Green protectionism hampers clean tech development, warns GE

Emerging protectionist policies designed to bolster domestic clean tech industries hamper the development of new technologies and will damage the emerging sector's long-term health, the chief executive of General Electric's (GE's) energy business warned yesterday.

In an interview with the Financial Times, John Krenicki, who is also vice chairman of GE, said using climate change as justification for policy measures designed to boost a single country's green industries was counterproductive.

"Everybody wants production in their own country," he said. "But energy technology depends on scale, so unless we get the barriers down, we will never be able to deploy these technologies fully."

Krenicki said that by promoting less-efficient local manufacturing sites, governments are pushing up the cost and development time for new clean technologies that could be developed more efficiently under free market conditions.

He criticised the provisions of the US stimulus bill this year, which only provided money to US green businesses, and warned that if emerging economies adopted similar measures, it could seriously hamper the industry's development worldwide.

The US and the EU have been pushing for some time for an environmental technology free trade deal to form part of an agreement at climate change talks in Copenhagen, but emerging economies have been wary of such conditions, arguing that it will leave them reliant on Western firms.

Krenicki is the latest senior executive to warn that protectionist measures could stifle the development of clean technologies.

As well as concerns over the impact of the US stimulus bill, there has been disquiet over the Chinese government's introduction of a "Buy Chinese" policy for some renewable energy projects, while there have also been protests at measures adopted in Germany and Spain designed to boost their domestic wind energy industries.