China DA

Uniqueness China leads in green energysees it as a strategic asset

Hart, Center for American Progress Chinese Energy and Climate Policy Director, 2011
*Melanie, 8/24/11, Center for American Progress, China Eyes Competitive Edge in Renewable Energy,
http://www.americanprogress.org/issues/china/news/2011/08/24/10128/china-eyes-competitive-edge-
in-renewable-energy/, 7/6/14, IC]
Instead of trying to beat the United States at its own game they are looking forward to the next round
and shifting focus to direct their technology efforts toward the critical emerging market sectors where
the United States is not yet dominantthe seven key strategic emerging industries mentioned above.
Among the seven, green energy is a recurring theme, not only because the Chinese are facing some
major energy bottlenecks at home but also because thats where the United States is really lagging
behind. Chinese leaders see green energy as a critical strategic opportunity. According to Chinese Vice
Premier Li Keqiang, it is a major focus in Chinas 2011-2015 development plan (the 12th five-year plan)
because:[2] Green economy, low carbon technology, etc. are emerging, and the global competition to
seize the high ground in the future development of these sectors is getting more and more fierce every
day. In some of these sectors, the gap between the emerging economies and the developed nations is
relatively small. In that environment, all we need to do is to take advantage of these [market] trends; if
we respond appropriately we can seize this opportunity, gain the upper hand, and push forward a new
breakthrough in development. Otherwise, if we miss out on our opportunity, it will be harder to
overtake [the developed countries], and we may lose the initiative and even fall behind. The central
governments latest economic development policies all echo this assessment. Recent State Council
legislation calls for an economywide focus on green energy and other strategic emerging industries and
states that the relatively narrow gap in these sectors gives China a historic opportunity to finally take
the top spot as the next global technology leader.[3] Chinas green push is already reshaping global
energy markets. China surpassed the United States as the top country in the Ernst and Young indices for
renewable energy investment attractiveness in August 2010a position the United States had held
since 2006. The Chinese brought in $48.9 billion in renewable energy investments in 2010, almost
double the U.S. total. China also leads in installed renewable energy capacity (including wind, solar,
small-hydro, biomass, waste-to-energy, geothermal, and marine) with 103 gigawatts in 2010again,
almost double the U.S. total.
Link Its zero-sum the competition is direct over manufacturing and jobs
SEMI 12 [Semiconductor Equipment and Materials International, global industry association serving the
nano and microelectronics manufacturing supply chains, Manufacturing Solar Photovoltaic Products in
the United States, http://www.pvgroup.org/sites/pvgroup.org/files/docs/SEMI-
PVGrp_WhPpr_MnfctrngSlrPV.pdf]
Executive Summary The objective of this White Paper is to articulate the necessity for U.S. economic development programs designed to retain,
attract and increase manufacturing output and employment involved in the rapidly growing photovoltaic (PV) solar industry. Along with most
informed economists, analysts and researchers in energy policy, the SEMI PV Group believes that solar PV is at the beginning of a long-term
growth cycle and will be a major contributor to energy independence and break from our reliance on fossil fuels in the United States. Todays
approxi- mately $80 billion dollar global solar industry has the potential to grow to a trillion dollars in revenues and create as many as 10 million
jobs worldwide in the coming years. How many of these jobs will reside in the United States will be dependent on responsible, sustained public
policies and government programs that support manufacturing and technology development. In addition to policies designed to stimulate and
support the growth of PV power demand and use, forward-thinking policies are also necessary to assure the U.S. economy derives long-term
benefits from job creation, increased adoption and other economic benefits of manufacturing solar products on U.S. soil. The PV industry is a
major job creation engine in the U.S. that accounted for over 100,000 jobs in 2011.1 However, only 24% of these jobs are in manufacturing as a
majority of PV cells and modules are made overseas, including many of those manufactured overseas by U.S. companies. The U.S. PV
manufacturing industry also includes a long supply chain of American equipment and materials suppliers, electrical and installation
components, and balance of system products. A GTM Research report2 (2010 data) estimated that overall the U.S. solar supply chain
contributed a positive $2 billion to the nations trade balance. However, in February 2012, a reversal in trade balance was reported which took
the $2 billion surplus in solar products in 2010 to an over $1.5 billion deficit in 2011.3 The deficit in cell and module
manufacturing will over time lead to migration of some key material manufacturing plants and R&D
centers to overseas locations, nearer to their direct cus- tomers. It is a rare American industry that has a
trade surplus with China, as was the case for the solar industry in 2010 when estimated surpluses
between $247540 million. Some theories on globalization suggest that the United States could benefit
from the growth of the solar energy industry through advanced technology and science while letting
manufacturing investments and jobs migrate to low-cost labor countries in China and other Asian
countries. SEMI PV Group believes that balancing PV energy supply and demand within each region will provide greater economic ben- efits
and reduce the carbon emissions and dollars required to ship PV in the United StateS products made in one area of the world for deployment in
another. In addition, a recent NREL study,4 showed that shipping costs offset Chinas core cost advantage for c-Si module from 1% to -5% and
from 10% to -3% for CIGS. While PV creates significant job creation in the installation of solar modules (over 50% of total solar jobs are in
installa- tion and sales), long-term job creation in manufacturing will create greater economic stability through a greater multiplier effect that
will generate significant additional employment in adjacent industries. Reports from the National Association of Manufacturing (NAM) indicate
that each dollars worth of manufactured goods creates another $1.43 of activity in other sectors, twice the $.71 multiplier for services. And a
chart from U.S. Department of Commerce, Bureau of Economic Analysis provides similar findings. While the U.S. leads the world in venture
capital funding and patent activity for solar technologies, many of these early-stage firms face financing, policy inconsistencies, and other
barriers in attempting to scale volume production. It is important to identify and support ways to retain a sustainable regional manufacturing
supply chain to serve the fast-growing regional market for solar power. This White Paper will conclude with recommendations on key federal
public policy issues that have emerged with the globalization of the solar energy supply chain. U.S. state and federal public policies that have
fueled the demand for PV solar power have not kept pace with the policy requirements necessary to sustain and grow the supply of PV
products and services. The gap between U.S. PV supply and demand needs to be addressed with public policies that enable U.S. manufacturers
of solar energy and other renewable energy products to compete more effectively in both U.S. and global markets. In support of a balanced
demand and supply relationship in the solar PV industry, the SEMI PV Group recommends the following policy positions for federal and state
policy makers: Large, long-term, stable, market-side support policies, including: a national Renewable Clean Energy Standard (RES), state
Renewable Portfolio Standards, buyer incen- tive programs, sales and property tax credits, and so on. Maintain the Investment Tax Credit
(ITC) through 2016 Extend the Section 1603 Treasury Grant Program that has provided a grant in lieu of the advanced energy investment tax
credit (ITC). Increase Department of Energy funding for both R&D and manufacturing infrastructure development of the U.S. solar industry
Establish the R&D tax credit on a long-term basis to assure solar manufacturers greater consistency in tax and investment planning Revive the
Advanced Energy Manufacturing Tax Credit (MTC), and creation of a federal Green Bank to supplement PV and other green energy projects,
particularly for manufacturing. Work with foreign counterparts and the WTO to develop a strong, effective and enforceable rules-based
international trading system that promotes free and open trade. II. Solar Energy: A Trillion Dollar Industry Prices for gasoline and home heating
oil will continue to rise. The Middle East will continue to be a region of political, social and economic instability. China, India and other nations
are rapidly increasing their demand for fossil fuels. Power plants that burn coal, oil and natural gas, as well as vehicles everywhere, continue to
pour millions of tons of pollutants and greenhouse gases into the atmosphere annually, threatening the planet. Scientists, engineers, investors,
economists and policy- makers around the world are responding to these challenges by improving the performance and affordability of solar PV
technology to meet an increasing share of new energy demands around the world. Solar PV is in the beginning stages of a 50-year growth cycle
that may reach over 1 trillion dollars in revenues by 2030 globally. Today the solar PV industry contributes less than 0.5% of the worlds
electricity, but is already an $80 billion industry. The International Energy Agency (IEA) estimates that with the right support from government
policies that PV power will grow its contribution to worlds electricity capacity over 5X by 2020, reaching nearly 5% by 2030 and nearly 11% by
2050.5 We are entering the rapid growth phase of the PV industry that will create financial opportunity, economic growth and jobs. The
conservative IEA solar energy estimates are one of many predictions that see a positive, long term growth for the solar PV industry. The
European Photovoltaic Industry Association (EPIA) estimated that compound annual growth of the PV industry will exceed 12%.6 The U.S.
Department of Energy says that the PV industry can grow 10-fold and provide up to 14% of the nations electricity by 2030 and 18% by 2050.7
Industry researchers Navigant Consulting, IMS Research, Solarbuzz, Gartner, Greentech Media, EuPD all see strong, double-digit growth
throughout the decade. Financial analysts such as Bank of America, Bank Sarazin, Bloomberg New Energy Finance, and Deutsche Bank are all
bullish on the long term growth of the solar power industry. Bank of America (Merrill Lynch) sees Clean Technology and PV to be the sixth
revolution, on par with the Industrial and Agricultural Revolutions.8 The growth of the industry over the past decade was driven by strong
regional governmental policies and incentives, reflecting policymakers recognition of the long-term growth potential for clean solar energy,
and the substantial contri- bution that solar energy can play in addressing global envi- ronmental challenges. Virtually every developed country
in Europe, Asia and North America has public policies that en- courage the use of renewable energies such as solar and wind. The goals of these
policies are primarily to reduce the depen- dence on fossil fuels, reduce greenhouse gas emissions and to improve energy security. The primary
policy mechanism in the world to promote solar energy has been feed-in-tariffs where energy producers are rewarded at a prescribed level for
renewable electricity fed into the grid. Today, approximately 40 countries employ some form of feed-in-tariff to offset the higher price of solar
energy and encourage PV deployments. In the United States, tax credits and grants from federal, state and or municipal governments are used
to support the purchase of solar power by homeowners, businesses, and utili- ties. Government mandates and targets for renewable energy
production, including solar power, have also been used in the United States. Approximately 30 states have implemented Renewable Portfolio
Standards (RPS) mandating the use of a specified percentage of electricity generated by renewable sources. Several of those states include a
specific portion to be supplied by solar power, supported by performance-based in- centives and procurement programs that reimburse owners
for the generation and environmental value of solar production. The result of these various government incentives and poli- cies has been to
jump-start and accelerate the emergence of a truly global PV industry; this in turn has led to technology innovation, capacity expansion and
steadily reduced costs to produce and install solar energy systems. The price of solar power today is approximately 65% less than 2005. Last
year alone, the price of solar declined by 30%.9 As the solar industry continues to realize the benefits of economies of scale production,
learning curve efficiencies, and increased PV device efficiency, the price of solar power will continue to decline, reducing the need for
government subsidies and achieving the critical inflection point for solar power growth called grid parity. Grid parity for solar power is the point
at which the level- ized cost of electricity (LCOE) produced or delivered by solar panels is equal to or cheaper than electricity produced by
traditional fossil fuels. Once grid parity is reached, demand for photovoltaic products will dramatically expand without price subsidies. Grid
parity will be achieved first in those areas that have a combination of abundant sunshine and comparatively high grid electricity prices, places
like California and Texas. As solar PV power costs continue to decline, solar power will reach grid parity based on a levelized cost of energy
(LCOE) beginning now and throughout the decade, depending on local electricity rates and received sunlight. Hawaii is already there; large
portions of Southern California are at wholesale grid parity and residential and commercial solar markets and at retail grid parity in much of
Northern California. Grid parity is not that far away, said Navigant managing director Lisa Frantzis. Its only about two rate cases away. Its
not 20 years out. Its right around the corner, and a lot of these utilities are becoming more and more aware of that.11 Virtually every expert
agrees: solar power will make a sig- nificant, long-term contribution to the United States energy future. The current era of subsidies and state
RPS man- datesessential to accelerating the industry and establishing the financing and installation infrastructurewill ultimately transition
to unsubsidized market-based economics, where solar is directly competitive with conventional grid electricity based on its inherent energy
value alone. The solar energy industry will continue to grow and become a major economic force in the world economy, potentially larger than
computers, semiconductors and pharmaceuticals. Over the past decade, policymakers have mostly been focused on encouraging and
supporting the demand and development of solar power. In the coming decades, policymakers in the U.S. need to focus on leveraging the
economic developments of solar power, particularly the industrys long-term need to expand manufacturing capacity and manufacturing
employ- ment. The solar industry is a global industry serving custom- ers around the world. Companies that manufacture products for the solar
PV industry have many options on where to locate manufacturing facilities. With the large volume of solar demand expected in the United
States, there are strong economic advantages to locating manufacturing resources next to U.S.-based customers and markets. These economic
advantages can be leveraged to increase economic growth and employment, but only if we develop effective public policies that understand
the global competitive environment for plant and facility locations. from such firms as Sunpower, SolarWorld and many Chinese suppliers
utilizes many of the same materials and processes as semiconductor technology to optimize electrical perfor- mance. Like other semiconductor
devices, the PV crystalline cell manufacturing process begins with raw material silicon that is processed into ingots with specific dopant (type
and resistivity) characteristics and then cut into wafers which are then processed in a fab to obtain the semiconducting properties desired.
The majority of PV power today is supplied by crystalline silicon PV. Thin film PV technology from First Solar, Sharp Solar, Oerlikon Solar and
Stion use similar manufacturing methods as flat panel displays used in todays computer monitors, mobile phone displays and flat screen TVs.
Thin film solar Cost reduction in PV modules from 1976 to 2010. Like other electronics industries, the cost to produce PV rapidly decline as
volumes increase. As volumes double, PV module has consistently declined by about 20% with variations due to materials shortages, market
dynamics and other short term factors.10 III. The Economic Development Opportunity The solar industry is comprised of a diverse set of
technolo- gies, products, manufacturing equipment, materials, sub- systems and ancillary components that collectively constitute a complex
and valuable supply chain. According to a Green- tech Media report, there are more than 5,000 companies in the U.S. solar value chain with at
least 39 active facilities manufacturing PV components (polysilicon, wafers, cells, modules, inverters) spread across 17 states.12 While some
solar manufacturing operation have closed due to obsolete equipment, uncompetitive technology and other reasons, according to SEIA, in 2010
and 2011, 27 new U.S. solar manufacturing facilities have begun or will begin operations across America, including in Arizona, Ohio, Michigan,
Mississippi, Pennsylvania and Tennessee. Solar PV technology is generally comprised of two types: crystalline silicon and thin film PV. Crystalline
silicon PV panels are constructed by depositing extremely thin layers of photosensitive material on to a low-cost backing such as glass, stainless
steel or plastic. Once the material is deposited it is typically patterned using laser scribing into thin electri- cally-interconnected strips (glass
panels) or in the case of roll- to-roll sheets, mechanically cut into module-sized sections. U.S. companies are represented in every step of the
value chain in both technologies: Manufacturing Equipment: According to NPD Solarbuzz, in 2011 approximately $13.1 billion globally was
spent on equipment to manufacture and process polysilicon, ingots, and wafers, cell and modules in the solar industry. Many of the leading
semiconductor companies that provide manufacturing equipment to the PV industry also serve the semiconductor and flat panel display
industries. Companies such as GT Advanced Technologies, Applied Materials, KLA-Tencor, Amtech, and others are key global suppliers to the
crystalline silicon PV technology. In thin film, some of the equipment is built by the module manufacturers is customized, but utilizes critical
subsystems and components manufactured in the U.S. Materials: Polysilicon is the largest cost contributor to crystalline silicon PV solar cells,
representing approximately 25% of the total cost of a solar module. In the U.S., three leading polysilicon manufacturers have manufacturing
plants: MEMC, Hemlock Semiconductor and REC. In addition, both Wacker Chemie and Hemlock Semicon- ductor have announced billion dollar
projects to expand U.S.-based production. Other materials used in the manu- facturing process are glass, wet chemicals, gases, dopants, inks
and pastes, encapsulation/backsheets and slurries. Solar Cells and Modules: According to Photon International, the U.S. produces 4.8% of the
worlds PV solar cells.13 Chinas contribution to global cell production has risen rapidly to account for
approximately 48% of the worlds capacity. Rapid price declines of PV modules initiated plant closure
announcements at several U.S.-based PV manufacturing facilities: BP Solars wafer-cell plant in Maryland, Spectrawatts
cell plant in New York, Solyndras thin film plant in Fremont, California, Energy Conversion Devices plant in Auburn Hill, Michigan and Evergreen
Solars wafer-cell-module plant in Massachusetts. New U.S. PV manufacturing plants announced in 2011 include Stions CIGS (Copper Indium
Gallium Selenide) facility in Mississippi, a 250MW manufacturing site for First Solar in Arizona, Flextronics module assembly plant in California
(SunPower partner), and a 400 MW plant by General Electric for producing cadmium-telluride thin film panels in Colorado. Several other
companies have announced plants for new PV manufacturing plants, financed in part by DOE Loan Guarantees, including SoloPower (Oregon).
Abound Solar (Colorado/Indiana) has already shut down one of its production lines and plans to upgrade their equipment to produce a more
efficient solar panel design. These manufacturing plants represent a cross- section of all technologies. Many of these new facilities are start-ups
(thin-film) and are not yet at full mass production. Balance of Systems: Manufactured products used in con- junction with solar power include
inverters, junction boxes and connectors, transformers, racking, trackers, sensors and controls, anchors and ballasts, and optical components.
CPV (Concentrated Photovoltaics): CPV uses highest efficiency solar cells originally developed for space applica- tions by leading space
companies like Boeing/Spectralab, who manufactures these cells in Southern California. These cells are incorporated into large modules using
concentrat- ing technologies. CPV requires high direct normal irradia- tion (DNI) in order to be competitive. The U.S. Southwest is one of the
best DNI areas in the world. As CPV mod- ules are bulky and heavy, assembly plants are located close to end-user installation areas. A new
assembly plant was opened by U.S. company Amonix in Las Vegas in 2011, however, in January 2012, it laid off 2/3 of the workforce as it retools
production. Soitec Solar of France/Germany is currently setting up a 200MW assembly plant in San Diego. Soitec and Amonix are the two CPV
players with the larg- est publicly declared project pipelines. In a widely reported meeting between President Barack Obama and Silicon Valley
high tech executives (New York Times, January 21, 2012), President Obama asked the late Steve Jobs, what would it take to make iPhones in
the United States? Mr. Jobss, in reference to highly developed electronics assembly supply chain in China, replied, Those jobs arent coming
back. Unlike the electronics assembly supply chain, the U.S. solar supply chain is healthy and among the leaders in the world. But without
effective policies, the U.S. risks losing not only solar cells and module manufacturing, but the entire supply chain of high tech and cleantech
equip- ment, components, software and materials suppliers.The necessary manufacturing infrastructure of suppliers and service firms is in
place; our policy choice is whether to support this source of jobs and competitive advantage or watch it gravitate to offshore locations. IV. The
Importance of Solar Products Manufacturing to U.S. Economic Development Throughout U.S. history, state and federal governments have
embraced the responsibility to support economic develop- ment by promoting innovation and competitiveness, and preparing American
regions for growth and success in the worldwide economy. Economic development policies typi- cally have job creation and retention as a
primary goal and often involve specific efforts in business finance (grants, loans and tax incentives), infrastructure development, technol- ogy
transfer, workforce development, business retention and expansion. Policies that support solar products manufacturing in the United States
would be consistent with these long-held goals of economic development: job creation and retention. Many researchers have claimed that
solar energy is the most effective and efficient job creator among all traditional and renewable energy sources. As much as 33 jobs are sup-
ported per megawatt (MW) of solar power, in comparison to less than 10 jobs supported for every MW in coal, natural, nuclear and wind
power generation. A study by M. Wei et al. also confirms solar PV creates more jobs per unit of electricity output than other alternatives.14 By
2030, an estimated 10 million full-time jobs will be created thanks to the de- velopment of solar energy around the world.15 Where these jobs
locate will be subject to a variety of economic, social, geographic, and historical factorsworking in concert with government-supported
economic development policies. Nearly all developed countries in the world have policies designed to encourage the development of
renewable and solar energy for the express goal of job creation and retention. In the U.S., The Solar Foundation provides the most thor- ough
overview of the U.S. solar employment outlook. As of August 2011, the National Solar Jobs Census 2011 identified more than 17,198 solar
employment sites and 100,237 solar jobs in all 50 states. The solar workforce grew 6.8% from 2010 to 2011 nearly 10 times the overall
national employ- ment growth rateand is expected to grow an amazing 24% in 2012. Of the total jobs in 2011, 24% are involved in
manufacturing.16 While the majority of jobs related to the solar industry have been in the sales and installation of solar products, the full value
of manufacturing employment should not be underestimated. Employment multipliers measure how job creation or destruction in a particular
industry translates into wider employment changes throughout the economy. Several empirical studies have shown that closing of an auto
factory, for example, that employs 1,000 people will have a greater impact on the overall economy than the closing of a retail shopping mall
that employs 1,000 people. The direct impacts (1,000 jobs lost) are the same; but employment multipliers indicate that manufacturing jobs
due to their relation with other suppliers and service firmshave a greater positive impact on the surrounding economy. The Economic Policy
Institute estimates that every 100 jobs in manufacturing support 2.91 jobs elsewhere in the economy, compared to 1.54 jobs in business
services.17 Another study by the National Association of Manufacturing (NAM) indicates that each dollars worth of manufactured goods
creates another $1.43 of activity in other sectors, twice the $.71 multiplier for services.18 The U.S. Bureau of Economic Analysis (USBOA)
estimates that about one in six U.S. private sector jobs depend on the U.S. manufacturing base. USBOA estimates that manufactur- ing
supported an estimated 18.6 million jobs in the United States in 2009: 11.8 million jobs directly within manufac- turing and more than 6.8
million jobs in sectors outside of manufacturing such as professional services, transportation, retail and agriculture.19 The economic benefits of
manufac- turing solar power products are significant and profound. V. The Link Between U.S. Innovation and U.S. Manufacturing A major
competitive strength of the United States is the col- lective research and development ecosystem that has pro- pelled American high
technology companies to world leader- ship positions. In the key sectors of information technology, life sciences, electronics, aerospace and
defense, and energy, a strong synergy between private and public R&D funding has been widely recognized as an essential component of U.S.
global competitiveness. Over one-third of global R&D funds are spent in the U.S.; 25% of the global R&D spending on energy is in the U.S.; over
20% of the worlds R&D investment in chemicals and advanced materials is in America. Basic research funded by the National Science
Foundation, the National Institute for Science and Technology, the National Institutes of Health, the Department of Defense, and the
Department of Commerce enjoy bipartisan support to advance the national health, prosperity and welfare, to help secure the national defense.
It is essential that effective public policy work to link this global leadership in R&D and innovation with employment. The best way to ensure
that solar PV innovations developed in government-supported labs benefit the most Americans is to ensure a high percentage of these
innovations are manu- factured in the United States. As many new technologies reach volume production levels, they often move to non- U.S.
manufacturing locations. Effective public policy and the State and Federal level must seek to retain positive manufacturing and employment
outcomes as these firms scale to volume production. As in other sectors, the United States currently leads the world in solar PV innovation, but
has not leveraged this posi- tion into manufacturing job creation. More venture capital in solar energy, more patents and the worlds leading
academic R&D efforts are all occurring in the United States than in any other country. According to the Cleantech Group, a San Francisco-based
global research organization, venture fund investments in clean technologies reached $8.99 billion in 2011, a 13% increase over 2010. North
America led the world in venture investments with $6.8 billion, 76% of the world total, up 31% over 2010. Financial Investment Cleantech
mergers and acquisitions reached record highs in 2011 with 391 deals and a dollar volume of $41.2 billion, a robust 153% growth over 2010.
Solar was the leading sector by amount invested ($1.81 billion). According to Mercom Capital, over 90% of the VC funding activity in solar was
in the U.S. In North America, California led the way with $3.69 billion in investments (54% share), followed by Massachusetts ($542 million, 8%)
and Colorado (358 million, 5%). The granting of patents by the United States Patent and Trademark Office (PTO) is another strong indicator of
U.S. leadership in solar innovation. Patent awards measure the effectiveness of research and development investments, because not only does
it account for the efforts of inventors to develop new and non-obvious innovations, but also the legal and financial requirements needed to
shepherd a patent application through the PTO. Through the first three quarters of 2011, nearly 400 U.S. patents were granted in solar energy,
more than all of 2010 and more than double the patents granted in all of 2009. California ranks first in the U.S. in green-tech patents by a wide
margin. It had 450 between 2007 and 2009, outpacing New York, which had 300. Leadership in patents and venture capital funding, however,
has not led to significant manufacturing job creation. Experts from NREL, Sandia National Laboratories and others have commented on the gaps
in U.S. public policy that fails to leverage the U.S.s leading role in high technology develop- ment to high volume manufacturing. Start-up
companies and new corporate initiatives born in the USA through venture funding, academia connections and national science funding enter a
valley of death at the commercialization and market entry stage that yield major economic benefits of employment and economic scale. The
challenge for U.S. policy makers is how to retain the benefits of this U.S. innovation to U.S. workers and taxpay- ers. Throughout the 1980s, the
United States was the worlds leading producer of high-technology products, including solar products, responsible for more than one-third of
total world production from 1980 to 1987 and for about 30% from 1988 to 1995. In 1998, the United States high-technology industry accounted
for 36% of world high-technology production, a level last reached in the 1980s.20 The U.S. share of global high technology exports declined
from 21% in 1995 to 14% in 2008. During this time, Chinas share of global high tech goods exports more than
tripled, from 6% in 1995 to 20% in 2008. According to the National Science Foundation, The U.S. trade balance of high tech products shifted
from surplus to deficit, starting in the late 1990s. In 2000, the deficit was $32 billion in current dollars; in 2008, increasing to $80 billion in
2008.21 Solar now has over a $1.5 billion trade deficit and is threatened by the same forces and international competition for manufacturing
jobs that affect other high technology industries. Many economists believe there is a strong link between
manufacturing and R&D: lose manufacturing and you lose the high-paying jobs in R&D, design and other
areas. Lose manufacturing and you lose the entire industry to foreign companies. This is particularly true
for process engineering dependent industries like solar PV where continuous improvements in manufacturing processes
play a major role in cost reduction and product improvement In the Harvard Business Review, Harvard professors Pisano and Shih wrote, the
decline of manufacturing in a region sets off a chain reaction. Once manufacturing is outsourced, process-engineering expertise cant be
maintained, since it depends on daily interactions with manufacturing. Without process-engineering capabilities, companies find it increasing-
ly difficult to conduct advanced research on next-generation process technologies. Without the ability to develop such new processes, they find
they can no longer develop new products. In the long term, then, an economy that lacks an infrastructure for advanced process engineering
and manufac- turing will lose its ability to innovate.22
C. Internal Link - US attempts to unilaterally interfere in Chinas perceived interests
will fuel Chinese nationalism and lead to a catastrophic war
Bandow 2007(Doug, China: Fragile Superpower, Readings in the Age of Empire, Foreign Follies,
September 7, ,http://www.antiwar.com/bandow/?articleid=11565)
Which naturally leads to relations with the U.S., the subject of the penultimate chapter of Shirk's book.
Beijing has an incentive to maintain good relations with the U.S. the PRC would suffer greatly from
American economic sanctions let alone military hostility, and "the best way for China to rise peacefully is
to behave like a responsible power and accommodate to the current superpower, the United States." If
only life was so simple. Warns Shirk: "on the other hand, inside China, other leaders, the public, and
the military expect Chinese leaders to stand up to the United States. Nationalist ardor runs high,
fanned by government propaganda and the commercial media and Internet. The United States, as the
dominant power in the world, is the natural target of suspicion and resentment in China, just as it is in
many other countries, particularly after the American invasion of Iraq. A Chinese political leader who
takes a principled stand against the United States always wins more points than one who gives in to
it." Where does the U.S. go from here? As is so often the case in international relations, responsible
statesmanship is necessary on both sides of the Pacific. Moreover, she adds, "only by understanding the
dangers of China's domestic fragility and incorporating this understanding into their policies can
Chinese and American decision makers avoid a catastrophic war." She advocates a series of sensible
steps focusing on Chinese international behavior, downplaying American military power,
demonstrating respect for China, working in Chinese-Taiwanese relations, and not overreacting to
China's economic rise. But that's not enough. Shirk wants to maintain "a strong military presence" in the
region and opposes building up Japan as a military power. As she notes, "Preventing war with a rising
China is one of the most difficult foreign policy challenges our country faces." That being the case,
Washington should emphasize conflict avoidance, stepping back militarily while shifting defense
responsibilities onto allied and friendly states. Perhaps the most important duty for U.S. policymakers
today is to distinguish between vital interests, such as defending America, and peripheral interests,
such as attempting to dictate events in East Asia in the face of a rising China. The world in which
America can micro-manage international events is disappearing. Washington, too, must learn to
accommodate. And America's interest will best be served by stepping back from confrontation where its
vital interests are not involved.
Miscalculation and escalation is the most likely impact scenario
Fisher, former writer and editor at The Atlantic, 11
(Max, 10/31/11, 5 most likely ways the US and China could spark accidental nuclear war,
http://www.theatlantic.com/international/archive/2011/10/5-most-likely-ways-the-us-and-china-could-
spark-accidental-nuclear-war/247616/, AL)
This three-part process can move so quickly that the best way to avert a nuclear war is for both sides to have absolute confidence that they
understand when the other will and will not use a nuclear weapon. Without this, U.S. and Chinese policy-makers would have
to guess -- perhaps with only a few minutes -- if and when the other side would go nuclear. This is especially scary
because both sides have good reason to err on the side of assuming nuclear war. If you think there's a 50-50 chance
that someone is about to lob a nuclear bomb at you, your incentive is to launch a preventative strike, just to be safe.
This is especially true because you know the other side is thinking the exact same thing. In fact, even if you
think the other side probably won't launch an ICBM your way, they actually might if they fear that you're misreading
their intentions or if they fear that you might over-react; this means they have a greater incentive to launch a
preemptive strike, which means that you have a greater incentive to launch a preemptive strike, in turn raising their
incentives, and on and on until one tiny kernel of doubt can lead to a full-fledged war that nobody wants. The U.S. and the Soviet
Union faced similar problems, with one important difference: speed. During the first decades of the Cold War,
nuclear bombs had to be delivered by sluggish bombers that could take hours to reach their targets and be recalled at
any time. Escalation was much slower and the risks of it spiraling out of control were much lower. By the time
that both countries developed the ICBMs that made global annihilation something that could happen within a matter of minutes, they'd also
had a generation to sort out an extremely clear understanding of one another's nuclear policies. But the U.S. and China have no such luxury --
we inherited a world where total mutual destruction can happen as quickly as the time it takes to turn a key and
push a button. The U.S. has the world's second-largest nuclear arsenal with around 5,000 warheads (first-ranked Russia has
more warheads but less capability for flinging them around the globe); China has only about 200, so the danger of accidental
war would seem to disproportionately threaten China. But the greatest risk is probably to the states on China's periphery. The
borders of East Asia are still not entirely settled; there are a number of small, disputed territories, many of them bordering China. But the
biggest potential conflict points are on water: disputed naval borders, disputed islands, disputed shipping lanes, and disputed underwater
energy reserves. These regional disputes have already led to a handful of small-scale naval skirmishes and diplomatic stand-offs. It's not difficult
to foresee one of them spiraling out of control. But what if the country squaring off with China happens to have a defense treaty with the
U.S.? There's a near-infinite number of small-scale conflicts that could come up between the U.S. and China, and though none of them should
escalate any higher than a few tough words between diplomats, it's the unpredictable events that are the most dangerous.
In 1983 alone, the U.S. and Soviet Union almost went to war twice over bizarre and unforeseeable events. In
September, the Soviet Union shot down a Korean airliner it mistook for a spy plane; first Soviet officials feared the U.S. had
manufactured the incident as an excuse to start a war, then they refused to admit their error, nearly pushing the U.S. to
actually start war. Two months later, Soviet spies misread an elaborate U.S. wargame (which the U.S. had unwisely kept secret) as
preparations for an unannounced nuclear hit on Moscow, nearly leading them to launch a preemptive strike. In both cases, one of the
things that ultimately diverted disaster was the fact that both sides clearly understood the others' red lines --
as long as they didn't cross them, they could remain confident there would be no nuclear war. But the U.S. and China have not yet
clarified their red lines for nuclear strikes. The kinds of bizarre, freak accidents that the U.S. and Soviet Union barely survived in 1983
might well bring today's two Pacific powers into conflict -- unless, of course, they can clarify their rules. Of the many ways that the U.S. and
China could stumble into the nightmare scenario that neither wants, here are five of the most likely. Any one of these appears to be extremely
unlikely in today's world. But that -- like the Soviet mishaps of the 1980s -- is exactly what makes them so dangerous.
CP
Plan Text: The Republic of China should increase its development of Ocean thermal
energy conversion plants.

China can solve location and private investment
Hall, Wall Street Journal, 2014
[Simon, 3-31, China's New Wager: Pulling Energy From the Ocean Lengthy Coastline, Pollution Make
Country a Prime Testing Ground in Joint Ventures With Western Firms,
http://online.wsj.com/news/articles/SB10001424052702303287804579446904069462752, Accessed 6-
29-14, JF]
HONG KONGA race is under way to unlock one of the world's biggest untapped sources of clean
energythe oceanwith China emerging as an important testing ground.
That could heighten competition with Western companies, especially if Chinese businesses begin using
technologies developed with joint-venture partners to expand rapidly.
The European Union so far has led efforts to harness the sea to make electricity, for which there are
three principal techniques: underwater turbines that draw power from the ebb and flow of tides,
surface-based floats that rely on wave motion and systems that exploit differences in water
temperature.
The world's first commercial, grid-connected tidal-flow generator was installed in Northern Ireland in
2008. Germany's Siemens AG SIE.XE -0.55% , a big investor in wave and tidal power, predicts that tidal
currents alone could someday power 250 million households world-wide. France's Alstom SA ALO.FR
+0.19% also is developing the technology.
But with 11,000 miles of coastline rich with energy potential and pollution that is getting worse, China is
seen by many experts as an ideal location to pioneer and commercialize ocean-energy technologies.
China is stepping up spending in the sector, and foreign companies including U.S.-based Lockheed
Martin Corp. LMT +0.40% are testing equipment and entering joint ventures in the country.
Among the projects under study with Chinese backing: the dynamic tidal-power wall, with turbines using
curved blades that are designed to allow eels and fish to pass through safely. If approved, the wall could
supply as much electricity as 2 large nuclear reactorsand cost as much as $30 billion. Investors
include the Netherlands government and a consortium of eight Dutch companies, including engineering
firms Arcadis ARCAY 0.00% NV and Strukton Groep NV.
The venture dwarfs other sea-power projects and could produce electricity more cheaply than offshore
wind farms, says Dimiti de Boer, a senior adviser for environment and climate change at the United
Nations Industrial Development Organization.
The project involves building a wall running perpendicular from the coast and then branching off into a
T, extending around 20 miles and studded with turbines that would channel and concentrate the power
of tidal water. Beijing provided $3.3 million for feasibility studies that are under way in China.
Construction is at least a decade away, though initial findings suggest that shallow waters on the
Chinese, Korean and European coasts could be suitable.
"China is at the cutting edge" in sea-energy technology development, says Mr. de Boer, who is based in
Beijing.
Making electricity from the sea still is far more costly than using coal, oil, nuclear reactors or wind, and
some technologies being tested in China could prove impractical.
Since 2010, Beijing has spent around one billion yuan, or roughly $160 million, on energy from the sea,
says Wang Chuankun, a former head of the ocean-energy committee of the China Renewable Energy
Society academic association.
Overall private investment in sea-energy projects in Europe has reached about $825 million over the
past seven years, and the U.S. Energy Department is supporting several Pacific Coast research ventures.
Chile, Australia and other countries also have substantial projects under way.
Many people in the industry believe China will be key, however. Lockheed is working with Chinese
conglomerate Reignwood Group, to build the world's first large-scale, ocean thermal-energy conversion
power station. The companies plan to decide by June where in Asia to build the 10-megawatt facility,
which will use warm surface water to heat ammonia, which has a low boiling point, making steam to
drive a turbine without carbon emissions. The steam is then condensed using deeper, colder water and
the cycle is repeated, producing a constant flow of electricity costing around 15 cents a kilowatt-hour.
That is more expensive than nuclear power but well below the 22 cents for offshore wind turbines,
according to the U.S. Energy Information Administration. Ten megawatts is enough to power about
10,000 Western households.
Lockheed believes that building utility-scale generators that are 10 times larger would be economically
and technically viable, says Dan Heller, the company's vice president of new ventures.
China has worldwide market share in renewable now Cross apply the Chia
Uniqueness, Hart 11, China leads green tech now
Mastny, World Watch Institute Senior Editor, 10
[Lisa, Oct. 2010, The World Watch Institute, Renewable Energy and Energy Efficiency in China: Current
Status and Prospects for 2020, http://www.worldwatch.org/bookstore/publication/worldwatch-report-
182-renewable-energy-and-energy-efficiency-china-current-sta, accessed 7/6/2014 CK]
Over the past few years, China has emerged as a global leader in clean energy, topping the world in production
of compact fluorescent light bulbs, solar water heaters, solar photovoltaic (PV) cells, and wind turbines.
The remarkable rise of Chinas clean energy sector reflects a strong and growing commitment by the
government to diversify its energy economy, reduce environmental problems, and stave off massive
increases in energy imports. Around the world, governments and industries now find themselves
struggling to keep pace with the new pacesetter in global clean energy development. Chinese efforts to
develop renewable energy technologies have accelerated in recent years as the government has
recognized energy as a strategic sector. China has adopted a host of new policies and regulations aimed at encouraging energy
efficiency and expanding renewable energy deployment. Taking lessons from its own experience as well as the experiences of countries around
the world, China has built its clean energy sector in synergy with its unique economic system and institutions of governance. At a time when
many countries still struggle with the aftermath of a devastating financial crisis, the Chinese government has used its strong
financial position to direct tens of billions of dollars into clean energy increasing the lead that Chinese
companies have in many sectors. Among other initiatives, the Chinese government has taken strong action to
promote renewable energy, establish national energy conservation targets, and delegate energy saving
responsibilities to regions. Key legislative actions include the national Renewable Energy Law, which entered into force in January
2006, the national Medium and Long-Term Development Plan for Renewable Energy, launched in September 2007, and the Medium and Long-
Term Energy Conservation Plan, launched in November 2004. Although per capita energy use in China remains below the international average,
it is growing very rapidly, spurred recently by the infrastructure-intensive government stimulus program launched in late 2008. Even with
efficiency advances, demand for energy is expected to continue to rise in the coming decades. Chinese energy consumption is
currently dominated by coal, and the major energy-consuming sector is industry. Improving the
efficiency of energy use and enhancing energy conservation will be critical to ease energy supply
constraints, boost energy security, reduce environmental pollution, green the economy, and tackle
the climate challenge. Since 2005, the Chinese government has elevated its energy conservation and energy
efficiency efforts to basic state policy. The 11th Five-Year Plan (200610) set an energy-savings target of 20 percent, and the
country has adopted administrative, legal, and economic measures to achieve this goal. During the first three
years of the plan, Chinas energy intensity its energy consumption per unit of GDPfell by just over 10 percent, saving 290 million tons of
coal equivalent (tce) and reducing the countrys greenhouse gas emissions by 750 million tons of carbon dioxide-equivalent. This pace of energy
conservation has rarely been achieved by the rest of the world. According to Chinas Medium and Long-Term Energy
Conservation Plan, the energy consumption per unit of major industrial products should reach or be
close to the international advanced level of the 1990s by 2010, and reach or be close to the
international upto- date level by 2020.Although China is working hard on this target and has recently
accelerated its pace of energy savings, especially in the industry sector, a gap remains. Challenges that impede
progress in energy savings include low fossil energy prices due in part to energy and fuel subsidies, an incomplete market-drivers policy, and the
lack of capacity building for energy saving. Chinas success in the renewable energy arena has been more dramatic.
Renewables use in China totaled some 250 million tce in 2008 (excluding traditional biomass energy).
Renewables accounted for 9 percent of the countrys total primary energy use that year, up from 7.5
percent in 2005. Hydropower dominated Chinas renewable energy usage, at 180 million tce, followed
by solar, wind, and modern biomass, which together comprised 70 million tce of renewables
consumption. Hydropower and wind power accounted for the bulk of Chinas total installed renewable
energy capacity in 2009, reaching 197 gigawatts (GW) and 26 GWrespectively. Cumulative wind installations more than
doubled that year, and new wind installations increased more than 100 percent, allowing China to
surpass the United States to become the largest market for wind powerhousing nearly one-third of
the worlds total installed capacity in 2009. Total installation of solar PV reached 310 megawatts (MW) in 2009,more than
double the 150 MWin place in 2008 but leaving China with still only 2 percent of the global installed capacity. China installed 42 million square
meters of solar water heaters in 2009 and increased the total installed capacity by 31 percent, to 135 million square meters, with the central
government providing strong incentives for rural installations. China has accounted for 7080 percent of the global market for solar hot water
systems in recent years.. Chinas rapid rise to global leadership in clean energy is rooted in an unusual level of
cooperation between government and industry, with the government providing a broad range of
incentives that have led to the creation of renewable energy industrial bases nationwide. Chinas past
two decades of investment in science and technology, focused in large part on the energy sector, has
been stepped up in recent years, with the aim of making the country an innovator as well as a low-cost
manufacturer of cutting-edge technologies These dramatic developments have implications that go well
beyond China. As the countrys skills in efficient, low-cost manufacturing are brought to clean energy
industries, this could widen the energy options for the world as a whole. Already, Chinese companies
have become a strong presence in clean energy markets in Europe and North America. Renewables in
China will almost certainly see continued strong growth in the years ahead as new policy incentives are
enforced, including a regional feed-in tariff scheme for wind power, a plan to build seven large-scale
windbases in six provinces, and the new Golden Sun program aimed at accelerating the domestic solar market. Across China,
provincial and city governments are working with industry to create industrial parks dedicated to clean
energy and are providing a range of subsidies and infrastructure investments to support the creation of
new companies, jobs, and revenues for local governments. Meanwhile, Chinas renewable energy products
and equipment manufacturing capacity are maturing rapidly. The domestic wind turbine industry has mastered
technology at the megawatt scale and beyond and now has an annual manufacturing capacity of 10 GW. China has become the worlds largest
solar PV producer, and domestic manufacturers are now offering complete production lines, from raw materials to solar modules. The annual
capacity to produce solar water heaters is more than 40 million square meters. Domestic industry players are paying attention
to both technological advancement and quality, aiming to improve the reliability of products while also
preparing for an impending expansion of the renewables market. Many Chinese renewable energy
companies rely heavily on export markets to fuel their growth. This is particularly true in the case of solar PV, where
most production is exported, but both the wind and solar hot water industries are now expanding their exports rapidly. This has led to
growing tensions with European and North American companies that are losing market share. Analysts
attribute this trend in part to the unusually strong state support that Chinese companies receive.
Renewable energy is positioned strategically in Chinas energy structure and is one of the most
important instruments for boosting energy security and tackling climate change. The country has set national
targets for a 10 percent renewables share in the countrys overall energy mix by 2010 and a 15 percent share by 2020. Forecasts suggest that
this share might reach 2832 percent by 2030 and 3045 percent by 2050,moving renewable energy closer to becoming a mainstream energy
resource.
Case
Oil

High oil prices are key to the Russian economy
Talley, Dow Jones Newswires, 2011 (Ian, IMF: High Oil Prices Opportunity For Russia Economic
Reform, September 14, http://online.wsj.com/article/BT-CO-20110914-714339.html)
Oil-producing Russia should take advantage of high commodity prices to restructure its economy,
the International Monetary Fund's executive board said Wednesday in its annual country survey.
"High commodity prices create a window of opportunity to embark on bold and decisive reforms
to strengthen growth prospects over the medium term," IMF board directors said. In particular,
Moscow should focus on building a stronger government balance sheet, lowering inflation,
developing a better banking system and fostering investment.
Russian economic collapse leads to nuclear war and terrorism
Filger, writer and founder of GlobalEconomicCrisis.com, 2009 (Sheldon, Russian Economy Faces
Disastrous Free Fall Contraction, Huffington Post, May 10, http://www.huffingtonpost.com/sheldon-
filger/russian-economy-faces-dis_b_201147.html?)
Should the Russian economy deteriorate to the point where economic collapse is not out of the
question, the impact will go far beyond the obvious accelerant such an outcome would be for the
Global Economic Crisis. There is a geopolitical dimension that is even more relevant then the
economic context. Despite its economic vulnerabilities and perceived decline from superpower
status, Russia remains one of only two nations on earth with a nuclear arsenal of sufficient scope
and capability to destroy the world as we know it. For that reason, it is not only President
Medvedev and Prime Minister Putin who will be lying awake at nights over the prospect that a
national economic crisis can transform itself into a virulent and destabilizing social and political
upheaval. It just may be possible that U.S. President Barack Obama's national security team has
already briefed him about the consequences of a major economic meltdown in Russia for the peace
of the world. After all, the most recent national intelligence estimates put out by the U.S.
intelligence community have already concluded that the Global Economic Crisis represents the
greatest national security threat to the United States, due to its facilitating political instability in the
world. During the years Boris Yeltsin ruled Russia, security forces responsible for guarding the
nation's nuclear arsenal went without pay for months at a time, leading to fears that desperate
personnel would illicitly sell nuclear weapons to terrorist organizations. If the current economic
crisis in Russia were to deteriorate much further, how secure would the Russian nuclear arsenal
remain? It may be that the financial impact of the Global Economic Crisis is its least dangerous
consequence.

Increasing cooperation shale boom solves
Thiegles, Domestic Energy Policy Analyst for EagleFordTexas, 6/20/14
(Shane, US could find unlikely energy ally in China, http://eaglefordtexas.com/news/id/128463/us-find-unlikely-energy-ally-china/, accessed
6/27/14, LLM)
For all that America and China butt heads and position themselves as rivals in the global energy game, however, the truth is that our
ongoing energy markets will be inextricably linked moving forward.
Ongoing talk says the US is all but certain to loosen restrictions on natural gas exports soon, and oil may not
be far behind. When that happens, we will have a huge monetary incentive to sell as much of our massive
energy stockpile as we can. Theres more natural gas in America than we can use, leading to rock bottom utility prices but also an
almost total lull in natural gas shale drilling, such as is found in Louisianas Haynesville and New Yorks Marcellus shales. Demand and
production are also growing at almost the same rate, meaning that if we want this gas to be profitable we have to find more prospective
buyers.
American companies have already made deals with China for Liquid Petroleum Gas, and its a safe bet
that China will be willing to buy whatever we have to sell. The US is also positioning itself as a leader
in the worldwide fight against climate change, and a widespread Chinese adoption of US gas would
make us look like a diplomatic leader. Recent studies suggesting natural gas wont reduce long-term ozone damage would also
be silenced, with focus shifting to the fight against a public health hazard.
As hydraulic fracturing starts to catch on in the rest of the world, energy supplies and influence will
continue to shift in response. Countries like the UK, Venezuela and Mexico are attempting to tap into local shale deposits in hopes
of replicating US success. If supply raises accordingly, the resulting price drop could make natural gas unprofitable for the foreseeable future. If
the US wants to make money for its efforts, and China wants to buy up diverse power options, the two could do worse than to form a
partnership sooner rather than later.

Independently, the increasing trade deficit will destroy the economy
Johnson, writer for ourfuture.org, 13 *Dave, citing an Economic Policy Institute report, Feb 8 2013, Fix The Trade
Deficit, Fix The Economy. http://ourfuture.org/20130208/fix-trade-deficit-economy-and-jobs-get-a-shot-in-the-arm, 6-24-14, Tang]
Yet another report is out showing how the trade deficit is costing us millions of jobs and hurting our economy. This
report has specific numbers: between 2.2 million and 4.7 million U.S. jobs, between 1 percent and 2.1 percent of
the unemployment rate and a gross domestic product increase of between 1.4 percent and 3.1 percent.
These are real numbers that were carefully calculated. This is a real problem that is hurting people, hurting small and
mid-sized companies, hurting communities, hurting our tax base and hurting our ability to make a living
in the future. And there are real solutions available to fix the problem.
If you saw the movie Roger & Me, you saw what happened to Flint, Michigan when GMs executives moved the jobs out of the country. That
movie showed what a trade deficit does. Roger & Me came out in 1989 and was really only a small, local look at what was coming to much of
the country. In the decades since then, the problem spread to entire regions. This is not some economic dislocation due to changes in the
economy; this is regional and even national devastation that doesnt have to happen and that no country should tolerate.
The trade deficit is huge. It transfers around $1 billion a day out of our country. For those well-to-do elites so
worried about the budget deficit instead of American jobs, factories, industries and our ability to make a living in the future, the trade
deficit increases our budget deficit by between $78.8 billion and $165.8 billion.
Hydrogen cells are too expensive and not feasible
Institute of Physics 2012
[Institute of Physics, Fuel Cells, http://www.iop.org/resources/topic/archive/fuel/, 7-2-14, JY]
Two things have prevented major production of hydrogen-powered cars until now:
the cost, and producing the hydrogen in the first place. Until recently, the platinum catalyst that
splits the hydrogen into an ion and an electron has been prohibitively expensive. Up to a few years
ago, hydrogen fuel cells cost around $1000 for every kilowatt of power they generated or
around $100,000 per cars. There were various avenues of research into how to bring the cost
down, including work at Lawrence Berkley Laboratories on replacing the platinum catalyst with a
platinum-nickel alloy that was 90 times more efficient. By last year, US Department of Energy
reported that it had got the cost down to $61 per kilowatt far closer to the target cost of $30. One
further possibility being explored by Ballard Power Systems is enhancing the platinum with carbon
silk. This is expected to bring a 30% reduction in cost with no loss of performance. Where does the
hydrogen come from? As free hydrogen doesnt occur naturally on Earth in any large
quantity, it has to be extracted from water. This is normally achieved by reforming natural
gas or by passing a current through water, splitting it into its components, hydrogen and
oxygen. This has led some to question fuel cells credentials as an environmentally friendly power
source theyre only as green as the electricity that makes the hydrogen, which
often comes from burning fossil fuels. But some have suggested that hydrogen can instead
by produced at home by using sunlight to split water with the help of a catalyst, titanium dioxide
the white in white paint. With more centralised production, a large infrastructure of hydrogen
refueling stations would be required if vehicles powered by fuel cells are to become used more
widely than just by demonstration taxis. The first commercial hydrogen refueling station was
opened in Iceland in 2003. Japan has a number of filling stations and they are becoming more
common in the US however this may change now that the Obama administration has cut off public
funding for the development of hydrogen vehicles. The first hydrogen station in the UK in
Hornchurch, northeast London closed in 2007 after the end of a three-year trial of
hydrogen-powered buses. Others have since opened up in London to support a larger trial of buses,
and in Birmingham.
Solvency
Aff cant solvedemonstration plant alone takes five years, on top of
commercialization
Vega, University of Hawaii at Manoa School of Ocean and Earth Science and
Technology Hawaii Natural Energy Institute Specialist, 2010
[Louis A., 2010, Offshore Technology Conference, Economics of Ocean Thermal Energy Conversion
(OTEC): An Update, http://hinmrec.hnei.hawaii.edu/wp-content/uploads/2010/01/OTEC-Economics-
2010.pdf, p. 14, IC]
In discussing OTECs potential it is important to remember that implementation of the first plant
would take about 5-years after order is placed. This is illustrated with the baseline schedule shown
in Table 7. The time required for each major activity also applies to the pre-commercial or
demonstration plant. Completion of the engineering design with specifications and shop drawings
would take one-year. Presently it is estimated that the licensing and permitting process through
NOAA (in accordance with the OTEC Act) would take longer than 2-years for commercial plants with
the provision of exemptions from the licensing process for plants considered to be demonstration
plants because of the limited duration of the operational phase. A survey of factories that can supply
all equipment required for the OTEC systems discussed above shows that no technical
breakthroughs are required but that some components would require as long as 3-years to be
delivered after the order is placed. The solicitation of equipment quotes based on technical
specifications, as it was done in preparation of this report, indicates that long-lead items would
require from 18-months to 36-months to be delivered. Based on experience with offshore projects
of similar size it is expected that one-year would be required to complete the deployment with a
second year set aside for commissioning.

Scaling up too quickly is risky- aff authors agree
McKenna, freelance environmental writer, 2008
Phil, Deep oceans may offer limitless green energy, New Scientist, 11/22, Vol 199, Issue 2683, p. 28-9
For Cohen, who has also waited decades for ocean thermal to come into its own, such a large plant
seems overambitious, especially as it is coupled with the production of hydrogen, whose distribution
structure is still largely undeveloped.
"Scaling up so quickly could be risky," warns Cohen. "I'd like to see us move fast on ocean thermal but
I think we have to be careful."
Not feasibletransmission lines cost too much
Kindt, University of Illinois Professor of Business and Legal Policy, 1984
*John Warren, 1984, Ocean Thermal Energy Conversion, Georgia Journal of International and
Comparative Law, 14:1, p.9, IC]
The economic feasibility of the underwater cables designed to transmit the electricity to shore is a
critical factor for non-grazing OTEC power plants. This potential problem area stems from a lack of
experience in dealing with projects of such magnitude. 1 The economic considerations of transmitting
electricity from distant offshore areas to a coastal state could be prohibitive. For example, the cost of
underwater transmission lines, estimated at $1 million per mile, to an OTEC site situated 200 miles
offshore could "equal the capital cost of constructing the OTEC plant." 2

Commercialization fails- high capital costs and lowered cost of alternative renewables
prevents investment
Muralidharan, in his masters thesis for a Master of Science in Engineering and Management degree at
MIT, 12(Shylesh Muralidharan, B. Tech. Mechanical Engineering, Pondicherry University. 1998, Master
of Management Studies, University of Mumbai, 2001 Submitted to the System Design and Management
Program in Partial Fulfillment of the Requirements for the Degree of Master of Science in Engineering
and Management at the Massachusetts Institute of Technology, Assessment of Ocean Thermal Energy
Conversion, February 2012, pg. 98, KShapiro)
This study has shown that investments in OTEC become more favorable with scale, as costs are
projected to decrease by more than one-fifth with every doubling of plant output. But the capital
intensive nature of OTEC projects will be a deterrent to immediate large-scale investment, especially
by private investors. Energy technologies such as wind and solar might be seen as less risky renewable
energy investment options, given their proven costs and performance. Also, as these technologies are
currently ahead of OTEC in market maturity, their levelized cost of energy might continue to decrease
significantly in the coming years. These other available options for renewable electricity generation
may impede investments in OTEC.

Low temperature differentials make OTEC inefficient
Williams 2002
[Lawrence O., An End To Global Warming, p. 44-45, JY]
The surface of the ocean in the tropics has a temperature of 24 to 28 degrees Celsius. The water at
depths greater than about 500 meters is at a temperature of about 4 degrees Celsius. This
temperature difference of 20 to 24 degrees can be used to drive power-generating equipment.
When the size of the ocean is taken into account, the total energy available is many times that used
by humanity. 102 The efficiency of heat driven machines is dependent on the temperature
difference between the heat source and the coolant. With the maximum 20-Kelvin difference
available from seawater, the peak theoretical efficiency is 7%. The low efficiency results in a very
large power plant if useful amounts of energy are to be recovered. A 100 MWe electric plant must
have a coolant pipe 10 meters in diameter descending 400 to 500 meters. There must be millions of
square meters of heat exchanges to extract the heat from the surface water. All this equipment
must be protected from the corrosive effects of seawater and the growth or marine organisms. The
problem of designing, operating, and maintaining such plants are formidable. 103 The facilities used
to harvest the ocean thermal energy are called OTEC plants (Ocean Thermal Energy Conversion). To
achieve their maximum potential they must be located in the open ocean near the equator, far
from any market. Several schemes to transmit their output to the market have been examined. The
most practical appears to be: use the electric power to electrolyze water to produce hydrogen and
oxygen. The oxygen can be vented and the hydrogen liquefied for shipment to market. This scheme
allows the OTEC plant to produce a storable fuel that can be used for most energy needs. Several
small demonstration plants have been funded by the United States Department of Energy and the
State of Hawaii. 104 These plants have proven the general technological feasibility of the concept.
They have also helped to identify the following collection of severe problems. The optimum location
far out at sea in the equatorial ocean, make direct transport of electrical energy to the markets
difficult or impossible. Theauxillary quipment needed to produce fuels, such as hydrogen, will
greatly increase the complexity of the facility. The plants will be very costly when configured to
produce fuels. Biological fueling of the heat exchange equipment prevents operational problems.
Solutions, such as chlorination of the water, introduce significant environmental pollution. Because
of the large area of heat exchanges required, storm resistance is difficult and costly to achieve. The
environmental impact of a large number of these plants on the open ocean ecosystem is difficult to
assess. The combined effect of cooling the surface and raising large amounts of deep water to the
surface is likely to change the plant and animal life in the zones where the OTEC plants operate.
These difficulties support the position that OTEC plants are unlikely to be a major long-term
Warming
No extinction we have time to adapt
Mendelsohn, Professor of Environmental Studies at Yale University, 2009
(Robert O., Climate Change and Economic Growth,
http://www.growthcommission.org/storage/cgdev/documents/gcwp060web.pdf)
These statements are largely alarmist and misleading. Although climate change is a serious problem
that deserves attention, societys immediate behavior has an extremely low probability of leading to
catastrophic consequences. The science and economics of climate change is quite clear that emissions
over the next few decades will lead to only mild consequences. The severe impacts predicted by
alarmists require a century (or two in the case of Stern 2006) of no mitigation. Many of the predicted
impacts assume there will be no or little adaptation. The net economic impacts from climate change
over the next 50 years will be small regardless. Most of the more severe impacts will take more than a
century or even a millennium to unfold and many of these potential impacts will never occur because
people will adapt. It is not at all apparent that immediate and dramatic policies need to be developed to
thwart longrange climate risks. What is needed are longrun balanced responses.
Warming is slowing down
Morales 2-9-14 *Alex, reporter for Bloomberg News in London, Global-Warming Slowdown Due to
Pacific Winds, Study Shows, http://www.bloomberg.com/news/2014-02-09/global-warming-
slowdown-due-to-pacific-winds-study-shows.html]

Stronger Pacific Ocean winds may help explain the slowdown in the rate of global warming since the
turn of the century, scientists said. More powerful winds in the past 20 years may be forcing warmer seas
deeper and bringing cooler water to the surface, 10 researchers from the U.S. and Australia said today in
the journal Nature. That has cooled the average global temperature by as much as 0.2 degree Celsius (0.36 Fahrenheit) since 2001.
Scientists have been trying to find out why the rate of global warming has eased in the past 20 years while
greenhouse-gas emissions have surged to a record. Todays paper elaborates on a theory that deep seas are absorbing more
warmth by explaining how that heat could be getting there.
Global warming not real- 2014 was coolest year in history
Taylor, managing editor of Environment & Climate News for the Heartland Institute,
2014
*James, May 9, Record Antarctic Ice Extent Deflates Global Warming Scare. Heartlander Magazine.
from http://news.heartland.org/newspaper-article/2014/05/09/2014-uss-coldest-year-ever-so-far,
Retrieved July 12, 2014, WZ]
This year has been the coldest year in history through May 6, according to the network of nationwide
thermometers monitored by the U.S. Historical Climatology Network. Summer officially arrives later this
month, and it better be a warm one if the United States is to avoid setting a new record for its coldest
year ever.
Southeastern Florida and the U.S. Southwest are the only regions with above-average temperatures so
far this year. The Upper Midwest and the Great Lakes region are experiencing the coldest departures
from average temperatures.
Assertions that warming temperatures in the United States are causing a host of problems are soundly
contradicted by the objective temperature data. The U.S. Historical Climatology Network thermometers,
which have been measuring U.S. temperatures since the 1890s, show no long-term trend in U.S.
temperatures.