The world’s two largest powers, the United States and China, will meet in Washington this week to discuss climate change. And also the problem of their relationship.
In an ideal world, where the transition to clean energy was a top priority, the two countries would have a friendlier relationship. Perhaps affordable Chinese-made electric cars could become widely available in the United States without being seen as an economic threat. Alternatively, the need to dig lithium mines in environmentally sensitive parts of Nevada would be reduced because the lithium needed for batteries could be safely purchased from China, which controls the world’s supply.
Rather, in a less than ideal world, the United States is balancing two conflicting goals. The Biden administration wants to reduce global warming emissions by encouraging people to buy things like EVs and solar panels, but it also wants them to buy things made in the U.S. rather than China. They fear that China’s dominance of the global market for these essential technologies could undermine the U.S. economy and national security.
These conflicting goals will become clearer this week when the Biden administration’s chief climate envoy, John Podesta, meets for the first time in Washington with Beijing native Liu Zhenmin.
Trade tensions are likely to loom over talks between the two countries.
The flood of exports from China, particularly in solar panels and other green energy technologies, is a real pain point for the Biden administration as it seeks to revitalize the same industry in the United States. Podesta harshly criticized China for “distorting global markets for clean energy products such as solar power, batteries and critical minerals.”
What’s more, he has set up a task force to look at ways to limit exports from countries with high carbon emissions, a move he calls “carbon dumping.” This was seen as a hidden reference to China.
It remains unclear whether the Biden administration will impose fees on products imported from high-emitting countries. The idea has been embraced by a few influential Republicans as a way to protect U.S. manufacturers from Chinese competition.
China has filed a complaint with the World Trade Organization about US green subsidies. Podesta called the complaint “beyond ironic” because the Chinese government has invested heavily in its own manufacturing industry.
Liu said that without Chinese technology, the cost of clean energy would rise and the global shift away from burning fossil fuels, the main source of greenhouse gas emissions that contribute to global warming, would be delayed. He said he was deaf. “We need to keep costs low, or no one will be able to afford the energy transition,” he recently told Bloomberg.
Although both are new to their current jobs, they are by no means newbies. Podesta was responsible for developing climate change legislation before taking on a global role following the departure of John F. Kerry. Mr. Liu is a longtime diplomat and served as a United Nations official before becoming President Xi Jinping’s special envoy for climate change.
The United States is not alone in warning against the flood of green products made in China.
The European Union is investigating whether Chinese-made electric cars benefit from unfair subsidies, European Commission President Ursula von der Leyen said at a press conference on Monday, as Xi visited Paris this week. listened. He said, “China cannot absorb the massive overproduction of manufactured goods flooding the market.”
China dominates the production of solar panels, wind turbines, batteries, electric cars and buses, and processes most of the minerals used in clean energy technology. And Chinese companies are finding workarounds to Western trade barriers, such as sending goods through indirect channels that avoid tariffs on goods imported directly from China.
This poses a serious dilemma for the Biden administration. The company has staked its global reputation on an ambitious climate change policy to halve greenhouse gas emissions by 2030 compared to his 2005 levels. It also seeks to build a domestic renewable energy industry essentially from scratch.
Competing with China in low-carbon manufacturing is currently a losing battle, said Li Shuo, director of the China Climate Hub at the Asia Social Policy Institute in Washington. “How the U.S. builds out the entire solar power supply chain in time to address climate change, or how American-made solar products can be cost-competitive,” he said. It’s difficult to understand.” It is not a battle that the United States should choose, nor a battle that the United States can win.
This new great power conflict poses two risks for the United States. Avoiding rival factories too much can drive up costs and slow the transition to clean energy. But relying too much on rival factories could raise national security concerns and put American industry and jobs at risk.
For example, a flood of cheap Chinese cars would threaten the U.S. auto industry and its large, unionized and politically influential autoworker base. (President Biden publicly courted them by walking their picket line during a recent strike.)
Beyond trade, China and the United States are at odds on a number of issues, including the status of Taiwan, Russia’s invasion of Ukraine, and fundamental differences over democratic values, among other issues.
Meghan O’Sullivan said: “In a world without geopolitics, if China wants to supply the world with cheap and plentiful clean energy, from solar panels to critical minerals, it must undertake the fastest possible energy transition. “We will all benefit by making this possible.” He directs the Energy Geopolitics Project at Harvard University’s Kennedy School. “But in the real world, security imperatives not to rely too heavily on China have led countries from the United States to India to duplicate supply chains for solar power and critical minerals, which is driving the energy transition. It could delay it and increase prices.”
The protests against China’s exports come at a time when the country’s politicians are facing a challenge foreign to Chinese politicians: elections.
In his bid for re-election, Biden has emphasized his administration’s investments in renewable energy. He has made sure to visit new factories supported by government incentives, a clear effort to demonstrate to voters that he is committed to reviving American manufacturing.
Since the Anti-Inflation Act was passed in 2022, investment in clean energy has surged. $370 billion in incentives, including expanded tax breaks for battery production and solar panel manufacturing, began to be unlocked to accelerate the country’s transition away from fossil fuels. This, along with the Chip and Science Act, which secured $39 billion in incentives for chip producers to invest in the United States, is aimed squarely at strengthening U.S. manufacturing while reducing dependence on China. There is.
An analysis published Tuesday by private research group E2 found that 300 renewable energy projects have been announced since the passage of the Inflation Control Act. More than half were in Republican-controlled states.
lisa friedman Contributed to the report.
