahal and was built on a grand scale, covering a 300,000-square-foot site - roughly the equivalent of five US football fields. It is widely reported to have had robots whistling Disney tunes, spa-like showers and luxuriously designed conference rooms. The facility was designed to make far more solar panels than the company had ordered, but is now closed and shuttered.

The contrasting histories of the Jinko Solar factory in China and the Solyndra facility in the US provide a stark lesson for investors in the solar-power industry.

If equipment is to be produced in an environmentally sound fashion, then western manufacturers must learn to compete with competitors from emerging markets while also pushing for broader and more effective international legislation to govern equipment manufacture worldwide.