by Jerry Harris
(Race & Class, Vol. 52 #2, Oct-Dec. 2010)
Abstract: Sustainable energy use is rapidly developing, often with state support and patriotic political rhetoric. But the solar and wind energy industries are highly transnationalized and already inserted into global patterns of accumulation. While possibly solving some of the most pressing problems between capitalism and environmental sustainability, green capitalism still fails to address the contradiction between labor and capital. Therefore, any progressive strategy for social transformation must link the fair treatment of nature and labor together.
Is the future of capitalism green? And will the country that leads in green technology dominate the global economy? That is certainly the outlook of important sectors of the capitalist class, both among long established corporations as well as new entrepreneurs. But the green economy, particularly the energy sector, is already taking a globalized path of development under the control of the transnational capitalist class (TCC). While innovative corporations may emerge as dominant players, it will be as transnational corporations (TNS), not as national champions of nation-states.
In the U.S. the green revolution is promoted as the way to maintain world economic supremacy. In President Obama’s state of the union speech he said, “the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.” (1) Environmentalist Hunter Lovins calls on the U.S. to lead the world in green innovation because
“they’ll rule the world, economically, politically, and probably militarily.” (2) Thomas Friedman wraps green technology in red, white and blue calling it the new currency of power. “It’s all about national power…what could be more patriotic, capitalistic and geostrategic than that?” (3).
But these dreams of national greatest are already outdated. Green energy can indeed extend the life of capitalism, but not within the confines of nation-centric logic and power. Major wind and solar corporations already operate on a global scale, with innovations and research ongoing in Europe, India, Japan, China and the U.S. Furthermore, the scale of the environmental crisis is beyond any one country to solve. It calls for a global response and advanced sectors of the TCC understand these world dimensions.
The environmental crisis actually offers an opportunity for capitalism to begin a new cycle of accumulation. A way to end the repeating failures of financial speculation with a renewal of productive capital. As Muller and Passadakis explain, “the point about the ecological crisis…is that it is neither solved nor ignored in a green capitalist regime, but rather placed at the heart of its growth strategy.”(4) By creating new systems of energy, transportation, architectural design and reengineering productive processes, capitalism can greatly reduce its abuse of the environment. This would free capital from environmentally harmful industries for new areas of investment and create profitable opportunities in dynamic new markets. Such a strategic shift will not only solve the current crisis but legitimize a new political regime and lay the foundation for a hegemonic bloc with a global social base. Nonetheless, this transformation will not solve the contradiction between capital and labor, and the TCC may lack the political resolve to move fast and far enough to avoid major environmental disasters. But if the transformation does occur over the coming decades, it may solve the most pressing problems between finite environmental resources and the need of capitalism to grow and profit.
With global warming widely accepted as an existential crisis capitalists have seized upon alternative and sustainable energy as a major transformative technology. United Nations Secretary General Ban Ki Moon has called for a worldwide “Green New Deal” that would be a “wholesale reconfiguration of global industry.” (5) A study published by Scientific American argues for a $100 trillion dollar program, projecting that “100 percent of the world’s energy, for all purposes, could be supplied by wind, water and solar resources by 2030.” (6) That is a fair amount of money, but Fatih Birol, chief economist at the International Energy Agency points out that, “Each year without an international agreement adds $500 billion to the costs – estimated at $10 trillion annually — of cleaning up the power sector to help keep temperatures within a range that would avoid unstoppable climate changes.” (7) Given the scale of the problem $100 trillion over 20 years sounds feasible. But dedicating $5 trillion a year from a world GDP of $54 trillion (2007) seems impossible without a political revolution.
Although still a very small part of energy consumption, wind and solar power are rapidly expanding and total clean energy investments in 2008 were $155 billion and $145 billion in 2009. (8) Eventually renewable energy may play an economic role similar to the digital, computer and telecommunications revolution of the past 30 years. These technologies laid the basis for globalization and vastly expanded access to knowledge and information. (9) Economically there was innovation, dynamic emerging corporations and new cycles of accumulation. The technologies were also used by progressive activists across the world for organizing and education. Just as the digital revolution spearheaded a new era of capitalist globalization, so too can green technology open the door to the next era of growth while promoting important progressive changes.
While these possibilities exist, they will develop within historic capitalist patterns that continually reassert themselves. Digital technologies became centralized into a handful of transnational corporations, both old and new, that today dominate the market and consume innovations through constant buy-outs. That pattern is already appearing in the green energy field, except there will be no singular leading location such as Silicon Valley. Solar and wind technologies are global and being consolidated by a small number of competitive TNCs. This does not necessarily undercut their environmental benefits. But it does undercut the democratic possibilities for a decentralized system of energy, and fails to solve the problems between capital and labor. By examining the major wind and solar TNCs below, we can begin to uncover the character of the new green economy.
The wind power industry is already dominated by large TNCs. The top eleven corporations that produce and install wind turbines held 95% of the market in 2008. These TNCs are a combination of relatively new players that established themselves over the last twenty some years and older corporate giants. Vestas, the Danish TNC, held the number one spot with 19% of the market, down from 24.6% in 2007. The only significant U.S. TNC, G.E. Energy, was second with 18%. Three Germany transnationals, Enercon, Siemens and Nordex occupied 20% of the market; two Spanish corporations, Gamesa and Acciona held 15%; Sinovel, Dongfang and Goldwind, all from China controlled 13%; and the India giant, Suzlon, acquiring REpower of Germany, now has 8%. (10) Although wind power is only one percent of global energy, it continues to experience rapid growth and receives the largest share of renewable energy investments, $48.9 billion in 2009.
Because of the size and complexity of wind turbines the industry tends towards large manufacturers that often also install, service and maintain wind farms. Politically, building a green energy base is presented with nationalist rhetoric about oil independence and local jobs. And government subsidies and incentives have been key to creating a market in all countries moving in this direction. But as pointed out in a study by the Peterson Institute and World Resources Institute, “Cross-border investment rather than trade is the dominant mode of global integration. Standard international trade in wind energy equipment is relatively small and declining. Instead, foreign direct investment (FDI) flows dominate the global integration of the wind sector.” (11) With $50 billion in total sales in 2008 only about 10% were in exports. A indicator of growing integration is FDI in newly built wind turbine factories. World totals were just $200 million in 2003 but grew to about $2.3 billion by 2008. (12) Consequently, although the industry is young it’s already following transnational lines of development. At the end of 2009 there were 130,000 wind turbines installed or under construction. Europe has half the world’s wind turbine capacity and the industry employees 155,000 workers, but China and the U.S. are its fastest growing markets.
A priority for the U.S. is creating a green manufacturing base to replace the auto industry and other disappearing industrial jobs. Although a rapidly expanding market exists, the U.S. still lacks firm footing when it comes to production. In 2008 the U.S. was the largest importer of wind turbines, buying 42.8% of the world’s total. In comparison, Germany was a distant second with 9%. But Germany was also the largest exporter with 41.3% of the market, followed by Denmark at 25.8% and India with 13.4%. (13) G.E. Energy is the largest U.S. manufacturer, with 90% of its sales inside the country and 43% of the U.S. market in 2008. But the next four largest producers and installers were all foreign TNCs: Vestas, Siemens, Suzlon and Gamesa. Manufacturing is key to job creation in the wind industry because established wind farms employ few workers. For example, the Spanish TNC Acciona built four U.S. wind farms which together employ only 76 permanent workers. Their 14,000 acre farm in South Dakota employs just 21 people. (14)
Creating U.S. jobs won’t mainly depend on large U.S. owned corporations but thousands of small and mid-size suppliers and innovators linking to TNCs that are building regional hubs of production. There are about 8,000 parts to a wind turbine, so extensive supply chains are necessary. In 2008, 51% of turbine parts were imported. In 2009 this was still evident with 80% of the jobs created by government stimulus money for wind power going overseas. But a heavy band of potential suppliers exist from Buffalo through Ohio, Michigan, Indiana and into Chicago and Milwaukee. Suppliers range from small locally owned companies, to those with facilities in a number of states, and others with global reach. The Great Lakes Wind Network lists 380 national suppliers and 500 “emerging” suppliers. (15) The old industrial heartland around the Great Lakes is particularly strong in castings machining, bearings, gears and forges, laying a foundation for future growth. Other hubs are forming around cities such as St. Louis, Kansas City and Philadelphia. Employment in the overall industry is growing fast, from 50,000 in 2008 to 85,000 the next year. Besides small and mid-size national suppliers large TNCs are active in the supply chain such as ABB from Switzerland and Bosch-Rexrodt from Germany.
Governmental local content requirements play an important role in creating jobs by forcing TNCs to locate facilities inside national markets. These have been used extensively in Spain, Brazil, Canada and China, and are part of Obama’s $1.5 billion environmental stimulus package. So for example, to supply the energy industry Sweden’s giant SKF now operates 13 manufacturing sites in the U.S. Consequently, mandates for national content and local jobs actually serve to deepen globalization as TNCs respond by locating their subsidiaries around the world.
This follows established patterns of global production where large TNCs build facilities through greenfield FDI, use foreign affiliates and seek out mergers and acquisitions in growing markets. Smaller nationally owned suppliers are then engaged, integrating the local economy into global accumulation. Ultimately the majority of jobs are in nationally owned companies but employment revolves around global TNCs, their control of major technologies, and the size of their investments.
The pattern of TNC involvement continues in the ownership and operation of wind farm power generation. The largest is NextEra Energy Resources, a U.S. firm with a solid lead that operates 90 facilities in 25 states and Canada. But in the number two spot is Iberdrola Renewables, an arm of the fourth largest utility in the world. When launched by the parent company, Iberdrola Renewables became the largest Spanish IPO raising $7.1 billion. Next is MidAmerican Energy, a subsidiary of Berkshire Hathaway, the global investment firm of Warren Buffet. Buffet has even larger holdings in both coal and oil. Last of the big investors is Horizon-EDPR, a subsidiary of a Portuguese utility corporation. (16)
We can now briefly explore the transnational characteristics of the dominant wind turbine manufacturers. Vestas has 20% of the installed wind turbine market spread over 63 countries. It employees over 20,000 workers from 56 different nationalities. Its largest single market is the U.S. although its penetration is greater in Denmark and Germany. Vestas has 28 production facilities, nine in Denmark , five in China, three in Germany and three in the U.S. Its cluster of factories in Colorado is expected to employ more than 2,000 workers. Research is carried out in the UK, Denmark, Germany, India, Singapore and the United States. Denmark generates 21% of its electricity from wind, the most in the world. (17) Another important Danish TNC is LM Glasfiber the world’s leading supplier of wind blades. With 7,200 workers it operates factories in Denmark, Poland, Spain, India, China and Canada. In the U.S. it opened manufacturing facilities in Arkansas and North Dakota making wind blades for Samsung.
General Electric is ranked number one in the world for foreign held assets. G.E. Energy is just one corporate arm with 40,000 employees out of a global workforce of 323,000 spread over 100 countries. Within G.E. Energy are oil, coal, nuclear, gas, biomass, solar and wind power sections. Wind turbine facilities are operated inside the U.S., Germany and Spain. In a joint agreement with TPI Composites they also produce wind blades in Iowa, Rhode Island, Ohio, Mexico and China. In 2010 G. E. announced a $462 million plan to expand production in Britain, Germany and to Norway and Sweden creating 2,000 jobs. Their largest contract for $1.4 billion is to supply 338 turbines for Oregon’s Shepards Flat wind farm. (18) The parent corporation also owns G.E. Energy Financial Services which has a portfolio of 40 wind farms. With a fund of $22 billion, just $4 billion is dedicated to renewable energy and 20% of its assets are outside the U.S. in 35 different countries. (19) In terms of operating their supply chain a statement from their web site underscores their transnational character; “In order to serve the global market, we utilize a global supply chain. So anytime you look at a gas turbine, you could be looking at one component perhaps sourced and machined in China, another component may come from Brazil, other components may come from Eastern Europe.” (20)
Among the three main German TNCs Enercon, established in 1984, has the largest share of the wind turbine market. With 12,000 workers worldwide it has production plants in Germany, Sweden, Portugal, Turkey, India and Brazil. Enercon has installed 15,000 turbines in 30 countries with service and maintenance contracts with 85% of their global customers. In Germany they have 51.6% of the market, Vestas is second with 31.6%. (21) Siemens is one of the world’s great TNCs and ranks 15 in foreign held assets. They have 428,000 workers in almost every country on earth. Their energy division includes coal, geothermal, gas, oil, solar and wind. But unlike G.E., Siemens has integrated green technologies more deeply into their overall strategy and line of products. In 2009 the company claimed to save an estimated 210 million tons of carbon dioxide, equivalent to the amount generated by New York, London, Berlin and Tokyo combined. They have sold 7,800 turbines worldwide and are the largest supplier and builder of offshore wind farms, having nine in the U.K. and eight in Denmark. They employee 5,000 in the wind industry, but 3,900 of those are located in Denmark. In the U.S. they have penetrated turbine markets in six states, having factories in Iowa and Kansas. But that’s a small part of Siemens’ U.S. presence, they have 69,000 employees working in all 50 states with U.S. sales of $22.4 billion. (22)
Nordex AG has 2,200 workers and exports 95% of its turbines and rotor blades to 34 countries. In the U.S. they have built a $100 million plant in Arkansas, and have additional factories in China. The U.S. generates 20% of Nordex’s global revenue and its involvement in conservative Arkansas shows the growing acceptance of foreign TNCs integrating into local economies. As Arkansas Governor Mike Beebe said, “In a time when our economy has slowed, it’s gratifying to see the creation of high-paying jobs…in Arkansas jobs in clean-energy industries are outpacing the overall job market, and Nordex is helping to drive that.” (23)
Spain gets 12% of its energy from wind, the second highest in the world. Gamesa is a dedicated renewable energy company with wind turbines in 20 countries and 6,493 workers. Its global markets account for 71% of its sales, half of which are in Europe. It has three production plants in the U.S. plus more in Denmark, Germany, Italy, France, Portugal, Spain, India and Japan. Additionally it has 82 wind farms in Spain, 20 in Germany, ten in Italy, eight in Portugal, four in the U.S. as well as others. (24) Spain’s other major player is Acciona, a diversified TNC holding over 100 companies with a $16 billion market capitalization. It operates in 35 countries with 41,450 workers. Acciona Energy was formed in 1989 and entered the U.S. market in 2003 where it has four wind farms, a wind turbine plant in Iowa and the world’s third largest solar farm in Nevada. (25)
In India the wind energy field is dominated by Suzlon, 66% owned by the Tanti family. Tulsi Tanti personally owns 27% and is ranked the 368th richest individual in the world by Forbes. (26) Suzlon controls 50% of the market in India, employs 14,000 people in 21 countries, 4,000 of which manufacture turbines in India, China and the U.S. Suzlon is considered the most vertically integrated wind turbine maker in the world. Their global management office is in Amsterdam, their international sales headquarters in Demark and they carry out R&D in India, Germany, the Netherlands and Denmark. They recently acquired Hansen Transmissions from Belgium and Germany’s REpower for $1.6 billion. (27) These acquisitions have catapulted Suzlon into the number three spot for global turbine production. But Suzlon’s rotor blades have been subject to large recalls and they have a poor environmental record. Their production facility in Minnesota was cited for dumping 27 tons of hazardous materials into the air and they have failed to file environmental reports for the last three years.(28)
Environmental violations from green energy investors are not uncommon. G.E. became infamous for its massive dumping into the Hudson River in New York. And the giant TNC, United Technologies Corporation, which bought 49.5% of Clipper Wind has been fined millions by the EPA. In 1991 it suffered the largest criminal environmental fine in history for dumping toxic waste. (29)
In 2010 China became the largest producer of wind turbines in the world, yet their corporations, unlike most others, rely almost exclusively on their domestic markets. With government support and a large internal market, three Chinese corporations are among the top ten global manufacturers. At first China relied on foreign TNCs and licensing agreements for technology. Wind power projects were dominated by Vestas, Nordex, GE Wind, Gamesa, REPower and five other TNCs. The biggest wind turbine complex in the world was built in China by Vestas with an agreement to transfer electronic control and generator technology. Danish corporation’s had 52.4% of the Chinese market, followed by Germany with 20.3%. (30) But by 2009 local Chinese producers supplied 80% of the market and renewable energy employed 1.2 million workers. The Chinese stimulus package of 2009 created a huge boost to the green energy industry as almost 40 percent of the $585 billion package targeted environmental projects. As Dallas Kachan of the Cleantech Group in San Francisco stated, “It’s not well known that China has set aside more money for the adoption of clean technologies than any other country on the planet.” (31)
The Chinese government has a strong national policy with many large government projects excluding foreign firms. Xinjiang Goldwind has been the biggest winner. Formed in 1998 they now have 25% of the national market and experienced 100% growth for eight straight years. As Chinese corporations have grown stronger they have entered transnational circuits of accumulation. Goldwind struck its first big export contract with Cuba, followed by the Shenyang Power Group building a Texas wind farm with U.S. Renewable Energy Group. The $1.5 billion project will import 240 turbines and be financed by Chinese state-owned banks. To quite critics, future joint ventures will produce and assemble turbines in the U.S. to met local content mandates.(32) Late in 2009 China also scored the world’s largest clean energy IPO since 2007, when wind developer Longyuan Power raised $2.6 billion in Hong Kong.
As evident from the above review, transnational accumulation patterns are firmly entrenched in the wind power industry. The field is occupied by TNCs that are either exclusively dedicated to renewables or older TNCs in which green energy is a small part of their overall corporate strategy. As the industry matures cross border mergers and acquisitions are growing. Some deals include Goldman Sachs with Portuguese power utility EDP, Germany’s EON and Spain’s Iberian and UK’s International Power acquiring Italy’s Trinergy. In total there was $11.5 billion in M&A deals for 2007. (33) An overview of the industry shows no one nation or company has a hegemonic position, but rather development is firmly in the hands of the TCC.
The production of photovoltaic panels (PV) for solar power is not as concentrated as the wind turbine industry. The ten largest PV manufacturers had 57% of the world market in 2007, down from 80% in 2004. More companies are entering the field with competing panel technologies and innovative research is varied. But according to the PV Status Report 2008, the industry is currently expanding “into a fully-fledged mass-producing industry” with increasing consolidation expected in the coming years. Growth rates of investments have averaged 250 percent annually since 2004, while the average annual revenue produced per worker is a scintillating $300,000. (34)
There are about 200 PV manufacturers worldwide. Some 130 of these produce thin film solar cells, but 90 percent of cells are produced by 82 companies involved with crystalline silicon. Of these 40 are in Europe, 27 in China, 19 in the U.S., 12 in Taiwan and 8 in Japan. Germany is the biggest market, three times the size of number two, Spain. Other significant markets include the U.S. and Japan. China and Taiwan are important producers but 98 percent of their panels are exported. (35) In all of these countries, corporations and markets have been stimulated by government subsidies, tax incentives and energy mandates. As with wind, without government support these new industries would be as yet unable to compete with coal and oil. While identified as PV manufacturers most of the corporations below are also involved in building and servicing large solar farms throughout the world.
The following chart shows the top ten Photovoltaic TNCs by market size.
|Transnational Corporation||Headquarters by Country|
PV Status Report
Japan has 11 PV manufacturers with about 23 percent of the world’s market. Sanyo launched solar development in 1975. It ranks 43 in the world for foreign held assets, holds 395 affiliates and 119,500 of its 180,500 workers are employed abroad. (36) As one of the world’s largest TNCs, Sanyo’s PV division is a small unit within the corporation. It operates factories in Japan, Hungary, Mexico and the U.S. in a seamless global assembly line. The plant in Oregon grows crystals and slices them into wafers, these are sent to Japan and turned into cells and then onto Hungary and Mexico where they become finished panels. The factory in Oregon received $45 million in state subsidies or about $225,000 for each of its 200 jobs. Because of local government regulations Sanyo pays the highest wages in the U.S. solar industry. (37)
Kyocera, the world’s fourth largest PV producer, is another large TNC with 219 subsidiaries, 59,514 employees and 58 percent of its revenues made outside Japan. They have three solar panel facilities in Japan, and one each in Mexico and the Czech Republic. (38) Sharp is the world’s largest PV producer having starting mass production in 1963. It has both solar cell and silicon production factories in Japan as well as two module facilities. Additional module plants are in the U.S., U.K. and Thailand. Within Japan’s residential market Sharp maintains close collaboration with major housing companies offering complete PV systems. It also is involved in a joint venture in Italy with Enel and STM, building solar farms and cell production. Sharp has 59,400 workers, with over 27,000 employed outside Japan. (39)
China has 50 solar cell and 300 solar module companies, although many closed in the 2008 economic crisis. Still, 30 percent of the world’s solar PVs now come from China, up from 1% in 1999. Included in this mix are joints ventures with Japan, Australia, Canada, Taiwan and the U.S. One of the biggest deals for $5 billion dollars was recently signed with eSolar from California. The Chinese government has played a powerful role in promoting the industry and used the Olympics as a showcase for solar technology. All seven main Olympic stadiums were equipped with PV systems. Additionally, 90 percent of the outside lighting and the entire hot water supply for the Olympic village was powered by solar energy. (40)
In 2009 China became the largest maker of solar panels in the world. Suntech, boasting the lowest cost per watt in the world, has emerged as China’s global leader. CEO Zhengrong Shi is China’s richest person, although he holds Australian citizenship. Suntech is listed on the New York Stock Exchange (NYSE), has five production sites in China, additional facilities in Japan and sale offices worldwide. Suntech has about 13% of the U.S. market for PV panels and hopes to reach 20 % by the end of 2010. By opening a new plant in Arizona, Suntech can label panels “Made in the U.S.A.” and meet requirements for government financed projects. The company first entered the U.S. in 2008 when it bought California based El Solutions with a solar plant in Denver and a customer base that includes Google, Disney and North Face. Suntech also entered into a 50/50 joint venture with MMA Renewable Ventures in Baltimore with plans to finance, develop and operate large solar plants. (41) Further global expansion saw the company investing $100 million with Russia’s Nitol Solar to produce polysilicon in Siberia.
Yingli Solar is China’s second leading PV TNC with six subsidiaries. Its market capitalization is $2.11 billion with more than $447 million raised from its stock floatation on the NYSE. Yingli is active throughout Europe and built solar grids in Germany, Portugal and Spain. In the U.S., Yingli Green Energy America received a $4.5 million tax credit from the Treasury Department to help build manufacturing operations and headquarters in N.Y. and San Francisco. Both N.Y. Mayor Michael Bloomberg and San Francisco Mayor Gavin Newsom welcomed Yingli. Bloomberg stated, “Yingli Green Energy’s East Coast Headquarters will create green jobs…and help our city become more efficient and sustainable.” Newsom points out, “Chinese firms, like Yingli Green Energy, bring the rising strength of Chinese entrepreneurship, their rapidly growing industry expertise, and the ability to take these innovations to mass scale.” Yingli Chairman Lainsheng Miao commented, “Given the vast potential and rapid growth of the U.S. solar market, it is imperative for us to have a strong presence on both coasts of the country.” (42)
These quotes express the integrated global character of the industry, the outlook of the TCC, and why a nationalist strategy for green energy is already out of synch with reality. Chinese solar companies are also active in raising money on U.S. and European capital markets, pulling in $2.5 billion in 2007. As Chinese corporations locate abroad, transnational capital flows into China, creating a two way street integrating global production and investments. As the United Nations sustainable energy report notes, “Chinese firms, in particular, are eager to list overseas.” And this reflects a “continuing shift of emphasis from West to East (in which) Indian and Chinese companies have become increasingly acquisitive outside their domestic boundaries.” (43)
As China’s solar panel production surges they need to produce more polysilicon. More than 20 companies are entering the field with a capacity of up to 100,000 tons, more than double the entire world’s production today. Polysilicon usually sells for $84,000 a ton, but Chinese producers make it for as low as $21,000 per ton to a high of only $54,000. But the toxic waste generated by production has turned into a major problem. Reoccurring toxic problems with green energy producers, although disappointing, should be no surprise. For a number of these corporations green capitalism is about the color of money not the environment. (44)
Thomas Friedman has become a fan of Chinese market Leninism and how quick it can react to changing conditions. Now instead of calling for sole U.S. leadership Friedman hopes that the U.S. and China can work together. But he still maintains his Western point-of-view writing that, “making clean power technologies cheaper…will happen faster and more effectively with the U.S. specializing in energy research and innovation…and China specializing in mass production.” (45) But since the 1960s U.S. federal spending on research has dropped from 2.5% of the GDP to just 0.3 %. Furthermore, Friedman is so stuck on U.S. superiority he must blind himself to China’s intent to do advanced research and its determination to move up the value chain. The governments of Japan, China and India lead the world in clean energy R&D. In terms of corporate R&D, European TNCs BP, Eon, BASF, Shell and several others have made significant investments while only G.E and United Technologies in the U.S. are doing the same. (46)
Turning to Taiwan, it has about 21 companies involved in various stages of solar power research and production, but only Motech ranks in the world’s top ten. Motech has three production facilities in Taiwan and in 2009 bought a G.E. assembly plant scheduled for closure in Delaware. With growing orders from Europe the corporation set-up operations in China and has a distribution network in 50 countries. (47)
Although the U.S. has only 7% of the global PV market its share of the thin film market is 43%. (48) U.S. efforts in R&D have recently increased with Technology Pathway Partnerships encompassing 50 companies, 14 universities, three non-profits and two national laboratories. Although the PV industry argues for U.S. market leadership and technological ownership, most politicians and workers are focused on jobs not the national origin of TNCs. In PV Roadmap, issued by the industry in 2004, they state “U.S. industry’s technology strength in capturing near-term markets will ensure that the United States owns and manufactures the solar products that will serve future generations.” (49) Notice they don’t say where this manufacturing will take place. Their global focus becomes quickly evident in a survey of U.S. solar companies.
The largest U.S. firm, First Solar, is owned by True North Partners, an investment arm of Wal-Mart’s Walton family. Headquartered in Arizona the company has four facilities in Ohio, four in Malaysia and one in Germany. Their operations in Malaysia are ten times the size of their facilities in Ohio. CEO Mike Ahearn says, “First Solar is to a large extent a German success story…we purchase over half of the equipment used in our production lines from German manufacturers and we count suppliers in Eastern Germany as among our most important business partners.” (50)
The next largest company, capitalized at $2 billion, is SunPower. It does R&D in California but production takes place in the Philippines where its two factories employ 3,400 workers. In 2008 SunPower opened another facility in Malaysia, outsourced work to Jiawei Solar in China and contracted with Jabil to produce solar panels in Mexico. (51) Other important firms include British Petroleum’s subsidiary BP Solar, headquartered in Maryland where it has one factory alongside five in Spain, one in Australia and joint ventures in India, Malaysia, Saudi Arabia, South Africa, Thailand and Indonesia; Evergreen Solar has a facility in Massachusetts and two joint production ventures in Germany; Global Solar Energy based in Arizona is a European owned operation with facilities in Germany; and United Solar Systems has one plant in Michigan and a joint venture in China. According to PV Status Report 2008 these were the six main PV producers in the U.S. Beyond their patriotic posturing about rebuilding industrial America, U.S. corporations are clearly imbedded in transnational accumulation and global assembly line production.
The Sierra Club joined a number of U.S. unions to study wages and government subsidies in renewable energy manufacturing plants. In a survey of 14 states providing economic subsidies for 28 separate contracts they found the following:
|U.S. Headquartered Corporations||Foreign Headquartered Corporations|
|Contracts 15||Contracts 13|
|Subsidies $393.630 million||Subsidies $317.250 million|
|Corp. Investment $1.674 Billion||Corp. Investment $1.492 Billion|
|Jobs Created 4883||Jobs Created 6,547|
High Road or Low Road? p. 13.
Evidently state governments have no problem spending U.S. tax dollars on foreign corporations as long as they produce local jobs. And that is how it should be. But it undercuts arguments about the U.S. leading the green revolution while pointing to the transnational character of the renewable energy industry.
Europe has 25% of the global solar market. Although Germany has half the sunlight of San Diego it is the largest market in Europe, accounting for 80% of the EU’s installations and seven of the ten leading producers. This is because Germany, along with Spain, has structured a decentralized market that encourages hundreds of thousands of domestic users to put panels on their
homes. This was accomplished with government mandated “feed-in” laws that make energy utilities buy excess solar power generated by homes with prices set at premium value. About 75 percent of solar energy jobs are locally created through sales, installation and maintenance, with 25 percent of jobs in production and R&D. So although a significant amount of PV systems are imported, much of the added value takes place locally. Overall, about 40,000 people are employed in Germany’s PV industry and another 30,000 in the EU. (52)
Q-Cells is Germany’s leader with sales of $1.763 billion in 2008 and a workforce of over 2,000. It has two main factories, one in East Germany and another in Malaysia. It also maintains an expanding portfolio of investments, joint ventures and subsidiaries including companies in Switzerland, Norway, China and the U.S. Solar World is Germany’s second largest PV corporation with about 1,900 workers, a third of those in the U.S. Sales in 2008 hit $1.26 billion. The company has five locations in Germany, one is Sweden and three in the U.S. Their recently opened Oregon location will be the largest solar cell factory in the U.S. with a projected workforce of 1,000 by 2012. It also has subsidiaries in Germany, Spain, Asia and Africa.
The global pattern in solar energy is similar to that of wind, characterized by transnational corporations who have foreign direct investments and assembly lines wherever a significant market exist. In both solar and wind there is a combination of some of the most powerful and well established TNCs and new corporations more exclusively focused on renewables. While government support is important there is no nationally exclusive policy, tax breaks and stimulus are offered to all active TNCs regardless of origin. The only exception is China, but as these corporations build a solid economic base they too have started to expand abroad. It should be no surprise that a pattern of global accumulation has emerged so early. Transnational capital is hegemonic worldwide so any new industry and significant technology will develop within this framework. This brings forth a number of questions about the viability of green capitalism and alternative paths of development.
Marxists environmentalist (53) make the point that capitalism can never fundamentally solve the environmental crisis because it is inherently a system of unending growth and accumulation. As subjectively appealing this argument is for the left, I believe it’s misplaced in the sense of what capitalism can and cannot do. By environmentally redesigning production, energy, transportation, architecture and agriculture, capitalism can maintain a market for goods that reduces inputs and energy. It may not be able to accomplish this for all commodities, but enough to significantly lessen its abuse of our planet. If accomplished the cataclysmic clash between capitalism and nature may be postponed for a significant amount of time.
But whether or not the capitalist class has the political will to carrying out these transformations is another question. Judging by its failures in Kyoto, Copenhagen and elsewhere capitalism may lose any shred of political legitimacy long before it can act in a qualitatively transformative manner. To be sure, there are socially responsible corporations, scientists and economists who understand the full nature of the challenge ahead. As Kevin Parker, global head of Deutsche Bank Asset Management said, “the cost of inaction is the extinction of the human race. Period.” (54)
But significant restraints exists. With short-term focus among neo-liberal speculators, feeble efforts of neo-Keynesian reformers and sabotage by fossil fuel lobbyists the capitalist system may be unable to respond within the limits of ecological time. Chained to the constraints of its economic dogma, important sectors of the capitalist class are unable to react with long-term planning and the investments needed to build a sustainable economy. A few example tell the story. Out of a total of 2,810 climate change lobbyists in Washington, only 138 support renewable energy. (55) And from the total of $250-$300 billion in global energy subsidies, $200 billion go to fossil fuels and only $16 billion for renewables. (56) It’s clear that neither the neo-liberal nor neo-Keynesian wing of the transnational capitalist class can meet the challenge. What needs to emerge is a new green hegemonic bloc providing political leadership with a dominant culture and ideology. Such a change is possible, but even so green capitalism faces another set of historic problems.
What the transnational capitalist class cannot change is its need for profits and power won through competitive combat. Therefore, movements towards monopolization, economic rationality and the exploitation of labor cannot be resolved within the parameters of green capitalism. There will be a continuing drive to defeat or acquire competing corporations resulting in bankruptcy and unemployment. Constant pressure to lower costs resulting in lower wages, less benefits and sweatshop conditions wherever possible. And the need to externalize costs resulting in greater burdens on governments and citizens. As Marx pointed out, revolutions occur when the relations of production hold back the necessary development of society, not the inability of capitalism to revolutionize technology. Therefore, the contradiction between labor and capital is still key. Green capitalism may very well have the ability to develop the appropriate technology, but not the means to fully realize its social organization.
While a strategic divide exist between speculative finance and productive capital; lines need to be clear within green capitalism as to those with a broad stakeholder strategy and those who follow exploitive practices. Wal-Mart is a good example of a TNC with a number of green initiatives, while maintaining some of the worst labor practices in the world. Another example is G.E., found guilty of violating Chinese laws on maximum hours and overtime pay. Moreover, green jobs are not well paying by the nature of the industry. The average U.S. manufacturing wage is $18.88 an hour pay. But in the renewable energy field wages range between $11 to $22 per hour. As reported in High Road or Low Road the biggest difference is, “where state and local governments attach strong labor standards to economic development subsidies and enforce those standards.” (57)
Corporations should be judged by good wages, sustainable practices and social responsibility, not national origin. The division isn’t U.S. versus foreign corporations. Sanyo has the highest wages in the U.S. green energy industry and Gamesa voluntarily recognized the Steelworkers Union. Consequently, the siren song of nationalism should find no chorus among the working class. When it comes to U.S. transnationals none advocate a national jobs policy. When the Senate prepared to attached Buy-American legislation to green stimulus monies G.E. protested that, “such restrictions would hurt their ability to compete in a global clean-energy market that relies on parts from many countries.” (58)
Consequently, unions and social movements should pressure governments to force TNCs to act fairly, not campaign to give money to nationally headquartered transnational corporations. If any sector should be first in line for subsidies it should be nationally owned small and mid-size innovators who are committed to socially responsible labor policies.
To be effective the left must advocate for high road sustainable development. This means progressives should not limit their call to green capitalism nor paint it in national colors. Instead a transformative strategy should link the fair treatment of labor and nature together, opening the door to possible coalitions between social movements, labor and socially responsible corporations. Even so, a socially responsible corporation like Gamesa was forced to lay-off a large section of its U.S. workforce during the economic crisis in 2009. A reminder that even well meaning companies have to abide by the competitive rules of the market. Under such pressures green capitalism can never be more than an intermediate strategy for left activists to help move society towards sustainability. As for capitalism’s long-term inability to create a system fully in balance with the finite resources of our world as well as its failure to provide a decent living for every human life; that struggle for full environmental and social justice unfolds in step with the green transformation of the global economy.
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- pp. 11, 124.
- Ibid. pp. 11-13.
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