It sounds easy. We dream of something we want, something good, a product that does good things in good ways. It may not exist, or be feasible with existing technology, but that only makes it better. We tell government, which takes on the task of “jump starting” an entire industry. It subsidizes research and development, manufacturing and installation, then “stimulates demand” by subsidizing purchases, even ordering consumers to buy if need be.
By the time the subsidies fade, the product will be real and the demand real and we will have a wonderful economic explosion with thousands upon thousands of good jobs for people doing good things. That’s the theory. It’s supposed to work. President Obama and Gov. Jay Inslee say it over and over. “Green jobs” is the executive shorthand.
And there are green jobs, perhaps not enough to live up to our hopes, but green jobs nonetheless. It turns out that many of them nearby are threatened by international intrigue and subsidies that compete with other subsidies, conflicting political favors and old-fashioned protectionism.
The future victims work near Moses Lake for REC Silicon, a company that makes large amounts of very pure solar-grade polysilicon, a key raw material in the manufacture of photovoltaic solar panels, which produce clean renewable energy by turning sunlight into electricity. REC Silicon employs 500 people in what are described as good-paying jobs, which makes it a very large and desirable employer by anyone’s standards, but especially in Central Washington. Good jobs making good things — the goal as advertised.
REC Silicon’s biggest customer by far is China, which is the world’s largest solar panel maker. Chinese companies consume 80 percent of the Moses Lake plant’s output, REC told The Seattle Times. But China announced in July it would impose a 57-percent tariff on U.S. polysilicon, including the stuff from REC. The Chinese tariff is a tit-for-tat response to a 35-percent U.S. tariff on Chinese solar panels, imposed last fall at the request of U.S. panel makers who complained China was selling far too cheaply.
REC describes the tariff as a “massive blow.” The Norwegian-owned company has delayed expansion of the Moses Lake plant and although it has yet to lay off workers, it told The Times it can’t last much longer without political help.
These are the “unintended consequences” economists warn often stem from futile trade wars. U.S. bureaucrats listened to a handful of American solar panel makers who complained their subsidized customers were buying equipment too cheaply from subsidized Chinese competitors. A tariff would effectively raise the price of solar panels in the United States, and make them competitive once again, to level the playing field.
This gave headaches to American sellers and installers of solar equipment, who naturally fear a drop in demand for their services as prices rise. This is the green industry where American solar subsidies are most concentrated. Then, of course, China has its own subsidized industry to protect, and predictably retaliated. For the European Union, which threatened its own solar tariffs, China vowed to block wine imports. They cut a deal. For the U.S., it was polysilicon.
Let us cut a deal. Inslee and Sens. Patty Murray and Maria Cantwell are said to be working to resolve the mess, and it is a mess. Let us hope they sort it out quickly enough to save some genuine green jobs.
Tracy Warner’s column appears Thursdays and Fridays. He can be reached at email@example.com or 665-1163.