Europe likes to think of itself as a global green leader, but it doesn’t have much to show for its efforts. Electricity prices are skyrocketing as the costs of subsidizing expensive renewable technologies are passed on to consumers. The continent’s refusal to drill for shale gas has made it a sink for American coal. Now, Bulgaria’s minister of environment, Julian Popov, is convinced that Europe isn’t even succeeding at renewables. He writes for the FT:
Applications for energy industry patents have increased dramatically in the past decade, mostly driven by research and development in the field of renewable energy. A recent paper by MIT and the Santa Fe Institute shows that Japan comfortably leads the race in solar power patents (7,398), followed by the US (5,246) and China (2,063). Europe has 1,951 patents….The first country in the world to fully install smart meters is in Europe – Italy. However, the EU looks set to lose the smart grid competition as well. Bloomberg New Energy Finance says last year the US led smart grid investment ($4.3bn), closely followed by China ($3.2bn), which is likely to become the largest smart grid investor next year. The EU lags far behind with only $1.4bn of investment. This is despite the economy of the EU being roughly twice the size of that of China….The significantly higher levels of investment in smart grids in China and the US will inject new skills and knowledge into their workforces and further erode the competitiveness of EU labour.
Popov’s conclusion is dour: “Europe is losing.” A large part of this “loss” is coming at the hands of China, which is propping up its own green industry with more government money than even the EU. Low wage costs in the developing world also make it difficult for places like Europe or the US to compete on things like solar panel manufacturing. The EU’s response to China’s solar dominance has been to slap duties on Chinese solar imports (in fact, just this morning Brussels unveiled a new round of duties on Chinese solar glass), risking a trade war with one of its biggest trading partners.Europe can’t out-subsidize China, and it’s struggling to out-innovate the US, as these patent numbers suggest. It is crippling its economy and has no green successes to show for it. Europe has managed to reduce its emissions in recent years primarily because its economy has stalled, while America has achieved significant reductions thanks to shale gas ousting much dirtier-burning coal.Developing sustainably requires balancing green ideals against the need for a robust economy. Europe is firmly ensconced in the sour spot between those two ends.[Wind turbine image courtesy of Shutterstock]