Ordinary Americans and policymakers in Washington have plenty to worry about these days: unemployment, housing, deficits and debt, not to mention terrorism, wars and myriad foreign crises.
But there’s another looming issue that actually trumps those. It’s China’s push — while the U.S. sits on the sidelines — to amass the lion’s share of natural resources such as copper, silver and rare-earth elements, which are essential to renewable energies and are becoming scarcer and more expensive.
Prices of these and many other key industrial materials have been in steady uptrends for a decade as supplies have tightened. They’ve remained high even despite the dreadful U.S. economy. Emerging economies, particularly China — which has become a voracious consumer of industrial materials — are behind the stunning growth in demand. One statistic: in 2011, Brent oil, the chief marker for oil, has been above $100 a barrel a record number of days; its average price for the year is likely to be an all-time high. And with China’s growth continuing, there’s no end in sight.
High and rising resource prices largely account for the decline in the American standard of living over the past decade. China, because it’s growing so rapidly, can simply absorb high and rising commodity prices as part of the cost of doing business. But the mature U.S. economy can’t. Those same price hikes impose an implicit tax on every American, hitting us in the wallet at all turns and choking the economy — while simultaneously constituting an inflationary force.
The only genuine path to sustainable economic growth in the U.S. is to make a full-scale transition to an economy based on renewable energies. This would be a huge effort requiring trillions of dollars. But we need to launch it now — we can’t put it off until later. Building a sufficiently large renewable-energy infrastructure requires huge inputs of natural resources, and they won’t always be there for the taking.
China gets this. It has been stealing our future right from under our noses. It has a choke hold, for instance, on rare-earth minerals, essential to wind turbines, hybrid engines, compact fluorescent lightbulbs and other green technologies. It has established a commanding lead in solar-energy production. It’s insisting that the resource-rich South China Sea is its exclusive economic zone, to the dismay of Japan and other nations bordering the body of water. China is also the first nation to secure from the International Seabed Authority the right to explore the floor of the Indian Ocean in search of copper and other minerals.
These and other efforts support China’s massive push to develop an alternative-energy-based economy before prices for the basic inputs needed become too expensive and the resources too scarce. China spends $1 trillion a year on renewables, energy efficiency and clean technologies, with plans to make them 15% of their economy in the next 10 years. While the U.S. lags behind, China is treating the situation like war, farsightedly spending the vast sums needed to win a battle we have yet to join.