United States energy secretary Steven Chu recently gave an interview with an editorial team from the Financial Times (registration required). I’ve clipped a bit more of the interview below, but the key point is made early on when Secretary Chu says: “I think what China has done in the last few years is also a little bit of a wake-up call.”
In that statement, he is recognizing the respect that is being given China in many circles in the US regarding its energy policies. Yes, on the one hand we are very critical of the pollution that has run rampant in China, and we also are fearful of losing leadership in green/clean energy, but in-between those headlines is respect from opinion leaders in the US that China is proactively addressing its energy issues through clear policies and ample investment.
And in this case, I don’t think it is colored by a complaint that an autocratic government can act quickly and decisively. I think it is more the recognition that special interests in the US sometimes keep us from making appropriate progress. And just like the crisis of foreign energy dependence is a wake-up call for China, so was it for us during the OPEC crisis of the mid-1970s. We just don’t have that crisis in the US right now.
The FT’s Lionel Barber, Edward Luce and Anna Fifield sat down with Steven Chu, the Nobel prize-winning physicist who became President Barack Obama’s energy secretary just over a year ago, in his office on February 16. This is an edited transcript of the interview.
FT: What are the prospects, post-Copenhagen, for an energy bill. What do you hope to have in as opposed to out? Is cap and trade now dead?
SC: The president even today, with the announcement of the nuclear loans was saying that we still would like very much a comprehensive energy bill which includes a cap on carbon and a trading scheme. I think it’s very important for a number of reasons to the United States. This is a situation where we feel that our national competitiveness is at stake. We can be a leader in developing a lot of the technologies around better efficiency and greener sources of energy or we can be a follower and buy these things. A large part of determining whether we’re a leader or a follower depends on our own internal national policies. If we have energy and climate legislation that tries to foster and lean towards an efficient energy economy and a greener energy economy, that would cause the investments in the United States that could lead to these technological innovations. The president and I feel very strongly that we need this consistent policy. It’s something which also has a demand for meaningful jobs in rebuilding our infrastructure so we retrofit or build new things that are very energy efficient. That’s a genuine demand for jobs, on the efficiency side but also as we retire old inefficient power plants and bring on newer and much more efficient power plants or anything in industry, that both positions us better competitively in the future and it creates a genuine need for jobs. So we see this as part of a necessary wealth creation and prosperity in the United States.
I personally think that this is a bipartisan, non-partisan issue. I think there are people on both sides of the aisle who recognize these things. I think what China has done in the last few years is also a little bit of a wake-up call. The fact that they’re now spending upscale $100bn a year on diversifying their energy, pushing energy efficiency, developing alternative forms of energy other than coal, closing their least efficient coal plants. There are 21 nuclear reactors being built in China today. They’re going to be the biggest installers of wind and solar domestically. They also see this as an opportunity. As you develop internal demand you nurture the industries that can also sell abroad. Their leadership recognises that if we continue on the course we’re on, it going to be devastating to China and the rest of the world. They also recognise that this is something which they missed the first industrial revolution, they missed in large part the computer and biotech revolutions. They don’t want to miss this one. That is again something that I think the United States and other countries should sit up and take notice of.