EU-China: And now there is a solar war...

Here is a link to article in China Daily where I highlight one key aspect. Below some more thoughts:

Unfortunately this was expected. Two years ago I launched an initiative, 21st Century Solarmap, that I hoped could mitigate this development. Did not get enough support for it at the time to stop the current development, but it might be time to re-launch it with more stakeholders?

It should be obvious to enough people that we need to move forward with accelerated deployment of solar solutions and that frameworks like those in WTO should not and can not be used when transformative change is needed. We need collaboration, not war...

My thoughts regarding 1. Is it smart of the EU to initiate anti-dumping investigation on solar panel imports from China (especially when China have asked for a dialogue to find smart ways forward)?

2. What could China do (beside what it is already is doing)?

1. Is it smart of the EU to initiate anti-dumping investigation on solar panel imports from China? No, it is not smart from EU to act in such a way. If EU is a low-carbon champion they should start from a low-carbon development goals and ask if the low process from China is helping achieve the goals in EU and the global goals. Then after they should look at how EU can ensure that they use the low process on solar panels to become leading exporter in related areas. We know that current trade rules need to show flexibility in order for us to ensure the accelerated uptake of low-carbon solutions. As the price of carbon is still zero or much to low in all around the world, including EU, we are today in reality subsidising fossil fuels.

To not address the hidden subsidies of fossil fuels and instead attack China for providing the kind of prices for solar solutions that the world needs, is not only undermining EU as a green champion it is a clear demonstration that EU look at short-term populism instead of long-term collaboration and employment. Low prices on solar panels already help EU to create new sustainable jobs in a low-carbon economy. EU is today leading in areas such as system solutions for solar panels, architects providing , buildings that are net producers of green electricity. All these depend on inexpensive solar panels and are already exported from EU. So EU is not only running the risk of punishing China and the world, it will most certainly make EU less competitive in the low carbon economy.

Taking a broader approach we also should note that low prices on solar panels is the future, and by reacting so strongly against low prices EU demonstrate that they are afraid of the future.

2. What could China do? My urge would be for China to have a two prong track when they respond to EU:

2.1. In order to avoid a destructive trade war and turn EUs destructive move into something positive it would be very good if China responded by asking for a broader review of WTO when it comes to environmental goods and services, this time with focus on climate change. It is clear that we must accelerate the uptake of low-carbon solutions. China has done this and for that China should be rewarded not punished. Current WTO legislation is designed for incremental improvements in existing systems, and this is positive in many areas, but not for low-carbon solutions. We need accelerated uptake and accelerated increase of trade in low-carbon solutions in many areas, for this WTO is not ready and a reform is needed (or WTO could be told that low-carbon trade is outside its mandate)

This case is similar to the situation where EU used WTO rules to put taxes on Chinas energy efficient light bulbs (CFLs). That time it was also clear that EU action was undermining a sustainable development, by increasing the global price on a vital low-carbon product, by making it more expensive both in EU, but also in the world by artificially keeping the prices high and attacking China .

2.2. In parallel with the WTO work it would be very helpful if China, if possible together with the BASIC block, could initiate a global dialogue on accelerated uptake of key low-carbon products and services. We are not talking about any ordinary product here, we are talking about goods that can help the world avoid a climate catastrophe. We need to discuss how the world can collaborate to reach this goal. We can not allow old legislation in WTO, that in some cases was helpful in addressing protectionism, undermine the necessary global development in the 21st century.

China will be a key country when it comes to deliver low-carbon solutions in the 21st century to the world, but have so far not been very active when it come to establishing global dialogues in key areas. This could be such an opportunity. Such a dialogue should obviously build on China's bilateral dialogues that have a very strong focus on low-carbon development and a global peaceful development. These dialogues could develop into concrete action plans for new global governance initiatives.

With the failure first in Copenhagen and later in Rio to reach any kind of meaningful agreement on a low-carbon development strategy, this trade problem with wind and solar could be turned into an opportunity for the first serious dialogue about global governance for sustainable development in the 21st century.