The United States and China jointly account for 40 percent of global greenhouse gas emissions. This brute fact puts these two nations at the center of any meaningful attempt to curb emissions to the levels required to prevent catastrophic climate change.
Yet the U.S.-China relationship is deteriorating at an unprecedented pace. Well before the Covid-19 pandemic, voices across the political spectrum in Washington began advocating for greater economic separation from China. Although opinions differed on what exactly such measures should entail, a bipartisan consensus emerged that China was refusing to align with Western political norms and economic practices and warranted a firm U.S. response. The pandemic accelerated such tendencies, not only highlighting the vulnerability of the world’s supply chains to external shocks but also strengthening mercantilist calls for national self-sufficiency in China, the United States, and elsewhere.
Continuing down the path toward political antagonism and economic decoupling would make it extremely difficult, if not impossible, to solve the climate crisis. U.S. collaboration with China is fundamental to any effort to avoid the worst consequences of climate change. That is because of the combination of two realities: the existing strength of China in producing the green technologies required for decarbonization, and the limited time remaining to reduce global carbon emissions. Simply put, the United States and China can only fix the climate crisis together.
The Technological Imperative
China is a world leader in the mass production of the technologies most needed to address the climate crisis by decarbonizing the electricity and transportation sectors. These low-carbon energy technologies (LCETs) include wind turbines, solar panels, electric vehicles, and lithium-ion batteries, which are crucial for electric cars and on-grid storage. Since joining the World Trade Organization in 2001, China has massively increased its global share of solar photovoltaic production, leaping from less than 1 percent to more than 60 percent of the world’s solar panels. China is now the world’s largest producer of electric cars. It makes over one-third of global wind turbines. And it houses over two-thirds of the world’s production capacity for lithium ion batteries.
In large part because of China’s unprecedented investment in manufacturing in green technology sectors, the cost of LCETs has fallen sharply. Since 2009, global prices for wind turbines and solar panels have decreased by 69 percent and 88 percent, respectively, making these technologies competitive with conventional sources of energy in many parts of the world. Wind and solar become especially competitive when they are deployed in conjunction with battery storage, where China’s massive investments in new manufacturing capacity have also generated rapid cost declines.
To avoid the worst consequences of climate change, the U.S. needs to decarbonize its electricity and transportation sectors by 2035 at the latest, a feat unimaginable without clean energy technologies that are currently primarily produced in China.
Meeting the goals of the Paris Climate Agreement will require net-zero emissions by 2050 and substantial reductions before then. Already by 2030, emissions must have peaked and begun to decline among the major industrialized economies given the world’s limited remaining carbon budget. In this timeframe, it is unrealistic to expect any other economy will be able to replicate, let alone surpass, China’s infrastructure for the production of LCET technologies required to meet the Paris Agreement’s goals. To avoid the worst consequences of climate change, the U.S. needs to decarbonize its electricity and transportation sectors by 2035 at the latest, a feat unimaginable without clean energy technologies that are currently primarily produced in China. For Americans who seek to take bold action to arrest global warming, the most efficient way to do so is therefore clear: collaborate with Chinese researchers and firms that are successfully mass producing LCETs, rather than throw up an economic wall between the countries that make further production harder and slower for each. U.S. renewable energy startups could benefit from working with Chinese partners to commercialize their technologies instead of competing with Chinese firms that have access to an institutional infrastructure supportive of mass production.
The world already possesses many of the technologies needed to begin making significant progress toward decarbonization. Recent cost reductions of solar and wind power mean that such progress is becoming ever more affordable. But trade wars and widespread talk of decoupling have begun to undermine the relationships needed to quickly and efficiently bring new technologies to market and deploy them at the scale required. The U.S. solar industry, dependent on imported solar technologies, vehemently opposed trade barriers. Tariffs would raise prices for Chinese solar panels without domestic alternatives, increase installation costs, and reduce jobs among U.S. solar installers—the main source of employment in the U.S. solar sector. If pursued further, such decoupling would thwart progress on decarbonization, making it highly unlikely that global warming could be contained to acceptable levels.
Making America Competitive
Zero-sum approaches to China relationship also obfuscate what the United States has to gain from collaboration. The United States is uniquely equipped to be at the global frontier of green technology demanded by the world as it reduces carbon emissions. America’s renewable energy industries, however, have suffered losses as a result of trade barriers to Chinese technologies first put in place under the Obama administration and significantly expanded under the Trump administration. Such trade barriers, which have not brought manufacturing “back” to the United States, damaged the kind of innovation in which the United States should take a leading role. While collaborating with Chinese industry, the United States should support the invention of new technologies through increased investments in research in the private sector and universities.
At the same time, the United States should continue to address attempts by China to discriminate against foreign firms. It could provide institutional support for domestic LCET firms trying to work with Chinese partners and should continue investing in domestic manufacturing capabilities as part of a national strategy for technological innovation. Collaboration entails working with Chinese partners on the development and deployment in LCET sectors, but it should also comprise efforts to improve domestic competitiveness, including in segments of clean energy supply chains that are currently not well supported in the U.S. economy. The United States should create domestic institutions to finance manufacturing projects, renew investments in vocational training and technical colleges, and design a stable regulatory framework to support domestic markets for clean energy technologies. It is especially important for the United States to build its own infrastructure because China, too, continues to engage in techno-nationalism and to pursue national self-sufficiency in key technology areas.
Yet only long-term investments in domestic LCET industries will allow the United States to change the terms of its relationship with China in clean energy industries without jeopardizing global climate goals. Even then, it is unlikely that the entire value chain for complex energy technologies would lie entirely within U.S. borders. As heightening U.S.-China tensions threaten to undercut efforts to strengthen global ties in low carbon energy industries, the United States cannot lose sight of the scale of the climate problem or it might miss the little time that is left to reduce global emissions. Building on the skills of Chinese firms in mass manufacturing is currently the only realistic path toward achieving the rapid and affordable decarbonization needed to avoid the worst consequences of climate change.