China has been rapidly building up its renewable energy production and investing in sustainable energy while the U.S. continues to stall and take small incremental steps. Failing to assess the stakes of the global sustainable energy race could be a costly missed opportunity for the U.S. economy.

Residents walk pass a group of solar power panels in Shenyang (Source: AFP & Google News)

It is easy to be impressed by the pace and robustness with which the Chinese are developing clean energy technologies. Given its economic ascent, it should be no surprise that the nation is outpacing expectations in its efforts to increase energy efficiency, boost the production of renewable energy, and advance other 21st century opportunities like smarter electricity grids, electric cars, and high speed rail. They have the largest and fastest growing market for these goods, and they have the active political and economic support of the government in securing the resources to advance these industries. It is also increasingly apparent that it is in China’s interest for the U.S. to continue lagging behind.

In his recent State of the Union address, President Obama alluded to this:

Nations like China “aren’t playing for second place,” Obama said.  “They’re putting more emphasis on math and science.  They’re rebuilding their infrastructure.  They’re making serious investments in clean energy because they want those jobs.”

The President is right to draw attention to this point. While America continues to dawdle, China is racing ahead. They do want those jobs; in fact, they want to dominate all of the industries that support them. Why wouldn’t they? Clean and sustainable energy offers great promise for economic growth and development, and China wants the world to buy their wind turbines, solar panels, and electric cars.

The U.S. has been caught largely flat footed in even acknowledging that there is a global sustainable energy race, much less taking notice that it is falling behind. But while U.S. politicians and pundits debate and dilute energy action, and deny the legitimacy of the overwhelming scientific evidence behind global warming and dangerous climate change, the Chinese have been steadily out maneuvering U.S. interests.

At last December’s climate negotiations in Copenhagen, China held firm to its position that it would not commit to strong and specific targets for GHG reductions, and it actively avoided efforts to increase the transparency and verification of the carbon accounting that enables any meaningful international agreement to carry legitimacy. It was no secret heading into COP-15 that China’s participation in an international climate change treaty was a key condition for domestic climate legislation.

An international climate agreement aside, China’s domestic priorities reflect a very strong move toward sustainable energy production. China’s recent announcement of the formation of a National Energy Commission, chaired by the Premier Wen Jiaboa, is the latest example of the support such efforts are receiving.

China is certainly aware and concerned about the potential instability that would accompany disastrous climate change impacts, but it is doubtful the Chinese are as eager for the U.S. to get its act together on energy and climate. The status-quo diminishes the prospect of U.S. firms’ competing with sustainable energy industries in China. Their behavior at Copenhagen was likely influenced at some level by this understanding.

The growth in China's sustainable energy industries has been accompanied by increasing control of rare earth metals.

It may be difficult to understand the inner workings of the Chinese Communist Party, but it is quite clear that they are moving as fast as they can to enable China’s dominance in the sustainable energy race. And there are some troublesome indications about how the game will be played. China’s efforts to secure rare earth metals, is one very important example.

As Grist points out:

“China is responsible for 97 percent of the world’s production of rare earth elements or metals, vital for many cleantech products from wind turbines to hybrid-car batteries, fiber optics to low-energy light bulbs. But over the last seven years, it has reduced the quantity of them available for export by 40 percent, and before long may be using all of its production to feed domestic demand.”

China’s control of these 17 elements is something to take note of. As is their approach to securing access to natural resources in Africa, Southeast Asia and Latin America. Recent disagreements between the two global economic superpowers should serve as an important reminder that Chinese and American political interests are often at odds. Not recognizing those differences and divergent interests is a costly mistake.