Courtesy of Mish.
Before discussing Paul Krugman and how right he was, let’s first take a look at the Spiegel Online report EU To Impose Tariffs on Chinese Solar Panels.
Back in 2008, the German solar manufacturing industry was riding the crest of a wave of growth fuelled by generous subsidies and high demand. That year, the darling of the German solar industry, SolarWorld, logged a 31 percent annual increase in revenue for a total of €900 million ($1.18 billion) and expanded its operations by opening North America’s largest solar cell plant.
Four short years later, in 2012, the company announced €492 million in losses, and today SolarWorld is in the midst of a major debt restructuring deal to stave off bankruptcy.
Ironically, SolarWorld made it just long enough to see the success of the effort it spearheaded to slap tariffs on Chinese companies it suspected of conducting price dumping in order to wipe out the competition.
On Wednesday, the European Commission in Brussels agreed to impose punitive tariffs of 47 percent on Chinese solar goods.
Last year, China sold €21 billion worth of solar panels and related components in Europe. But all of that is just about to get a lot more expensive with a 47 percent cost increase on panels made in the country. The levies are likely to see a response from China, which has already threatened tariffs seen as reactive in an industry that grew by a power of ten in the last five years as solar panels dropped in price by more than 75 percent. And as with any quickly growing industry, the road has been rocky and strewn with wrecks.
SolarWorld helped launch the anti-dumping case with a formal complaint filed together with other solar companies with European Commission last July and a similar case in the United States that resulted in tariffs of up to 250 percent on Chinese solar module manufacturers.
Clean Energy Hypocrites
Please note the irony in these tariffs. The EU is hell bent on promoting “clean energy” but does not want clean energy if the cost is too cheap. Obama’s position is similar.
Supposedly China is dumping solar panels below cost? So what? If the EU and US were really interested in clean energy and reducing emissions, the only thing better than cheap solar panels would be free solar panels.
Step back for a second and think of the benefits of free panels. On one side of the equation, the EU and US would look a few hundred solar panel making jobs. However, hundreds if not thousands of businesses and individuals would employ solar panels if they were free.
Think of all the trucking jobs, dock unloading jobs, and installation jobs, that would result from free solar panels. Whatever jobs were lost in manufacturing (if any), would come back 100 times over in other jobs.
Ironically, and in spite of all the protests from manufacturers, I rather doubt any manufacturing jobs were lost in the first place.
…
