Since former US Treasury Secretary Henry M. Paulson Jr., left Washington, the former Goldman Sachs chief executive has devoted much of his time to promoting sustainable economic growth and combating climate change– in China.
“The biggest economic event in this century will be the next 350 million Chinese going to the city and that’s going to drive economic and environmental outcomes,” said Paulson today, speaking to the Cleantech Forum, an annual gathering of entrepreneurs, financiers and policymakers in San Francisco.
Like other advocates, Paulson argues that the fight against global warming is futile unless the US and China join together to lead the charge. And despite bankruptcies and other setbacks that have roiled the renewable energy industry, Paulson said he still believes unforeseen technological breakthroughs will be game-changers.
But entrepreneurs need to focus on China, India and other nations with skyrocketing fossil fuel consumption.
“If you care about China you quickly realize that the only way we’re going to make headway is that there needs to be breakthroughs in new technologies that can be rolled out in scale in developing countries,” he said.
The petition filed today to declare solar giant Suntech’s Chinese operations bankrupt would not seem to bode well for China’s own ability to foster that kind of technological change.
Although China is home to 80% of the world’s solar panel manufacturing capacity thanks to cheap government loans that paid for a factory building boom, most of the major Chinese solar companies are also facing crushing debt loads and falling prices for their products.
Paulson said he thinks the Chinese economic model that results in the creation of huge home-grown industries by government fiat is now moribund.
“I’ve argued for a long time that the economy is so big and so complex it’s increasingly difficult to manage with this combination of market forces and top-down planning,” he said.
Still, he sees more prospects for change in China than in the US.
“My generation, it’s the first generation that really has got the science, has got the knowledge to do something about it,” he said, referring to climate change. “But we can’t come together. There’s so many Western democracies that seem to want immediate gratification, want things they don’t want to pay for. It’s generational equity and we’re all just screwing our kids and grandchildren.”