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Unleash Asian solar panels to fight climate change

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The Boston Globe reports that the US government has further undermined its carbon-reduction goals by putting up a needless barrier to imported renewables.

On Tuesday, the administration toughened existing tariffs on Chinese-made solar panels, which increase their cost to American consumers by 27 to 78 percent. At a time when the administration is seeking to prod the US economy to move away from fossil fuel reliance, making renewables artificially more expensive is precisely the wrong move.

After years of false starts, the price of solar panels has plunged rapidly of late, to the point that they’re now becoming price-competitive with coal and gas. That’s unmitigated good news for the environment, and it has come at least in part because of increased manufacturing capacity in China.

But the administration, egged on by domestic solar-panel manufacturers, views cheap Chinese imports as a problem and has treated solar panels like a traditional trade dispute. The administration slapped tariffs on the panels in 2012, on the grounds that Beijing’s subsidies allowed Chinese manufacturers to sell panels at below cost. Tuesday’s actions by the Commerce Department strengthened those tariffs.

In a dispute over a different product — the proverbial widget — the tariffs might make a lot more sense. Foreign government subsidies do create unfair advantages. And China does have lower labor standards, though an MIT study last year reported that a better supply chain also played a part in China’s competitive advantage on solar.

Regardless, the threat of climate change demands a more pragmatic approach that weighs strict adherence to free-trade principles against environmental priorities. Another way of looking at China’s subsidies is that China’s national and local government bodies made investments in the solar industry that the United States has not. And if a foreign government puts money into making renewable energy cheaper, so much the better for everyone.

Whether or not China’s motives for the solar subsidies were environmental — and that seems unlikely — the effect of that policy has been to make renewable power more competitive around the globe. China and the United States recently signed a joint accord on reducing greenhouse gas emissions, and profess to believe that climate change is an urgent challenge. With that common goal in mind, the Obama administration should applaud Chinese investments in renewables — and push Congress to invest in clean power technologies here, too.

Source: The Boston Globe

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