“An Iron Hand for Energy Efficiency”

Not to be confused with Adam Smith’s invisible hand for energy efficiency, which secretly sneaks into your house at night and turns down the thermostat…or something…I probably should have studied harder in my macroeconomics class. No, no, this is the iron hand that is the Chinese government and the incredible steps they’re taking to reduce energy use in their country:

The Ministry of Industry and Information Technology quietly published a list late Sunday of 2,087 steel mills, cement works and other energy-intensive factories required to close by Sept. 30…Over the years, provincial and municipal officials have sometimes tried to block Beijing’s attempts to close aging factories in their jurisdictions. These officials have particularly sought to protect older steel mills and other heavy industrial operations that frequently have thousands of employees and have sometimes provided workers with housing, athletic facilities and other benefits since the 1950s or 1960s. To prevent such local obstruction this time, the ministry said in a statement on its Web site that the factories on its list would be barred from obtaining bank loans, export credits, business licenses and land. The ministry even warned that their electricity would be shut off, if necessary.

Now, I’m not advocating this approach for the U.S.  First off, there’s enough resistance in DC to cap-and-trade, not to mention the rhetoric out there about “government takeovers of the health care and auto industries.”  Can you imagine if the feds started calling out specific small businesses that they had decided from on-high should be closed?  Particularly during a recession when there’s already high unemployment, especially in manufacturing!?!

But you have to admit it’s fascinating to see. Even more interesting is that it actually may help their economy in strategic ways:

The factories were chosen after discussions with provincial and municipal officials to identify industrial operations with outdated, inefficient technology, the ministry said…Closing factories is more palatable now than in the past because a labor shortage in many cities has made it easier for workers, particularly young ones, to find other jobs. The list of steel mills to be closed appeared to emphasize smaller, older mills producing fairly low-end grades of steel…consistent with the government’s broader goals of consolidating the steel sector and pushing steel makers into the production of more sophisticated kinds of steel. [emphasis added]

Reminds me a lot of cash for clunkers: get rid of lower efficiency while also stimulating targeted sectors. Which begs the question: what is our local equivalent? Assuming we’re not going to take on command and control tactics, how can we invest in energy efficiency in ways that grows jobs and accomplishes broad, strategic economic goals?  Sounds like a challenge for the Metropolitan Business Plan, if you ask me.


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