Friday, September 16, 2011

The fun with green energy columns continues

So John Ivison had another column today criticizing the Ontario Liberal government's green energy plan: here. The column focuses on a solar energy company that Dalton McGuinty visited this week, Eclipsall Energy Corp. The upshot of the column is to suggest that the company is actually in difficulty and that this should come as an embarrassment to the Liberals, given the green energy focus of the government. Indeed, this is a focus and the Liberals have planted a flag in encouraging green energy growth in Ontario. Jobs of tomorrow, etc.

Ivison cites the production line being temporarily shut down at Eclipsall, some interviews with company officials and other factors to essentially portray the business as being in a tenuous situation. Again Ivison mentions the U.S. solar manufacturer Solyndra who filed for bankruptcy last week, as an indicator of the health of green manufacturing in North America. There is some rebuttal/context to the Solyndra bankruptcy here. There is a broader perspective required on that company's difficulties. Again, Solyndra's failure does not necessarily translate into an indictment of green jobs and government support of them.

Eclipsall has responded today to Ivison's column:
Eclipsall is a strong, young, vibrant solar PV panel manufacturer with a bright future in Ontario. We are well on our way to hiring 100 Ontario workers. Eclipsall is a made-in-Ontario success story, part of a blossoming clean energy technology sector.

Today's National Post media report makes claims that are false and misleading and based on scurrilous rumours from our competitors in a highly competitive marketplace.

Eclipsall took over a near vacant building and has been slowly building up its business and adding staff, creating Ontario jobs.

Eclipsall routinely adjusts production levels in response to the needs of our customers and our business plan. All employees remain on the payroll at these times. We were in production last Tuesday when Premier McGuinty visited the plant. And we anticipate ramping up production again next week. We currently have 85 employees and customers visiting and calling daily. Orders are coming in and we are proud of our international reputation for building quality products.

We will continue to grow our business in Ontario, hire highly skilled Ontario workers, and help keep the lights on harnessing the clean power of the sun. We continue to be strong supporters of the Feed In Tariff program and of the efforts of all concerned to grow the solar and renewable energy sector here in Ontario.
Not necessarily surprising, of course they'd respond to a piece in a national paper that took a run at them.

It's fair enough that reporters and columnists want to take a look at how the green energy industry is doing in Ontario. What I'd say is missing from some of the pieces, though, is some sense of perspective about the early stages of this industry. It's not going to be perfection in terms of getting it off the ground. It's new. Political parties all say they want to spur job creation. Here's a government that's trying to help a new industry take root. Whether conservatives like it or not, there are many industries in Canada and elsewhere that have gotten their initial boost from government support. Even the internet was born out of government funding.

So I would suggest this recent piece as a counter to the Ivison column today to give some perspective to the attack style pieces you're reading on green energy: "Ontario’s green bet and the future of manufacturing." A few short excerpts to get a sense but it's well worth the read:
...environmental technologies are not widgets. They are technologically advanced, design- and engineering-driven goods. And this is where the province’s bet is most telling. It has chosen to focus on a technologically advanced production sector, for which demand will continue to grow.
At a political level, of course, the choice is quite simple. No other policy options exist, given public resistance to the kind of framework policy (think carbon tax), that would deliver similar structural changes. As Dani Rodrik of Harvard, one of the foremost experts on economic growth, recently argued in a paper focused on structural change in the global economy: “…Structural transformation is rarely the product of unassisted market forces. It is typically the result of messy and unconventional interventions that range from public investment to subsidized credit, from domestic-content requirements to undervalued currencies.”

The argument, then, is not so much that industrial policy is needed to kick-start structural transformation of the kind Ontario is betting on with environmental technologies. It is rather that the policy needs to be nimble enough in design and implementation to distinguish between emerging and mature technologies, and to stay away from supporting those where innovation is tapped out. It is too early to tell whether Ontario’s experience will strike the right balance on this critical question. But if it does, the payoff will be substantial.
That is what part of this election is about, on the green energy issue in particular. Making choices about who that political party and leader is that can be nimble enough to take us in the right direction.