ITIF's Stepp Discusses Threat to U.S. Clean Energy Economy
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Matthew Stepp, senior analyst with the Information, Technology and Innovation Foundation. Matt, it's nice to see you.
Matthew Stepp: Monica, thanks for having me.
Monica Trauzzi: Matt, the Senate energy committee recently took up the issue of competitiveness and collaboration between the U.S. and China on clean energy. Does an overall threat exists to the U.S.'s clean energy economy?
Matthew Stepp: It really does and it's not even just for the U.S. clean economy, it's for the global clean economy as well. There are a lot of countries that are trying to take the easy way out and game the system to quickly gain market share, which is at the peril for the long-term sustainability of the industry.
Monica Trauzzi: What can the United States do that then to sort of shield itself from some of these practices?
Matthew Stepp: What the United States can do and what I think all good innovation countries should do is aggressively prosecute countries that utilize green mercantilism practices. So that very much may include tariffs.
Monica Trauzzi: But are all these practices unfair or are there certain things that other countries are doing just because they're better at the game or they're more competitive and they're just doing a better job than the United States?
Matthew Stepp: There is actually a subset of policies that are much more egregious than others. So, for instance, you have unfair subsidies and export dumping which we've been talking more and more about because of the Department of Commerce ruling. But then there are things like IP theft, forced technology transfer, limiting access to foreign companies to get government procurement contracts that are much more egregious than just subsidizing consumers to purchase clean energy.
Monica Trauzzi: But then what does this all mean for U.S. consumers? For example in the case of the solar panels, you know, if we're placing tariffs on the Chinese imports, then that might have some negative impacts on the U.S. solar industry.
Matthew Stepp: It will in the very short term. It will marginally raise prices, but those prices are already artificially low. So, we can't rely on China or other companies, or other countries to subsidize clean energy forever. We've got to think about what's the goal here? So, if our goal is to drastically reduce carbon dioxide emissions, we need to start thinking about what technologies we need 20 years from now, 30 years from now, and how we're going to develop those technologies. Green mercantilism actually reduces the incentive to produce those technologies and locks us into less cost competitive or less performing technologies that we have today.
Monica Trauzzi: So, you're arguing that countries are innovating less as a result of these subsidies and other practices?
Matthew Stepp: Not only are the green mercantilism countries innovating less because they're focusing on existing technologies and just grabbing quick market share, but because of those countries using those policies they're disincenting other foreign competitors and firms and entrepreneurs to invest