[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]












                 GROWING U.S. TRADE IN GREEN TECHNOLOGY

=======================================================================

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,
                        AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 7, 2009

                               __________

                           Serial No. 111-70


















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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
ANTHONY D. WEINER, New York          PHIL GINGREY, Georgia
JIM MATHESON, Utah                   STEVE SCALISE, Louisiana
G.K. BUTTERFIELD, North Carolina
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA M. CHRISTENSEN, Virgin 
Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                        BOBBY L. RUSH, Illinois
                                  Chairman
JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida
    Vice Chair                            Ranking Member
JOHN SARBANES, Maryland              RALPH M. HALL, Texas
BETTY SUTTON, Ohio                   ED WHITFIELD, Kentucky
FRANK PALLONE, New Jersey            GEORGE RADANOVICH, California
BART GORDON, Tennessee               JOSEPH R. PITTS, Pennsylvania
BART STUPAK, Michigan                MARY BONO MACK, California
GENE GREEN, Texas                    LEE TERRY, Nebraska
CHARLES A. GONZALEZ, Texas           MIKE ROGERS, Michigan
ANTHONY D. WEINER, New York          SUE WILKINS MYRICK, North Carolina
JIM MATHESON, Utah                   MICHAEL C. BURGESS, Texas
G.K. BUTTERFIELD, North Carolina
JOHN BARROW, Georgia
DORIS O. MATSUI, California
KATHY CASTOR, Florida
ZACHARY T. SPACE, Ohio
BRUCE BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex officio)













                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     1
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     2
Hon. John Barrow, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     4
Hon. Steve Scalise, a Representative in Congress from the State 
  of Louisiana, opening statement................................     5
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, prepared statement................................    74
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, prepared statement....................    75
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, prepared statement..............................    78

                               Witnesses

Mary Saunders, Deputy Assistant Secretary for Manufacturing 
  Services, International Trade Administration...................     7
    Prepared statement...........................................    10
    Answers to submitted questions...............................    80
Tim Richards, Managing Director of International Energy Policy, 
  General Electric Company.......................................    18
    Prepared statement...........................................    20
    Answers to submitted questions...............................    95
Lisa Jacobson, President, The Business Council for Sustainable 
  Energy.........................................................    31
    Prepared statement...........................................    34
    Answers to submitted questions...............................   111
Andrea Larson, Associate Professor, Darden Graduate School of 
  Business Administration, University of Virginia................    38
    Prepared statement...........................................    41
    Answers to submitted questions...............................   123
Steven F. Hayward, F.K. Weyerhaeuser Fellow in Law and Economics, 
  American Enterprise Institute..................................    52
    Prepared statement...........................................    55

 
                 GROWING U.S. TRADE IN GREEN TECHNOLOGY

                              ----------                              


                       WEDNESDAY, OCTOBER 7, 2009

              House of Representatives,    
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:07 a.m., in 
Room 2322, Rayburn House Office Building, Hon. Bobby L. Rush 
[chairman of the subcommittee] presiding.
    Present: Representatives Rush, Barrow, Stearns, Sullivan, 
Murphy, Gingrey, Scalise, and Barton [ex officio].
    Staff Present: Michelle Ash, Chief Counsel; Angelle Kwemo, 
Counsel; Will Cusey, Special Assistant; Theresa Cederoth, 
Intern; Aaron Ampour, Fellow; Brian McCullough, Minority Senior 
Professional Staff Member; Will Carty, Minority Professional 
Staff Member; Sam Costello, Minority Legislative Analyst; and 
Shannon Weinberg, Minority Counsel

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. The Subcommittee on Commerce, Trade and Consumer 
Protection will come to order for the purpose of a hearing on 
``Growing U.S. Trade in Green Technology.'' The Chairman will 
recognize himself for 5 minutes for the purposes of an opening 
statement.
    I want to thank the members of the subcommittee for 
participation in this important discussion.
    The world is currently engaged in an important economic and 
political shift. As President Obama said, and I quote, ``In the 
21st century, we know that the future of our economy and 
national security is inextricably linked to one challenge: 
energy.''
    All the developing and industrialized nations are taking 
more steps to address their energy needs and environmental 
challenges. In this race, some are increasing their production 
capacity, others are acting to protect their domestic markets, 
and some whose domestic markets are already maturing are 
opening up new markets for their industry.
    According to the New American Foundation, the U.S. moved 
from a positive trade balance of $14.4 billion in green 
technology in 1997 to a deficit of $8.9 billion in 2008, and 
that included renewable energy products. These swings amount to 
almost a $21-billion swing in a little over 20 years.
    If our green technology exports continue to plummet, then 
the U.S. will miss out on a once-in-a-lifetime opportunity to 
become a global leader in the green energy sector. According to 
the U.S. Department of Energy, the increase in exports in green 
technology could reach $40 billion per year and could create 
more than 750,000 jobs by 2020.
    It is estimated that the green technology industry in the 
U.S. employs 9.1 million U.S. workers. However, only 6 American 
companies are among the top 30 leading companies in the world 
in the green energy sector.
    As we embark on this new adventure--which I would like to 
call the ``Green Crusade''--the future of the U.S. Economy will 
not only depend on environment domestic policy, but will also 
be driven by the global marketplace.
    Now we are presented with the following question: How will 
we reverse our trade balance and compete in this global market? 
How will we serve green jobs by increasing green technology 
exports?
    I strongly encourage my colleagues to stand by their 
commitment to significantly increase our exports, help deploy 
clean technologies to developing countries, and to assist them 
in addressing climate change, spurring economic growth, 
including job opportunities for all American workers.
    What would make us a global leader in today's economic 
environment is to become an export-led economy. Moving to a 
green economy is an opportunity; we must not and we will not 
miss.
    I am deeply honored to welcome our witnesses to today's 
hearing. Considering that you all represent different sectors, 
together I hope that we can look specifically at how to best 
enhance America's competitiveness in the burgeoning 
international market for green technology and therefore create 
more domestic job opportunities for our citizens.
    This hearing is a great opportunity to highlight the 
importance of a strong domestic policy to facilitate U.S. 
penetration into the green economy's international market. 
Also, it is equally important that we include a strong, long-
term export promotion policy to turn our current domestic 
economy into a global leader that will once again be the envy 
of the world.
    Thank you, and I yield back the balance of my time.
    Mr. Rush. It is now my honor to introduce the Ranking 
Member of the subcommittee, Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Thank you, Mr. Chairman. I'm the Ranking 
Member for today in substitution thereof. So I'm pleased to be 
here. And obviously this is a very important hearing, so I want 
to welcome all the witnesses. Thank you for your time.
    It's important, I believe, to have a conversation about the 
opportunities that trade holds for American jobs and American 
ingenuity, particularly in the emerging green technology 
sector.
    We must view trade as an opportunity and not a threat if we 
want to see our exports grow. Free trade has many benefits to 
the global economy, driving economic growth, reducing poverty, 
and raising the standard of living for everyone.
    Domestically and internationally, trade accounts for 
approximately one-third of our gross domestic product, and we 
depend on dynamic open markets to sustain our well-being and, 
of course, our way of life. Today's hearing will focus on ways 
to expand our trade exports in ``green technology.''
    As we discovered at a previous hearing on the marketing of 
green products, defining green, of course, can be difficult, if 
not impossible. Regardless of how we define it, improving the 
opportunities and avenues to increase our exports and goods and 
services is obviously a worthy goal, particularly as we look to 
new businesses and new business models to pick up the slack in 
economic activity that is affecting many of our industries 
today during the current economic downturn.
    The easiest step Congress can take to enact the free trade 
agreement we have already negotiated is to simply enact the 
free trade agreement we have already negotiated, but which has 
not been acted upon. There is no simpler way to open new 
markets for these great innovations and increase our exports 
than to enact a free trade agreement.
    Last year, for example, we ran a $21-billion surplus in 
manufacturing with our free trade agreement partner countries. 
On top of that, we ran a surplus in all our services trade of 
approximately $144 billion. If we lower the barriers to our 
exports, it is clear there are willing buyers in the global 
economy. We must lower those barriers. And the benefits of this 
are not theoretical. High tariffs on our green energy exports 
that are currently prohibited in countries like Colombia would 
instantly disappear with the enactment of the Colombia Free 
Trade Agreement.
    Green technology encompasses a broad array of activities 
ranging from those designed to minimize the impact on the 
environment to those that seek to improve efficiencies in 
production, but many discussions about green technology will 
naturally focus on the energy industry.
    While we vigorously debate whether to institute a national 
tax to limit our consumption of fossil fuels, we cannot expect 
many of the world's developing nations to simply voluntarily 
change their energy policy if it requires them to sacrifice 
their growth. Similarly, American companies and taxpayers 
should not have to shoulder the burden of a policy that, of 
course, limits our economic growth.
    So, today, let's focus this discussion on how to expand 
economies by expanding trade and cooperation. We don't need an 
international agreement like the Kyoto agreement on energy and 
the environment to benefit our trade exports in green 
technology. We have seen that earlier in my opening statement 
here with the 17 countries we have a free trade agreement with.
    We have pioneered technology and services over decades, 
including those that provide efficiency gains in pollution 
reduction. The progress of our energy sector has produced and 
will continue to produce new developments that improve energy 
delivery, such as the SMART grid technology. These improvements 
can be transferred to developing nations through trade. Selling 
our innovations to the world will provide developing nations 
the technology to improve their energy efficiency, promote 
conservation, and limit adverse effects on our global 
environment.
    To achieve these goals, we must make a marketplace 
receptive to our services, and we must incentivize the private 
sector to innovate. Therefore, our trade policy must insist 
that our partners protect intellectual property rights. A 
healthy and innovative market cannot succeed without the 
appropriate rewards that follow true innovation and invention.
    Whether it is the Hollywood studio movies or the latest 
advance in energy efficiency, protection for our innovators' 
intellectual property facilitate bringing successful products 
to the market.
    And finally, Mr. Chairman, as we look at ways to reduce 
barriers to trade and green technology, we also must be mindful 
of the mistakes other countries have made in their efforts to 
develop green industries. Taxpayer-funded subsidies don't 
necessarily work. History has shown the fundamental law of 
economics, government intrusion, and regulation to restore its 
market. If the marketplace cannot support it, why should 
taxpayers?
    Evidence is mounting that government innovation and support 
for particular industries in our country is distorting the 
marketplace at great cost to the taxpayers, without parallel 
benefits. We know from our own experience that the housing 
market was heavily subsidized through incentives, tax credits, 
and easy financing. The resulting boom and bust should be a 
note of extreme caution to all of us that we not distort this 
market through heavy-handed intervention and regulation. 
Congress cannot be in the business of choosing winners and 
losers in a particular industry; rather, we should endeavor to 
ensure every company simply has equal opportunity to succeed or 
to fail.
    I thank the witnesses again. And thank you, Mr. Chairman. I 
yield back.
    Mr. Rush. The Chair thanks the Ranking Member.
    Now the Chair recognizes the gentleman from Georgia, Mr. 
Barrow, for 5 minutes for the purpose of an opening statement.

  OPENING STATEMENT OF HON. JOHN BARROW, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Barrow. I thank the Chairman. I hope I won't take that 
much time. In fact, I think I'm the guy that the witnesses have 
been waiting for, because once I'm through, then you all get to 
talk. I think I am going to be the last person--wait a minute, 
we got a late joiner.
    I want to first apologize for those who aren't here and 
point out that they also participate who can't be personally 
present. We have a caucus going on right now that was not 
previously scheduled, so a great many of the members here are 
absent because they feel pulled in more than one direction. I 
apologize for that. But I just want to add to the concerns that 
have been raised. I want to tell you one of the concerns that I 
have about this whole area.
    We've become aware over time of a number of barriers to 
free and fair trade in the area of green technology. We have 
got tariff barriers in which some countries are putting up 
tariffs on green technologies from our country but that don't 
apply to their manufacturers. We have got quality certification 
safety standards that are not really just about quality control 
and safety, but they are written in such a way to make sure 
that only the home producers' products will qualify. So we have 
got stuff masquerading as quality control, but it's really 
trade protection.
    We have got local content requirements that can do the same 
thing. We have got development programs that look good on the 
outside, but they are essentially the home government of the 
producer basically lending to the developing countries on the 
condition that they buy from their folks and their folks only.
    So we have got a lot of things that look kind of neutral on 
the outside, but they are all about erecting barriers so that 
we don't have access to their markets on the same terms that 
they have access to ours. And what I want to make sure is that 
whatever we do in this area, that we don't have a one-way 
street in green technology the way we have in so many other 
areas.
    There are two things we have got to work with, we have got 
to work with laws and we have got to work with money. What I 
don't like is the idea that other countries can use laws to 
keep us out. And we respond to this by not addressing that 
problem. We end up turning to the taxpayer to try and figure 
out how to jump-start our economy when we're playing on an 
unlevel playing field. And I want to make sure that we're not 
having to resort to the taxpayers to do for us what the laws 
ought to do for us.
    So the question I have for all of you--whether I am here to 
hear it or not, I hope you will address it for the record and 
for the benefit of the members who can't be here--is what are 
institutions that are supposed to promote free and fair trade, 
institutions like the WTO, doing to protect us from this, 
because the sense we get in so many other areas of 
international trade is we are being played for chumps in this 
country, that the free trade agreements we got are one-way 
streets. Other folks are quick to pull the trigger and haul us 
in front of the WTO at the drop of a hat, but if we try and get 
access to their markets, we have got a case of the slows when 
it comes to enforcing our rights to access to other people's 
markets when they are not under any disability at all.
    So think about that. Help us understand what is it about 
the institutions we have got right now that are either working 
well or not working well in order to make sure that, as far as 
the legal framework, our primary responsibility as legislators 
is to make sure that the laws are protecting free and fair 
trade. And if they're not doing that or can't do that, I want 
to know the reason why.
    So thank you all for this opportunity to visit. Mr. 
Chairman, thank you for your leadership in bringing this issue 
before us. I look forward to the testimony and statements of 
our witnesses.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentleman from Louisiana, Mr. 
Scalise, for 5 minutes.

 OPENING STATEMENT OF HON. STEVE SCALISE, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Mr. Scalise. Thank you, Mr. Chairman. And we will see if 
anybody else comes in the room in the next few minutes to 
continue the opening statements, but I do thank the Chairman 
for calling this hearing and for our panelists.
    As we all know, our Nation is facing one of the worst 
economic downturns since the Carter administration. Our 
unemployment rate is approaching 10 percent, and current 
estimates predict that it will continue to rise.
    Given the economic circumstances we are facing, it is 
important that this subcommittee examine ways to enhance 
American competitiveness and create jobs, green or any other 
color. It is also important that we focus on creating jobs, 
given the current energy policies being pushed by this 
administration.
    If enacted, the proposed cap-and-trade energy tax would be 
the most dramatic overhaul of America's energy economy in our 
lifetime, and it would ship millions of American jobs overseas. 
But the administration has continued to stay--it is focusing on 
policies that will create or save jobs. It is good to hear that 
there is an understanding that we need to create or save jobs, 
but if we have this cap-and-trade energy tax, I think most of 
us recognize that we would actually be taking a further 
downturn in our economic situation.
    Even countries that have enacted climate change policies 
have seen negative effects on existing employment. Spain's 
renewable subsidies, for example, created over 50,000 jobs, but 
led to the destruction of 113,000 existing jobs in other 
economic sectors, a loss of 9 permanent jobs for every 1 
permanent job created. In addition, 9 out of 10 of the green 
jobs created in Spain are now gone. That doesn't sound like 
creating or saving jobs to me.
    Mr. Chairman, we must improve American competitiveness and 
enact smart economic policies, not policies that will hurt 
American companies and shift millions of jobs to countries like 
China and India. Our international trade industry is one sector 
that will be crucial to restoring our economy and creating 
jobs.
    Unfortunately, there are currently barriers to trade that 
are hurting our exporters, one of those being the protection of 
intellectual property rights. There are some that believe that 
we should not enforce intellectual property rights and protect 
patents in the renewable energy industry because the 
technologies, they feel, should be free to everyone, and that 
that would allow more renewable energy products to be created. 
Unfortunately, that is a false assumption.
    Without the proper patent protection and proper enforcement 
of intellectual property, companies will not take the necessary 
risks to develop those new technologies. They will have no 
incentive to do so, and therefore, we will see less innovation 
and a loss of jobs due to decreased sales.
    I look forward to hearing from our witnesses on our current 
efforts to remove these trade barriers and to promote export 
activity. Hopefully, we are not wasting our time promoting 
products and technologies that will not be exported due to 
barriers that we are not seeking to remove.
    Trade is a vital issue to my district, and it is a crucial 
part of restoring our economic prosperity. I hope that we leave 
today's hearing with a better understanding of what's being 
done to promote international trade, while ensuring that we 
protect American jobs and spur innovation and competitiveness.
    I thank you and I yield back.
    Mr. Rush. The Chair thanks the gentleman.
    Now it is my distinct honor and pleasure to welcome all of 
our witnesses to this hearing.
    It is the normal practice of this subcommittee that we 
swear in the witnesses. So before I introduce you, I will swear 
you all in. Would you please rise and raise your right hand.
    [Witnesses sworn.]
    Mr. Rush. Thank you, and please take your seat.
    Let the record reflect that the witnesses have all answered 
in the affirmative.
    Now, let me introduce the witnesses on this panel. And 
again, we appreciate you taking time out from your busy 
schedule to be with us. And I also would like to apologize for 
the scarcity of membership. There is a mandatory caucus meeting 
for some that is occurring, so that is the reason why we don't 
have a lot of members here. But they will be able to review the 
record.
    Beginning on my left, Ms. Marie Saunders, she is the Deputy 
Assistant Secretary for Manufacturing Services at the 
International Trade Administration.
    Next to Ms. Saunders is Mr. Tim Richards, who is the 
Managing Director of International Energy Policy for General 
Electric Company.
    Next to Mr. Richards is Lisa Jacobson. Ms. Jacobson is the 
president of the Business Council for Sustainable Energy.
    And seated next to Ms. Jacobson is Ms. Andrea Larson, who 
is an Associate Professor at the Darden Graduate School of 
Business Administration here at the University of Virginia.
    And last but not least, is Mr. Steve Hayward. He is the 
F.K. Weyerhaeuser Fellow in Law and Economics at the American 
Enterprise Institute.

  TESTIMONY OF MARY SAUNDERS, DEPUTY ASSISTANT SECRETARY FOR 
MANUFACTURING SERVICES, INTERNATIONAL TRADE ADMINISTRATION; TIM 
  RICHARDS, MANAGING DIRECTOR OF INTERNATIONAL ENERGY POLICY, 
    GENERAL ELECTRIC COMPANY; LISA JACOBSON, PRESIDENT, THE 
    BUSINESS COUNCIL FOR SUSTAINABLE ENERGY; ANDREA LARSON, 
    ASSOCIATE PROFESSOR, DARDEN GRADUATE SCHOOL OF BUSINESS 
ADMINISTRATION, UNIVERSITY OF VIRGINIA; AND STEVEN F. HAYWARD, 
    F.K. WEYERHAEUSER FELLOW IN LAW AND ECONOMICS, AMERICAN 
                      ENTERPRISE INSTITUTE

    Mr. Rush. I want to thank you again. And we want to 
recognize now Ms. Saunders for 5 minutes of opening statement.

                   TESTIMONY OF MARY SAUNDERS

    Ms. Saunders. Chairman Rush, Ranking Member Stearns, and 
members of the subcommittee, thank you very much for the 
opportunity to testify before you today on the Growing U.S. 
Trade in Green Technology.
    As you are aware, this is an innovative and growing sector 
that has wide-ranging impact both domestically and 
internationally. Secretary Locke is leading the Commerce 
Department in a series of initiatives to further open up 
markets and provide tangible results to workers and businesses 
alike. The International Trade Administration within the 
Department of Commerce is the lead export promotion agency in 
the Federal Government, and ITA is working to expand green 
technology opportunities.
    Early development and commercialization of green 
technologies are critical to the competitiveness of U.S. firms. 
First, these technologies result in greater energy efficiency. 
Second, as the demand for green technologies grows, so do 
export opportunities for U.S. companies. As Chairman Rush 
noted, the Department of Energy estimates there could be up to 
$40 billion a year in increased exports of green technologies, 
generating up to 750,000 green jobs by 2020. However, our 
ability to realize this potential depends on achieving U.S. 
leadership in the field.
    General Electric CEO Jeff Immelt and venture capitalist 
John Doerr noted in an August Washington Post op-ed titled, 
``Falling Behind on Green Tech'' that Amazon, eBay, Google, 
Microsoft, and Yahoo were the leading Internet technology 
companies, and they are all American companies. And yet out of 
the top 30 alternative energy companies in the world, only six 
are American.
    One of Commerce Secretary Locke's priorities is to enable 
new businesses to enter the market and to increase the number 
of U.S. Businesses that produce green products and services, 
with particular emphasis on manufacturing. ITA administers a 
series of programs that are designed to support these goals and 
priorities to enhance the competitiveness of U.S. industries 
and firms. And these include--I'll just name a few--a new green 
tech Web site that aggregates all of our promotion programs in 
a single place, providing easy access for industry; and energy 
efficiency initiatives to assist U.S. manufacturers to improve 
the energy efficiency of their operations as well as to deploy 
energy efficient technologies; and industry events on low-
carbon energy sources and fuels to improve the domestic and 
international competitiveness of U.S. clean energy companies.
    With the world hungry for climate change solutions, the 
United States must act as an incubator for innovative 
technologies. ITA is actively promoting U.S. Technology 
solutions to address government-mandated requirements that 
address the effects of climate change.
    We have an aggressive green technology promotion program 
with over 90 trade events planned worldwide for this year and 
next. As examples, clean technology and alternative energy are 
the central themes of several ITA export promotion initiatives; 
a green building event in Europe; and a solar technology and 
energy efficiency mission to India.
    In November, we are organizing a five-city green build road 
show to Pittsburgh, Denver, San Francisco, San Jose, and 
Phoenix to help U.S. companies take advantage of the $975 
billion annual construction market in Europe. We have also 
ramped up our efforts to promote the commercialization and the 
export of green technologies through increased outreach to 
industry on best practices and priority markets, technical 
assistance, capacity-building events, helping develop trade 
policies that favor cleaner technologies, and addressing those 
market barriers in other countries.
    ITA's sustainable manufacturing initiative encourages U.S. 
companies to use sustainable practices that can make them more 
competitive in the global marketplace, and therefore 
potentially better export candidates. You can't export what you 
don't manufacture.
    And finally, we also have an initiative known as SMART--
Sustainable Manufacturing American Regional Tours--that shows 
small manufacturers how to find success through sustainable 
manufacturing that improves the bottom line.
    President Obama has called for new policies to advance a 
cleaner environment, a stronger response to the challenge of 
climate change, and more sustainable natural resources and 
energy supplies. To reach this goal requires effort by both 
industry and government. Commerce will continue to prioritize 
strengthening U.S. competitiveness in this sector and enhancing 
U.S. capacity to export green technologies.
    In closing, I would like to thank the subcommittee for the 
opportunity to highlight ITA's current efforts. I look forward 
to answering any questions you may have.
    Thank you.
    Mr. Rush. The Chair thanks the witness, Ms. Saunders.
    [The prepared statement of Ms. Saunders follows:]





    
    Mr. Rush. The Chair now recognizes Mr. Tim Richards for 5 
minutes for the purposes of an opening statement.

                   TESTIMONY OF TIM RICHARDS

    Mr. Richards. Thank you very much, Mr. Chairman, and 
members of the subcommittee, for holding this hearing today.
    Mr. Chairman, as you have made very clear, the entire world 
needs cleaner- and lower-emissions technologies, and the United 
States has every opportunity to be a major exporter of these 
products and services.
    The U.S. Energy Information Administration expects that 
total world energy consumption will grow by more than 33 
percent by 2030 and that 92 percent of that growth will occur 
outside of the United States. And much of that future 
investment, if not virtually all of that future investment, is 
going to occur in areas that are more efficient and lower 
emission than we currently see today.
    General Electric, with our energy business based in the 
State of Georgia, is succeeding in selling and creating 
cleaner, more efficient technologies, and we are selling those 
all around the globe. We have invested heavily in our 
ecomagination products, including high-efficiency gas turbines 
which have 200-plus U.S. small- and medium-sized enterprises as 
suppliers, technologies for smart grids, coal gasification, 
nuclear power, solar energy, high-efficiency appliances and 
lighting, efficient aircraft engines, and hybrid locomotives, 
to name some of the products and services, as well as wind 
turbines.
    In this testimony, I would like to address three critical 
themes for promoting U.S. exports: First, the Foundation for 
Successful Clean Energy Exports lies with a robust domestic 
demand. Second, export competitiveness requires a commitment to 
competition both here and abroad. And third, the U.S. 
Government can assist the private sector by organizing itself 
to actively promote competitiveness and exports.
    With regard to the first theme, robust domestic demand for 
renewable and other cleaner technologies is necessary to drive 
innovation, achieve economies of scale, and support a full-
fledged manufacturing base, as Ms. Saunders has made clear. 
This in turn will provide the underpinning for strong exports.
    Critical components of policy in this area are stable 
incentives, such as renewable energy tax credits and the 
development of binding national renewable energy standards such 
as many other countries have adopted, along with cap-and-trade 
legislation that establishes mandates and incentives. 
Unfortunately, U.S. policies currently in place to support 
renewable energy are insufficient to counter the current weak 
investor confidence, and they fall short of those systems 
maintained by other nations.
    The second theme is the need to maintain competitive and 
open markets. Even as they call for projects that enhance 
energy security and reduce emissions, many governments maintain 
barriers to trade in the very goods needed to realize those 
projects. To cite a few examples, most WTO members still impose 
tariffs on wind turbines; in fact, those tariffs average 7.4 
percent. In Brazil, it's 14 percent; in China, 8 percent; in 
India, 7.5 percent. The U.S. also has a tariff on these 
products; it is only 1.3 percent, still worth reducing, but not 
as large as our competitors.
    In addition to these tariff barriers, nontariff barriers 
are a serious issue. A few examples there. China maintains a 
``buy China'' policy on wind turbines, and recently conducted a 
very large procurement in which no foreign-owned company sold 
any wind turbines in China.
    In Canada, Quebec has applied local content requirements 
for wind turbine procurement. Ontario is considering similar 
election.
    And here in the United States, of course, we have the ``buy 
America'' components of the economic stimulus. The protections 
represented by tariff and nontariff barriers reduces U.S. 
Exports and runs counter to the goal of promoting a globally 
competitive industry.
    Open competition calls for a three-pronged solution. First, 
as Congressman Stearns has suggested, now is the time to roll 
back existing trade barriers and prevent the application of new 
barriers, and we can do this through the negotiation of an 
international agreement, eliminating those barriers for all 
environmental goods and services. This is a high-impact, cost-
reduction step governments can take right now.
    Second, the U.S. should lead by example and not include 
``buy America'' provisions in future legislation.
    And third, strong intellectual property rights protection, 
such as has been suggested by several members, is essential to 
create the economic incentives to develop and deploy new 
technologies around the globe.
    The third theme is that there is a positive role for the 
U.S. Government. The Federal Government is in a position to 
facilitate the private sector's growth by undertaking two sets 
of actions. First, export finance enhancements; and second, 
more active and improved coordination of American advocacy, led 
by the Commerce Department, for cleaner energy exports.
    Thank you, Mr. Chairman, and members of the subcommittee, 
for the opportunity to testify before you this morning. The 
U.S. is an innovation leader and has the opportunity to become 
a world-class export leader in this field. And with the proper 
policy framework, we will achieve that distinction. Thank you 
very much.
    Mr. Rush. Thank you very much.
    [The prepared statement of Mr. Richards follows:]





    
    Mr. Rush. Now the Chair recognizes Ms. Jacobson for 5 
minutes for the purposes of opening statement.

                   TESTIMONY OF LISA JACOBSON

    Ms. Jacobson. Thank you, Mr. Chairman, and members of the 
subcommittee. The Council very much appreciates your leadership 
on this very important set of issues.
    The Council is an industry coalition that includes 
businesses and trade associations from around the country 
representing currently available technology options to meet 
pressing energy, national security, economic, and environmental 
challenges. The Council is committed to enactment of domestic 
and international policies designed to deploy clean energy 
technologies, such as renewable energy, energy efficiency, and 
natural gas.
    The House Energy and Commerce Committee is a leader in the 
advancement of comprehensive energy and climate change 
legislation in this Congress with the passage of the American 
Clean Energy and Security Act. This bill includes vital 
provisions to support domestic clean energy manufacturing and 
export promotion.
    In addition to what's included in the American Clean Energy 
and Security Act, I would like to offer additional areas that 
Congress may wish to consider.
    Given the global nature of clean energy markets, especially 
for solar, wind, and efficiency products and components, the 
U.S. has an opportunity to embark on an aggressive and 
sustained strategy to expand domestic manufacturing and U.S. 
exports. The strategy should include six components:
    First, strong U.S. markets. Establishment of strong 
domestic markets will build the foundation for manufacturing 
and exports. Sending the right signals at home through the 
adoption of domestic investment and manufacturing incentives 
coupled with strong, coordinated, and long-term policy 
commitments to clean energy sectors is critical.
    Examples of important initiatives include a national 
renewable electricity standard and a national energy efficiency 
standard, support and expansion of the manufacturing tax 
credit, support for the U.S. Department of Energy Loan Guaranty 
Program. Those are just a few.
    Second, as others have acknowledged, a free and fair trade 
policy that includes liberalization of tariff and nontariff 
trade barriers to clean energy products and services. Sound 
trade policy that recognizes the urgent need for clean energy 
products and technology transfer will help make U.S. products 
more competitive.
    A concern expressed by some clean energy industries is that 
some foreign markets are more restrictive to our own. Tim 
Richards made some very specific points in that regard. I would 
just like to mention again, some nations have domestic content 
requirements, tariffs, and numerous other protections. These 
issues should be considered as part of a clean energy trade 
liberalization effort.
    Third, intellectual property right protection. Again, there 
seems to be consensus on that topic. As our domestic industries 
grow and new technologies are developed, it is critical to 
protect the intellectual property rights of firms that invest 
and offer innovations to the marketplace.
    In support of this, I refer to section 1120(a) of the 
Foreign Relations Authorization Act for fiscal years 2010 and 
2011. This section directs the U.S. Government to prevent 
weakening and fully protect intellectual property rights of 
energy and environmental technologies.
    Fourth, flexible and innovative government financing. U.S. 
firms are best able to compete in foreign markets with 
instruments that leverage public and private capital and focus 
on the creation of enduring markets. While still in its earlier 
phases, the World Bank's Carbon Investment Fund seeks to 
embrace this approach.
    In addition, to better compete with foreign firms, U.S. 
companies need to be able to match the export promotion support 
that other governments provide. U.S. firms often face 
competition from conditioning of overseas development 
assistance as well as tied aid, as was mentioned by Congressman 
Barrow.
    Currently, the Export-Import Bank of the United States has 
a process to assist firms, but this process is burdensome and 
needs to be made more flexible and streamlined.
    Finally, government financing should be made available to 
support capacity building and the regulatory and institutional 
frameworks required to open new markets to clean energy 
products and services.
    Fifth, expansion of clean energy technology promotion 
programs. These should have a strategic high-level focus and 
involve multiple agencies, and they should support small, 
medium and large companies over the full project development 
and funding cycle.
    Government assistance ranges from identification of market 
opportunities and business partners to pre-feasibility and 
feasibility studies, to assistance with financing and 
overcoming other market barriers. The U.S. has existing 
programs in these areas, but would benefit from expanded 
funding, enhanced coordination, and consistent high-level 
engagement. Other nations approach market development for these 
sectors in a highly strategic fashion. We can do that too, we 
just need the high level and sustained support.
    Finally, global agreements on climate change in the 
establishment of a global price on carbon. Clear and long-term 
market signals, such as the establishment of a global price on 
carbon emissions that contribute to global climate change, 
would offer a more competitive environment for U.S. firms going 
into a marketplace which continues to include more regulations 
in other countries to reduce greenhouse gas emissions.
    Finally, I would like to very quickly acknowledge the 
important questions that Congressman Scalise mentioned about 
the impact of clean energy jobs and support for clean energy 
industries. The National Renewable Electricity Laboratory 
recently released, August 28 of this year, a response to a 
study that I believe Congressman Scalise may have been 
referring to. It was called, ``The Study of the Effective 
Employment of Public Aid to Renewable Energy Sources.'' That 
was the name of the report that was released. And NREL has a 
technical response to some of those methodologies, and I think 
it has a slightly different perspective on how support for 
clean energy industries impacts job creation. So I just wanted 
to mention that for the record.
    Mr. Rush. Thank you very much. Have you concluded your----
    Ms. Jacobson. Yes, thank you very much. I appreciate the 
opportunity.
    Mr. Rush. Thank you so much, Ms. Jacobson.
    [The prepared statement of Ms. Jacobson follows:]





    
    Mr. Rush. Dr. Larson, you are recognized for 5 minutes.

                   TESTIMONY OF ANDREA LARSON

    Ms. Larson. Thank you for the opportunity to contribute my 
testimony to the topic today of ``Growing U.S. Trade and Green 
Technology.'' I have three recommendations for the 
subcommittee.
    The first is to support green technology and clean 
commerce. Second, use that support to drive economic recovery, 
urban revitalization, and economic development going forward. 
And third, leverage from the base that's already there, and the 
base can be expanded to support U.S. competitiveness in world 
markets because the United States is now being eclipsed by 
other countries.
    Why should the committee listen to these recommendations? I 
have 35 years of work on economic development, product safety, 
environmental issues, and sustainability topics. The last 25 
years were focused on the private sector entrepreneurship, 
innovation, and corporate strategy. And for the last 15 years, 
I have conducted research and taught MBA students and 
executives exclusively on the topics of the intersection of 
sustainability, innovation, and entrepreneurship. My work is 
about clean commerce.
    To start with, it is worth noting what we mean by clean 
commerce. First and foremost, it is about creating jobs and 
delivering equal or superior product performance to customers 
at comparable prices compared with the existing alternatives. 
It is about cost-cutting, profitability, and competitive 
differentiation for firms. It's about dramatically cutting or 
eliminating pollution and toxic waste. It's not just about 
efficiency, it's about innovation first and foremost.
    It includes green technology, but it's not limited to 
technology; it also includes nontechnical innovation. And 
critically important, it's not just about energy. Economies are 
built on energy and materials. Clean commerce means constant 
progress towards clean energy and benign materials.
    Drawing from my knowledge base, I can tell you the green 
technology and clean commerce arena is the biggest opportunity 
in world markets now and for the foreseeable future. It is the 
new game. Any country that is willing to invest to build 
infrastructure, to innovate, to educate and train, and to 
support private equity and corporations to build capacities to 
meet domestic needs and engage in global markets will win at 
this game.
    I have watched the United States being left behind in this 
game over the last decade. The follower strategy, which is what 
we're doing now, is a legitimate one in the corporate world, 
and perhaps that's what the United States wants to do. 
Certainly, that is the signal it's sending right now. Yet this 
is the growth area that's taking off worldwide.
    The drivers of the changes, the drivers that are creating 
this huge opportunity are not going away. This is not a fad or 
a temporary phenomenon.
    To give you a sense of what's happening in global markets, 
Denmark, Germany, India, Japan, and Spain account for 91 
percent of global exports of wind power in 2008. The world's 12 
major economic stimulus packages propose to invest $180 billion 
in clean tech in the next few years. Spain invests $430 per 
capita compared to the United States $57 per capita in 
renewable energy.
    In 2008, China became the world's largest manufacturer of 
photovoltaic solar panels, the 95 percent of their volume 
exported. China has 60 percent of the total global capacity for 
solar thermal water heaters. And China protects its domestic 
clean energy companies, reserving contracts and restricting 
foreign firms.
    If you were to point to the leaders in stimulating 
innovation in clean commerce and driving clean tech, you would 
look to Japan, Denmark, Spain, Germany, Brazil, China and 
India. The European Union is taking the lead in setting high 
performance standards for clean consumer products, recycling 
and product take-back. So you see leadership there as well.
    Denmark and Spain have allowed individuals and companies to 
sell excess electricity generated back to the grid over a 
decade ago. Germany guaranteed grid access for renewable energy 
producers as far back as 1991. The United States has just begun 
to focus on these issues. States are moving to make changes in 
light of the fact that the Federal Government has not been 
active, but utilities continue to fight these measures.
    The leaders, countries and companies, global companies have 
already committed to significant changes. They have set, and 
many have achieved, greenhouse gas emission reduction targets, 
and new ones are then set. They have set and are meeting energy 
efficiency targets. They have set and are meeting cogeneration 
targets. They have set and are meeting renewable energy source 
targets that reduce their national oil dependency, stabilize 
energy prices, and avoid energy security threats. And that's 
just the energy picture. As I said, there is comparable 
progress being made by other countries on clean materials.
    What we are seeing is national strategies characterized by 
clear and consistent policies, gradual amendments to update 
those policies, protections to control consumer costs, 
mitigation for windfall profits, and simplicity to keep public 
administration costs low and individual, and corporate 
transaction costs minimal.
    Given global trade competition in green tech and clean 
commerce, given that it is fierce--and that's going to only 
increase--and it's being shaped by national strategies to 
support and protect domestic innovation and manufacturing, the 
U.S. is now at a significant competitive disadvantage compared 
to other countries that have already experimented, learned, 
adapted and refined integrated national policies that mobilize 
citizen behavior, corporate investment, education, and 
government purchasing.
    The future of global trade is absolutely clear, and clean 
commerce and green tech are at its core. For emerging and 
developing economies alike, industrial and commercial 
activities that support the provision of clean energy and 
green-chemistry-designed materials bring green buildings, 
sustainable grown foods and clean transportation so that clean 
air, clean water, and healthy soil are preserved by design, 
these actions are increasingly recognized as delivering on 
capitalism's promise of prosperity. And if you are adopting 
these strategies, companies and countries can gain competitive 
advantage.
    The companies and the countries that understand this new 
reality will dominate world trade in critical growth 
industries. The question is: Do we want to lead or follow? 
Thank you.
    Mr. Rush. Thank you very much, Dr. Larson.
    [The prepared statement of Ms. Larson follows:]





    
    Mr. Rush. Mr. Hayward, you are recognized for 5 minutes.

                   TESTIMONY OF STEVE HAYWARD

    Mr. Hayward. Thank you, Chairman Rush, and members of the 
committee.
    Over at the American Enterprise Institute, I spend a lot of 
time with a team of seven or eight people--economists, lawyers, 
a couple of scientists even, some trade experts--puzzling over 
the whole picture of energy that changes like a kaleidoscope 
every day. It is on the one hand exhilarating and also 
daunting. Every day something new comes along and something you 
thought you knew looks differently.
    I think that whatever happens in the next 10 or 15 years, 
it's probably different than what we expect right now. And that 
puts me in the frame of mind of the old comment from either Sam 
Goldwyn or Yoggi Berra--I'm not clear which--who said ``Never 
prophesy, especially about the future.''
    That being said, I think there are two broad issues, some 
of which have already been suggested here today, that need to 
be thought about long and hard. The first is, what are the 
actual dynamics of the present marketplace and how will those 
market dynamics change under a variety of policy regimes, 
either enacted by the industrial world, or the entire world in 
concert? Specifically, schemes--whether cap-and-trade or a tax 
to put a higher price ban for carbon-based energy.
    And then, second, what are some of the cross-cutting 
factors that will come to bear on how trade flows will unfold 
in the real world? I think there are two factors in that 
category. One has already been suggested, but I'll sharpen it a 
little bit further. We face the prospect of incipient trade 
protection and retaliation for things such as border adjustment 
tariffs that are contemplated in the Waxman-Markey bill, but 
also the problem that everyone has mentioned of intellectual 
property rights for energy technology innovations that the 
United States may bring to the marketplace over the next 
several decades.
    Above all, I am always a little troubled about claims for 
new jobs or new businesses that depend vitally upon subsidies 
or mandates from Washington. I think Congress in general is 
well advised to resist schemes in which business profits are 
more dependent on the political marketplace in Washington 
rather than the competitive marketplace outside Washington.
    Now, you can point to a lot of energy innovations and 
efficiency improvements. My favorite is jet aircraft engines, 
which GE and Pratt & Whitney, for example, are leaders in the 
world in developing, they have neither subsidies nor mandates. 
In fact, as I look at the top ten categories of American 
manufacturing exports, starting with civilian aircraft 
equipment, $73 billion in 2007, none of those need subsidies 
and mandates, with the possible exception of financing from the 
Export-Import Bank and so forth.
    At the present time, as has been mentioned, the U.S. runs a 
trade deficit in renewable energy technologies. I think there 
is good reason to expect that to continue and maybe even get 
worse instead of better.
    I have a table in my testimony showing from the latest 
complete figures I could find, from the Department of Energy 
and the Census Bureau from 2003, of a breakout of the 
substantial deficit in our wind power production, our wind 
power exports and imports, because we import an awful lot of 
the raw materials for the wind power that we make and install.
    I notice that the compact fluorescent light bulbs I've been 
buying lately are made in China. I think Congress might well 
ask industry for assurances that, in return for subsidies and 
mandates, expanded production capacity will be located here in 
the United States, and not overseas, that have lower materials 
and labor costs. I am skeptical that such assurances can be 
achieved.
    And beyond that, if we really are going to make, say, 20 
percent of our electricity by wind power by the year 2030-- 
which the Department of Energy says is feasible--I'm skeptical 
that we can clear the litigation alone for the siting of power 
lines to do that. But never mind that; if we are going to do 
that, I wonder if we really are going to be able to expand our 
own manufacturing capacity enough to meet that kind of 
ambiguous target and have additional new capacity to export it 
to overseas markets.
    Meanwhile, I note that roughly 80 percent of the world's 
premium reserves of hydrocarbons are based in less developed 
nations. And even if you got a global carbon price of, say, $28 
a ton--that's the figure now contemplated over in the Senate in 
the Kerry-Boxer bill--hydrocarbon energy will still be cheaper 
than present renewables at scale and other renewable 
technologies that the United States might export.
    And so in other words, if we place a higher price on carbon 
in the developed world and the developing world does not--I 
wouldn't be at all surprised if 10 or 15 years from now, our 
leading energy exports continue to be oil- and gas-drilling 
equipment where we have the best in the world and where we 
still enjoy, by the way, a trade surplus.
    Now, the example of oil and gas technology I think 
illustrates the last point, which is some of the train wrecks 
that are unfolding in the architecture of our policy in these 
matters. A lot of our specialized oil- and gas-drilling 
technology companies guard their intellectual and proprietary 
property very closely, seeking to work through partnerships 
rather than selling licenses or even selling their products 
overseas, because they worry about their intellectual property 
being stolen by the Chinese, for example.
    And yet, as Mr. Scalise pointed out, we are being told that 
the dimensions of the climate crisis means we should 
essentially give away a lot of technology in the interests of 
the world. Well, maybe so, but I note that over $1 billion in 
private capital this year, at least $1 billion is going into 
algae-based biofuels--a long way off, but I know a lot of 
people are very optimistic. It's hard to believe our 
entrepreneurs putting up this much capital are going to want to 
give away that technology.
    In the meantime, a lot of developing nations at their 
opening bid at Copenhagen are saying the developed world should 
provide $100 to $200 billion a year in foreign aid so they can 
buy our technology. Either way, it looks like American 
companies will be asked to sell or give away their products 
cheaply or that American taxpayers will be made to pay for it.
    And finally, I already mentioned the prospect of border 
adjustments or high-carbon imports contemplated in some 
legislation--even if it doesn't run afoul of WTO rules--is 
likely to be, in my mind, counterproductive. And I will stop 
there.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hayward follows:]





    
    Mr. Rush. The Chair thanks all the witnesses. And now the 
Chair will proceed with the questioning segment of this 
hearing, thereby recognizing himself for 5 minutes for the 
purpose of questioning the witnesses.
    As I said in my opening statement earlier, in many 
instances we see that other countries have policies that make 
it difficult for U.S. companies to compete in the global 
market. Emerging markets in countries like Russia, China, 
India, and Brazil have tariff barriers. Countries with the 
largest demand for green technology products, like China, EU 
member states, and Japan, have increased their demand and thus 
their production capacity. Moreover, Denmark and Germany are 
promoting their exports through international development 
programs.
    As a result of this, out of the top 30 countries in solar, 
wind, and advanced batteries, we can count only six American 
companies. It is not a surprise that we have a trade deficit in 
this sector.
    My question is really to each and every one of you. How 
would you characterize our current energy policy, especially as 
it relates to export promotion of green technologies? And as a 
follow-up to that question, obviously in order to return to a 
positive balance in trade, the U.S. needs to have a policy that 
addresses competition on more than one front. And if you had to 
prioritize what needed to be done to increase our exports, what 
would be the first action the Federal Government must 
undertake?
    Those are two questions I would like for answers, beginning 
with Ms. Saunders.
    Ms. Saunders. Thank you very much.
    As to characterizing the U.S. energy policy, I would 
characterize it as evolving. There are quite a few legislative 
proposals on the table as well as regulatory proposals from, 
for example, the Environmental Protection Agency.
    Mr. Rush. Is it slowly evolving or rapidly evolving?
    Ms. Saunders. Evolving. And let me say this: Deployment, 
rapid deployment of clean or green technologies does depend 
heavily, as I think several of the other speakers have noted, 
on the policy environment. That's true here in the United 
States, that's true in foreign countries as well.
    So our export markets will be enhanced insofar as we see a 
policy environment in other countries, such as China, India, 
Brazil, which stimulates clean technologies.
    I think Dr. Larson mentioned that in her opinion some of 
those governments are ahead of the U.S. Government. But the 
major point remains that the policy environment is critical to 
facilitate rapid deployment of clean technologies.
    We are working as effectively as we can at the Department 
of Commerce within the current level of funding and the current 
level of responsibilities. Secretary Locke intends to call the 
first meeting of the Trade Promotion Coordinating Committee 
later this month and meet with the principals. This is the 19 
agencies that have trade promotion responsibilities. And I know 
that a key topic of discussion will be the clean technology 
discussion on how to coordinate the resources of those 19 
agencies, which include the State Department, Department of 
Commerce, the U.S. Trade Representative's Office, and many 
other agencies, to ensure that we're doing all that we can to 
promote exports by U.S. companies.
    Mr. Rush. Thank you.
    Mr. Richards.
    Mr. Richards. Thank you. Mr. Chairman, first of all, in 
terms of the U.S. energy policy, I think the important point is 
that under the status quo, we are actually going to see a 
reduction in the total of installation of wind turbines and 
other renewable products this year, probably about half of what 
was installed last year. So current policy combined with the 
situation with the recession has resulted in a dramatic decline 
from what was being achieved before, and we do need long-term, 
significant policy reform in order to turn that around.
    In terms of prioritizing actions, of all the things that I 
talked about in my remarks, I think the thing that the United 
States could lead on and do quickly that is purely export-
oriented is to negotiate an agreement internationally that 
removes many of the barriers you talked about, remove tariffs 
and remove nontariff measures, and do it for environmental 
goods and services.
    Mr. Rush. Thank you.
    Ms. Jacobson.
    Ms. Jacobson. Yes, thank you.
    I think I'll start by echoing that last comment made by Tim 
Richards. We very much support a streamlined effort to 
liberalize clean energy goods and services. So I hope that that 
will be taken up by the coordinating committee and that it will 
continue to get support in Congress.
    Very briefly, in terms of where things stand with energy 
policy and clean energy export programs, in talking to my 
industries, I think they have seen significant improvement in 
the last several years. There are many more programs that 
support them. They are being more effective, and generally 
speaking, there has been improvement. But compared to what is 
seen in other countries like Germany, a very strategic pinpoint 
effort that is high level and sustained, we are not quite there 
yet. And so we need to take that opportunity to have a 
strategic, coordinated, sustained and high-level effort on 
clean energy export promotion.
    And then finally, again, support for domestic market will 
help our export opportunities and the U.S. players in the 
export industries.
    Thank you.
    Mr. Rush. Yes, Dr. Larson.
    Ms. Larson. I would characterize the energy policy as very 
fragile and new and slow-moving, given that it's coming out of 
a void for a number of years; there really has been no national 
energy policy. So that answers the first question you had.
    The second, What would be the most important thing to try 
to reinforce exports at this stage? There is an enormous amount 
of entrepreneurial activity--venture capital activity, private 
equity investment--going on now in this arena. It has just 
exploded in the last few years. If there are ways to reinforce 
this activity to build domestic capacity for innovation and 
then scalability, and immediately followed by export--which 
will happen if we have the volume--if we have the scalability 
and we have the volume, that's what I would focus on.
    I also think, though, that there is an issue in this 
country with--we lag not just on commerce, but we also lag in 
education and training. And if you don't pay attention to those 
issues in this arena of clean commerce, then we can't develop 
the intellectual--the skills and practical training capacity 
that we need to build our domestic infrastructure. And without 
that, it's very hard to be able to export.
    Mr. Rush. Thank you very much.
    Mr. Hayward.
    Mr. Hayward. I think I will just limit myself to a comment 
about a state of energy policy. I am always kind of in despair 
about the matter, in part just because of all the moving parts 
involved--the Federalism of the country, our balkanized 
electricity grid, State authority regional differences in the 
kind of energy mixes generating electricity, and so forth.
    I liked Ms. Saunders' analogy to evolution. Of course, 
evolution never ends, right? Sometimes it is fast. Sometimes it 
is slow. But one part of evolution--if I could extend that 
metaphor a little bit, of course--is natural selection, whereby 
you kill off the uncompetitive organisms--right?--and the 
weaker genes, so to speak. It is hard to do that in the energy 
field.
    A case in point would be--and I hesitate to do this because 
it would be interpreted as a reproach of this body, but the 
whole ethanol program, which even most environmentalists now 
say is not what we thought it would be when we started. Yet it 
is very hard, for all the usual reasons, to change course on 
that. You know, that is ultimately, maybe, going to be in the 
way of, say, algae biofuels if we make a breakthrough there.
    By the way, one of the moving parts in the ethanol story is 
our very high tariff against imports of Brazilian ethanol, 
which would probably make sense if we really want to focus on 
that goal of reducing oil imports or use of traditional 
petroleum products. I will just limit it to that.
    Mr. Rush. Thank you very much.
    The Chair now recognizes the ranking member, Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman.
    In listening to this hearing, I am starting to believe that 
this is really a question of whether we have an energy policy 
that is based upon economics or a social policy. Perhaps it 
could be a mix of the two. But when you look at our free trade 
agreements with the 17 countries, you see how we actually have 
a surplus.
    As I mentioned in my opening statement, dealing with 
manufacturing, we had a $21 billion surplus; in dealing with 
services, we had $144 billion. So when you have free trade 
agreements, you do not need to necessarily go in and subsidize 
all of these industries, including green technology.
    Ms. Saunders, you mentioned a potential increase of $40 
billion per year in green technology exports. But, obviously, 
that is going to consist of a little bit of subsidizing by 
taxpayers. We had $80 billion set aside in the American 
Recovery and Reinvestment Act for clean energy investment. The 
President has indicated he wants to invest another $150 billion 
into R&D. So my question to you is: This $40 billion you are 
talking about, couldn't we just get this by additional trade 
revenue generated by just passing pending trade agreements that 
we have to get this number that you offered?
    Ms. Saunders. Thank you, Mr. Stearns.
    That number is from the Department of Energy, a projection 
on the value of potential exports and its relationship to jobs 
in that sector.
    To speak to free trade agreements, there are tremendous 
benefits, as you have already illustrated effectively, both in 
terms of markets--tariff-free or low-tariff markets--for 
finished products, but I think equally important is opening up 
markets for intermediate inputs that U.S. manufacturers input 
as part of their supply chain. So it frees up both the ability 
of manufacturers to locate facilities here in the United States 
and import inputs as part of their supply chain as well as the 
markets for their end products; and we have seen a tremendous 
benefit, as you noted, from the 17 current free trade 
agreements.
    The areas where we have the key markets for green 
technologies and also where we have some of the greatest 
challenges are China, India, and Brazil, for example.
    Mr. Stearns. Well, with that in mind, how do U.S. tariffs 
for green technology imports compare to tariff levels imposed 
by other countries for similar products and technologies?
    Ms. Saunders. Generally, U.S. tariffs are lower, on 
average, than tariffs in most other countries.
    As several of the speakers said earlier, we agree it is 
critically important to push for a negotiation of an agreement 
on environmental goods and services. These are new products, 
new tariff lines, which are not necessarily covered under 
existing WTO commitments and perhaps not under existing free 
trade agreements, and so we have called them out as a special 
set. Then, as a subset of environmental goods and services, the 
U.S. and the European Union have both joined to push for 
particularly rapid movement in the areas of clean energy 
technologies because of the demonstrated global need for those 
technologies.
    So we agree it is very important to negotiate environmental 
goods and services agreements to lower both tariff and non-
tariff barriers. We are trying a variety of means to support a 
global agreement, which includes bilateral discussions with key 
trading partners as well as moving issues through the Asia-
Pacific Economic Cooperation, which sometimes provides a good 
venue to tee-up concepts that can then go global.
    Mr. Stearns. Mr. Hayward, I will let you respond to that.
    You might also talk in response, as you talk in your 
testimony, about how domestic mandates on the energy supply can 
actually decrease exports of green technology. You might touch 
on that, too, and expand a bit on it.
    Mr. Hayward. Well, by that, all I mean is something very 
simple, which is, if we really do try and seriously ramp up 
wind, solar, and other renewable energy installations in this 
country on a large scale, as is contemplated in various 
policies, it seems to me we are going to be using all of our 
own production capacity ourselves and, quite possibly, since we 
are going to need a lot of minerals that we are not currently 
producing in large enough quantities in this country we will 
have to import some.
    That is not necessarily a bad thing. I am trying to speak 
narrowly to this question of are we actually going to see 
growth in energy exports across the board or are we actually 
going to end up importing more? As I say, that is not 
necessarily a bad thing, but let's not get too carried away 
with ourselves thinking there is a free lunch here in that if 
we expand our renewable energy production that we are going to 
be selling lots and lots of it overseas, even if we can fight 
through the tariff barrier problems.
    Mr. Stearns. What are the economic downsides when you take 
money out of more productive areas of the economy through taxes 
or increased national debt to less efficient sectors in the 
economy? Is there an economic response to the subsidies and 
what the danger could be?
    Mr. Hayward. Well, that gets back to some classical 
economic ideas that have fallen out of favor. You know, the 
classical old idea was the broken window fallacy. You know, if 
somebody throws a rock through a storekeeper's window, the 
glassmaker gets a job. On the other hand, the storekeeper is 
not spending that capital on something else that might be net 
more productive across an economy.
    So lots of things are changing fast, and cost curves are 
shifting very quickly in solar and wind and the other things we 
are talking about--you know, maybe hydrogen in 15 years. Who 
knows? But, at the present time, most renewable technologies we 
are trying to develop at scale are quite a bit more expensive.
    It also will mean, if we are serious about closing, you 
know, 100 coal-powered plants in the next 20 or 30 years, we 
will be retiring assets before their useful life is up, so we 
will be diverting some capital in the classic sense of 
opportunity costs, and that will have some effect on the 
economy elsewhere.
    Now what I would like to say is, you know, we are a rich 
country, or we used to be until a year ago, and we will be 
again, and, you know, we can afford a lot of these things in 
the service of we are wanting to change our greenhouse gas 
emissions and so forth. But unless the entire world follows 
along with us, it is going to make a lot less difference to the 
bottom line on climate change in 30, 40 years.
    Mr. Stearns. Mr. Chairman, I will just close.
    I just want each of the panelists to answer yes or no. Do 
you support the three pending free trade agreements, and do you 
support pursuing new free trade agreements? Just down the line. 
Yes or no?
    Ms. Saunders. Yes.
    Mr. Stearns. Mr. Richards.
    Mr. Richards. Yes to both questions.
    Ms. Jacobson. Yes.
    Ms. Larson. I do not know enough to comment.
    Mr. Hayward. Yes.
    Mr. Stearns. OK. Thank you, Mr. Chairman.
    Mr. Rush. The Chair now recognizes the gentleman from 
Georgia, Mr. Barrow, for 2 minutes for questioning.
    Mr. Barrow. Thank you, Mr. Chairman.
    Mr. Hayward, the broken window theory has different 
meanings in different contexts. I understand the meaning that 
has been immortalized in the motion picture The Fifth Element. 
Some job is in it for somebody. If you break something, there 
is always somebody who is going to get something good out of 
this.
    In the law enforcement context, it has an entirely 
different notion. You take care of the little things, and the 
big things will take care of themselves.
    If you have got crime running rampant in the streets, if 
you enforce the zoning laws and the building maintenance laws--
little things you can get a handle on, you know, get rid of 
graffiti--you will find the bigger problems sort of take care 
of themselves because of the ripple effect. You have the 
miracle of compound interest in terms of folks' involvement in 
their communities, is sort of one way of looking it.
    Also, about the little thing about a level playing field. 
Because the sense I get is the WTO ain't even trying to address 
free trade in environmental goods and services.
    So if I get the sense of what the witnesses are telling us 
today, it is not that the whole approach of free trade has been 
tried and found wanting so much as it has not been tried at all 
in the first place. Is that the sense of things?
    Mr. Hayward. I would not--I actually was, when you made 
your opening statement----
    Mr. Barrow. No, it doesn't have to be you.
    Is anybody willing to say that the WTO is actually focused 
on this like it is on agriculture and other sectors? Is anybody 
willing to say that?
    Mr. Hayward. No. I think you are generally right about 
that.
    Mr. Barrow. OK. Well, that is a concern I have got. Because 
we have so much experience in the areas where the WTO is 
active, and that is not very satisfactory for us. If, for 
example, in Denmark, they are using laws that are ostensibly 
for safety standards but essentially what they are doing is 
protecting the domestic industry, at the same time, they are 
using the tax expenditure policy to essentially raise money 
from their taxpayers to lend to customers in other countries to 
buy stuff only on the condition that it is made in their 
country. They are using both laws and the public fisc to 
promote their industries for those folks who want us to engage 
in advocacy and to use the tax expenditure policy of this 
country to promote industry here.
    I want to point out that we ain't going to be doing that on 
a level playing field if our laws are going to be laying us 
wide open to unfair competition; and we are asking the 
taxpayers in America, basically, to compete with both the 
lawmakers and the taxpayers in other countries. That ain't a 
level playing field.
    Can anybody help us understand how free trade in this area 
can work in some way that is not a one-way street?
    Mr. Richards. Mr. Barrow, I think that you are correct. The 
WTO, for the most part historically has not addressed energy 
trade, by and large. However, there is growing recognition in 
the WTO and among member states of the WTO that this is an 
important area to move into.
    The WTO did have its first--the first that I am aware of--
conference focused on different types of cleaner energy 
technologies and what needs to be done to remove barriers to 
those technologies, and there will be another conference that 
is cosponsored by the WTO in a couple of weeks in Geneva.
    There were also some statements in the press, both by the 
European Union and by the U.S. Trade Representative, last week 
that they are seriously looking at this idea of an 
environmental goods and services agreement; and they talked 
about its being done probably within the confines of the WTO to 
make it binding.
    The value of this, Mr. Barrow, would be that it allows the 
United States, which has, as Ms. Saunders said, relatively low 
tariffs, to move to a level playing field with our competitors 
if we get them to sign onto this sort of agreement.
    Mr. Barrow. Thank you, Mr. Chairman.
    I will only note that there will only be a level playing 
field if the rules are going to be enforced fairly. What I am 
concerned about is we have very little confidence, in the way 
things have been run so far, to think that the rules that have 
supposedly opened up their markets on the same terms that ours 
will be open to them will be played on a level playing field. 
That is just a concern I have got.
    Thank you, Mr. Chairman.
    Mr. Rush. The Chair recognizes Mr. Scalise for 2 minutes.
    Mr. Scalise. Thank you, Mr. Chairman.
    I know that in a lot of these new technologies we are 
talking about wind turbines and some of the different hybrids 
with the battery technology requirements. The actual components 
to build those--and I will talk specifically about some of the 
metals and the rare elements--copper, zinc and others--that 
exist in the United States but really are not accessible 
because of Federal policies, and so we end up importing a lot 
of those from places like China.
    As we try to look at the different effects of green jobs 
and the increased requirement to bring in more of these 
products to make some of these different things--Ms. Saunders, 
if you could start--how does our country address that when we 
actually have policies that block us from making access to a 
lot of our own natural resources here?
    Ms. Saunders. Well, I can address what we are doing in the 
international trade space. We are well aware of the critical 
resource issues that are facing U.S. companies and tariffs and 
other, you know, materials, raw materials; and we are well 
aware that China has been buying up lots of mining rights in 
various parts of the world in those areas. You may know that, 
recently, China has proposed to initiate a limit, or a 
restriction, on exports of those critical materials; and they 
have yet backed off from that policy under a lot of pressure 
from the United States Government and other governments.
    So we are well aware it is a critical issue. We work 
closely with both U.S. companies that need access to those 
materials as well as with the Department of Defense and its 
critical national stockpile of critical materials.
    Mr. Scalise. So are you all going to be doing anything in 
policy to open up more of the United States' natural resources 
so that we do not have that dependence on countries like China 
to produce?
    Ms. Saunders. Well, that is something I will take back to 
the Department. That is not within the purview of the 
International Trade Administration, but I will take that back.
    Mr. Scalise. I understand, but it still impedes our 
country's ability to truly export if we have to import in order 
to make the products that we want to export.
    Mr. Richards, your company, when you are making decisions 
on where to locate manufacturing facilities, how much of a 
factor is the geographical relationship and the ability to 
access the natural resources that you need to make those 
products? How much of that is a factor in where you locate the 
manufacturing facilities?
    Mr. Richards. In our particular area, if you think of wind 
turbines or solar panels or efficient gas turbines, those rare 
Earth minerals are not actually a major component of our 
decision making in where to locate. More important are 
questions of transportation costs, what the investment 
environment is like in any given location, what the market is 
like in that location, but I would not say that the rare Earth 
minerals has been a big issue for us.
    Mr. Scalise. Mr. Hayward, I know you have talked about some 
of these issues.
    Mr. Hayward. Well, I mean, one example that comes to mind 
is battery technology. If someone or some company can come 
along and make a battery technology that is comparable in its 
energy potency to a gasoline engine--gasoline storage in a gas 
tank--it changes everything. That would be the game changer we 
would need that would be equivalent to the green revolution in 
agriculture that Norman Borlaug brought us 40 years ago.
    If we use some variation of existing lithium ion technology 
that, right now, we use in all our laptops, well, we would need 
a whole lot of lithium. We do not have a lot of it here. The 
leading supplier is Bolivia. We talk about how we do not like 
to buy resources from countries that do not like us, which 
sounds sensible to me; and this week Bolivia does not like us. 
So we are trading one kind of problem for another, potentially.
    So yes. I mean, once again, it is not entirely a black-and-
white situation; and I always like to say--and will sort of 
abstract slightly--that the idea of energy independence 
interpreted strictly as a four-square production of all our 
energy inside the borders of the U.S. is really a nonsensical 
idea. We should be looking for energy resilience and energy 
diversity, so it might include importing a lot of lithium from 
Bolivia, but it will mean that our trade flows are going to 
continue to be kind of murky.
    Mr. Scalise. I yield back. Thank you, Mr. Chairman.
    Mr. Rush. The Chair now recognizes Mr. Murphy for 2 
minutes.
    Mr. Murphy. Thank you, Mr. Chairman.
    I first want to start by pointing out that one of the 
things that happens is we recognize wind power is wanted, but 
Congress does a lot of things to prevent them from being built 
in their districts. That also means we need power lines to send 
electricity from a source like that to other places, too, but 
Members of Congress oftentimes block building grids in their 
districts.
    We know that nuclear energy is a valuable, clean source, 
but Members oftentimes say, let's not store that nuclear fuel, 
and let's not recycle it.
    We recognize natural gas is a valuable, clean resource, but 
Members of Congress block building facilities in their 
districts and block taking down bridges so ships can move 
through there.
    Of course, it was Members of Congress who would oftentimes 
block free trade agreements to deal with the tariffs, so I do 
not have a lot of optimism here that Congress is working 
smoothly for these things. But I have a couple of questions 
here on a couple of specific issues.
    Mr. Richards, in some of your testimony here, you talk 
about the number of jobs being created through wind energy. I 
think you list about 4,000 overall that are growing from here. 
Does that sound about right as to what growth GE is seeing?
    Mr. Richards. That is correct. That is jobs within GE and 
our suppliers here.
    Mr. Murphy. I might note for the record that is about the 
same number of jobs it takes to build and operate one coal-
fired power plant.
    I also noticed that you have worked very hard at sending 
jobs over to China for bulbs--light bulbs--and are working to 
send some locomotive manufacturing jobs over to China as well. 
Can you tell me how that helps our exports, please?
    Mr. Richards. Congressman, we invest in many countries all 
around the world, and we are investing heavily in the United 
States.
    Mr. Murphy. Well, then what percentage of your windmills 
are actually manufactured in the United States?
    Mr. Richards. I cannot give you the exact figure, but it is 
well over 50 percent.
    Mr. Murphy. So just under 50 percent then is manufactured 
in other places around the world?
    Mr. Richards. That is correct. We have manufacturing in the 
European Union--in Germany.
    Mr. Murphy. Does the place in the European Union also 
manufacture windmills and solar panels? I am just wondering, in 
other markets, how are we creating these that will actually 
sell to the markets if other countries are building them as 
well and we have tariffs and other things in line that block 
our products from being sold. So how are we going to compete in 
other countries?
    Mr. Richards. Very frequently we will export the highest 
technology components of a product, even if we are doing final 
assembly in another country. For instance, with high-efficiency 
gas turbines, that is generally what we do; and we manufacture 
those here in the United States.
    The same is true with locomotives. When we have the final 
assembly of locomotives in another country, usually we are 
making the highest technology component of that in Grove City, 
Pennsylvania, and in Erie, Pennsylvania, for export.
    So it truly is a global economy, and we have to be able to 
have local manufacturing in some cases, but that does not mean 
that it precludes U.S. exports. Often that facilitates U.S. 
exports.
    Mr. Murphy. So, with regard to some of those things then, 
when you find that you can make them less expensively in other 
countries, that is obviously a business decision that GE makes. 
So what assurance do we have in opening up these markets, if 
that is where the growth is going to be in some of these areas, 
that you are not just going to move that manufacturing over to 
other countries? How is that helping U.S. exports? Because you 
have done it in the past. How is that going to help?
    Mr. Richards. Congressman, we have maintained U.S. 
manufacturing in virtually every one of the areas that I spoke 
of with our ecomagination projects. We have a commitment to 
growing our manufacturing presence in the United States, and we 
have a desire to be----
    Mr. Murphy. Now, do you plan on making any compact 
fluorescent bulbs in the United States?
    Mr. Richards. Congressman, I am afraid I do not have that 
information. I would have to----
    Mr. Murphy. Well, that is an important green source of 
jobs, and that does not help us if you export those.
    That is all I have, Mr. Chairman.
    Mr. Rush. The Chair now recognizes the gentleman from 
Georgia for 2 minutes.
    Dr. Gingrey. Mr. Chairman, thank you.
    Mr. Hayward, in your testimony, you briefly and succinctly 
indicated that American renewable energy produces--rightly 
point to existing trade barriers and tariffs as an obstacle to 
expanded trade in the energy technology. In my opinion, one of 
the easiest, most beneficial ways to assist these companies is 
to help remove tariffs by enacting free trade agreements. 
Specifically, the United States has already signed three free 
trade agreements that have yet to be fully implemented by the 
Democratic majority.
    The first of these is the Colombia Free Trade Agreement. 
Over 10,000 companies are already exporting to Colombia; and, 
of these companies, 85 percent are small- to medium-sized 
companies. In 2007, the United States exported close to $8.6 
billion in goods to Colombia. By enacting this FTA, we will 
greatly benefit, particularly in the agricultural industry, by 
eliminating high tariffs on items that could inevitably be used 
in renewable energy production. Since the signing of the FTA 
with no congressional action, United States' exports have faced 
an estimated $1.1 billion in tariffs in Colombia, while 91 
percent of imports from that country have entered the United 
States duty free.
    In addition to the Colombia FTA, this Congress has still 
not acted on the Panama Trade Promotion Agreement; and it was 
signed back in 2007. In that year, the United States employed a 
large trade surplus of $3.3 billion with the Central American 
country. Under this agreement, 88 percent of American 
commercial product would be allowed to enter duty free 
immediately; and this could certainly benefit American 
manufacturers during these most difficult economic times.
    Lastly, the United States has signed but not enacted a free 
trade agreement with South Korea. The United States 
International Trade Commission estimates that the reduction of 
Korean tariffs and tariff rate quotas on goods alone would add 
between $10 and $12 billion to our annual GDP and around $10 
billion to annual merchandise exports to Korea. Enacting this 
free trade agreement would have a direct impact on jobs growth 
in the United States by opening additional markets for export.
    The U.S. Chamber of Commerce recently released a study on 
the price that inaction on these FTAs has cost American 
business and exports. This study, entitled ``Trade Action or 
Inaction: The Cost for American Workers and Companies,'' 
indicates that a failure to implement FTAs with South Korea and 
Colombia alone will lead to a decline of $40.2 billion in U.S. 
exports of goods and services. A failure to act would also 
leave $44.8 billion in missed opportunity of U.S. output, while 
also missing the chance to create 400,000 jobs for hardworking 
families right here at home.
    Mr. Hayward, I have outlined the benefits of these free 
trade agreements and the cost of inaction for the purpose of 
explaining how we can take immediate and decisive steps to help 
bolster exports, including in the arena of green technology, by 
facilitating free and fair trade. Although you only briefly 
mentioned the trade barriers that exist due to tariffs, I would 
like to get your thoughts on this matter.
    Mr. Hayward. Well, I guess I would say that we are in 
heated agreement.
    I would make two comments of a general nature.
    One is, you know, of all things economists argue about, the 
thing they argue about the least is free trade. I mean, there 
is almost no daylight between Milton Friedman and Paul Krugman, 
which is really amazing when you think about it. I mean, there 
is probably no greater economic issue for which there is 
greater consensus, I would say, among probably 95 percent of 
professional economists than on free trade.
    But as a political matter, it seems to me, the case for 
ratifying those treaties is overwhelming, especially in the 
case of Colombia, which is a country friendly to us, under 
tremendous political pressure at the moment, vulnerable to a 
civil war. It would be much better to assist them with free 
trade and expanded trade than it would be to contemplate what 
the alternatives might be if that country falls apart.
    Panama and South Korea are under some pressures as well, 
also, but certainly, in the case of Colombia, the political 
reasons to do it seem to me overwhelming.
    Dr. Gingrey. Mr. Chairman, thank you. I took a long time 
framing that question. I thought it was important.
    I appreciate, Mr. Hayward, your direct and succinct answer. 
I agree with you 100 percent.
    Mr. Chairman, I will yield back.
    Mr. Rush. The Chair thanks the gentleman.
    We will engage in a second round of questioning. We will 
limit the questioning to 2 minutes, and I would ask the 
witnesses to be as succinct as possible in their answers.
    The Chair recognizes himself for 2 minutes.
    Recently, we have seen Uni-Solar Ovonics, a Michigan-based 
company, which produces thin film solar, partnered with 
Montcalm Community College to provide training for current and 
future employees. If each of you could answer this question: I 
am curious to know what education level will be required for 
individuals to adequately perform the jobs created from the 
expansion of the green technology market both at home and 
abroad. Secondly, are certain skills that are attained from 
other industries easily transferable?
    Would each one of you take a stab at those two questions?
    Ms. Saunders. This is not my area of expertise.
    What I have heard from companies and from State economic 
development administrations and community colleges in my 
travels around the country is that there will be a variety of 
jobs from the technician level to the undergraduate degree in 
engineering to a master's degree in engineering. There will be 
a variety of levels, but the basic level will be the technician 
level.
    Then, in some areas, job retraining is not terribly 
difficult. I really do point to and congratulate the various 
State programs that have gotten out in front of this issue. As 
I said, the Economic Development Administration is working with 
universities and working with community colleges to provide 
training programs, working with companies. I am sure GE has 
programs like that. These are critical skill development 
opportunities that we need to make more broadly available.
    Mr. Rush. Are there any model States?
    Ms. Saunders. Well, I will not call it a ``model State,'' 
but I was just mostly recently in Toledo, Ohio, on an energy 
efficiency road show. Toledo has done--that area has done an 
excellent job of reinventing itself as a leader in solar 
technology, and it was impressive to see the university and the 
local community colleges and the manufacturing extension 
partnership and all of the resources working together, but that 
is just because it was a recent trip.
    Mr. Rush. Thank you.
    Mr. Richards.
    Mr. Richards. Thank you, Mr. Chairman.
    I would agree with the points made by Ms. Saunders and 
would just add one personal note about the point that many of 
the skills, in fact, are transferable.
    I was with a group that was recruiting at the U.S. Naval 
Station in Norfolk, and we were recruiting for wind service 
technicians there. Because we found that many of the naval 
personnel who had worked in technical jobs in the Navy actually 
had the skills that we needed to perform maintenance and 
service on wind turbines. So I think that, in fact, there are, 
obviously, a large subset of skills that are transferable and 
others that require further community college and other worker 
training.
    Mr. Rush. Ms. Jacobson.
    Ms. Jacobson. I concur largely. I can just add another 
industry layer. I often speak with our solar industry, and they 
talk specifically about how they work with the roofers. You 
know, that, for them, is a very transferable skill set, a very 
good group of high-quality jobs, and they are very happy to 
work with them.
    But what I hear universally, because I represent efficiency 
both on the supply and demand side, a wide range of renewable 
energy technologies and natural gas, is that we have a 
tremendous need for this workforce right now, and they have a 
very difficult time finding qualified workers across the whole 
supply chain and across the whole spectrum of job 
opportunities.
    So thank you.
    Mr. Rush. Thank you.
    Dr. Larson.
    Ms. Larson. I would just like to emphasize that one of the 
ways that we develop our domestic capacities in order to excel 
in global markets is to have constant feedback into the process 
of innovation so that your technologies and the ability of 
people to work with the application of those technologies have 
to be continuously upgraded. This is an area of innovation that 
most people overlook. It is imperative that we have people who 
are trained in the communities to be able to install new 
technologies, work with them, provide feedback--sensible 
feedback--to manufacturers to continue to refine and upgrade 
and innovate. Currently, we do not really have that capacity at 
the local level.
    A lot of the skills definitely are transferable--there is 
no doubt about that--and the stimulus package has moved money 
into my community in Charlottesville, Virginia; and some of 
that money will be used to train people to be able to work on 
improving the community's efficiency--this is in neighborhoods 
and residential and businesses--as well as the installation of 
clean-tech equipment. There is a huge opportunity there.
    You know, I do not really understand why one member has 
referred to some of these ideas as social versus economic. You 
know, having a really skilled workforce around the introduction 
and use and in the continued improvement of these technologies 
is an economic decision, and that is a really critical piece of 
this picture that has to be addressed.
    Mr. Rush. Thank you.
    Mr. Hayward.
    Mr. Hayward. I do not have an opinion on this particular 
question, Mr. Chairman. Thanks.
    Mr. Rush. All right. Thank you so much.
    The Chair recognizes Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Hayward, Mr. Barrow was here because the argument is 
made that if we subsidize the greening technology industry--so 
you give government subsidies to these people. Then they go out 
and compete with similarly foreign companies that are also 
subsidized. Then the competition is based pretty much on who 
gets the most from the government. So, in effect, taxpayers are 
supporting the competition for industry to export their 
products.
    If we develop an export industry that is almost entirely 
dependent upon these Federal subsidies, obviously, the 
taxpayers are going to be affected; and I do not know if that 
is a sustainable model when there is probably an alternative 
model, which is to allow the free trade and perhaps to give 
loans to these companies but not to subsidize them.
    So you might just touch on the fact, of the heavily 
subsidized industries in America, how do we compete--like in 
Mr. Barrow's argument, if other governments are subsidizing 
their industry and we do not subsidize ours and yet we have 
free trade, don't the other governments then, by providing 
subsidies to their companies, gain an advantage? So this goes 
to the fundamental aspect of how free markets work and why 
competition and not subsidizing sometimes gets more innovation.
    Mr. Hayward. Yes. I think in a lot of cases what you will 
find is, in technologies that are comparable--and this is an 
important point to come back to in a moment--it ends up being a 
zero sum game. I am sorry Mr. Barrow left, because I have been 
puzzling over his opening statement, which I have a lot of 
sympathy for, and I think a key distinction needs to be kept in 
mind here.
    When you are talking about roughly comparable products--you 
know, windmills of X efficiency versus X plus 5 percent 
efficiency, that ours might be better--and maybe we have a 10 
percent better price--then some of those tariff barriers and 
local content requirements will tip the balance unfairly in 
favor of a foreign country's own producers.
    On the other hand, there are a lot of areas where we have 
massive competitive advantage. I am thinking, by the way, again 
of our leading manufactured export from 2 years ago, which was 
aircraft equipment. We beat the world at most areas of that, 
especially jet engines. And we have seen the case of where, I 
think, we did win--I did not follow this intimately, but I 
think we did win the WTO complaint against subsidies for Airbus 
production. Although I notice Airbus--most of them use our 
engines because ours are so much better than theirs that those 
marginal preferences--in other words, the preferences you try 
and give either through a 10 percent tariff or for a local 
content requirement, we simply blow right through those because 
ours are so much better.
    So the challenge for industry is please subsidize us for 
solar or wind power or other technologies that other countries 
can make almost as well as we can and, therefore, we are 
fighting something of a zero sum game, which is: Can our 
industries make those technologies that are so much better? It 
is true of our oil and gas equipment, which is superior in many 
respects. Drilling equipment is superior in many respects. That 
all those kinds of attempts that these other countries use to 
prefer their own producers, you simply blow right through them 
because ours are better. That is the challenge, it seems to me, 
for industry.
    I think I will just stop and leave it at that. It seems to 
me that is a distinction that needs to be laid out and that 
people need to get their hands around.
    Mr. Stearns. Just another question for Ms. Saunders. You 
state the Department of Energy estimates green technology will 
export up to 750,000 jobs by 2020. How many jobs will be lost 
due to green technology displacing them, particularly if we 
subsidize green technology?
    Ms. Saunders. I do not have the answer to that question. I 
can go back and try to see if I have an answer to that 
question.
    Just a brief comment on subsidization, which I agree with 
you is an important issue to consider: Our import 
administration, which is a component of the International Trade 
Administration, is very active in enforcing the existing trade 
laws which address anti-dumping and countervailing duties for 
goods that are coming into the United States that are either 
subsidized in foreign countries or are being produced at less 
than production cost, and we have quite a few cases ongoing 
right now.
    Mr. Stearns. Thank you, Mr. Chairman.
    I would ask Ms. Saunders to just respond to my question in 
writing, if she could--basically, you know, of the cost risk 
analysis.
    Mr. Rush. The Chair thanks you.
    The Chair recognizes the gentleman from Pennsylvania, Mr. 
Murphy, for 2 minutes.
    Mr. Murphy. Thank you, Mr. Chairman.
    I want to continue to follow up on some of my questions 
here and follow up on Mr. Stearns' question as well.
    Continuing on with General Electric, how many jobs have we 
lost from closing our light bulb plants in the U.S.?
    Mr. Richards. Congressman, I do not have those figures with 
me, but we would be----
    Mr. Murphy. How many jobs has China gotten from your 
opening up factories in China to make light bulbs?
    Mr. Richards. Again, Congressman, I do not have any 
information with me at this time.
    Mr. Murphy. Ms. Saunders, just to follow up on Congressman 
Stearns' question, too, about the displacement of jobs, I am 
assuming for all of you, if you went to the doctor and the 
doctor said, ``I want you to take some medicine,'' one thing 
you would want to know is what are the side effects.
    If the doctor says, ``I am clueless. I never studied the 
side effects of medicine. I will just tell you what it is going 
to do to you,'' you would think he is kook, and you would leave 
the room, right?
    So I would like to know what are the side effects of this. 
Because we have to balance all this out because we want to make 
sure, as Congress, we are doing this in a way that we are not 
losing jobs. We want to promote these technologies in solar and 
wind and all of these other things and make sure we have this 
but to not do this in a way that actually hurts our job 
development.
    So does anybody have an answer to that question? Then you 
should not be here. Not a single one of you should come 
unprepared with that, because that is important to us. I think 
that is extremely important, because we have got to know how we 
balance this out.
    So let me ask this then, too: As we go through these issues 
then on--well, I see I am out of time here. You are going to 
keep this at 2 minutes, but you get my point. Please come 
prepared and give us an answer.
    Thank you.
    Mr. Rush. I think that the gentleman made a strong point. 
However, I think that the witnesses have really adequately 
addressed the questions of most of the members of the 
subcommittee. I do not want the witnesses to think that their 
time and their participation was for not.
    I think you provided us with some really important 
information that we can proceed with, and you have been a real 
help to the work of this subcommittee, and I do not want you to 
get the impression that we do not really appreciate your time 
and your comments and your input. We want to thank you for 
participating with us here and for taking the time out from 
your busy schedules.
    We want to just inform the members of the subcommittee that 
the record will be open for 7 days and that, if there are any 
questions that the members of the subcommittee would like to 
address to the witnesses in writing, you have 7 days to prepare 
those questions. We would ask that the witnesses take an 
additional 7 days to get back to us with answers to the 
questions. I want to thank you again so very much.
    The subcommittee is now adjourned.
    [Whereupon, at 11:45 a.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]



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