Not Like This
How things could go bad for China, climate, and the world and how they probably won't
It’s Friday before Labor Day and deadlines hover all around me like the villain’s CGI hordes in the 3rd act of a Marvel movie. But one of my favorite climate writers (Robinson Meyer) at one of my favorite climate sites (heatmap.news) wrote a post that is right up my alley.
China Could Massively Juice Its Clean Energy Industry. The World Isn’t Ready.
Recap: Things in China are bad, and given that the Chinese government doesn’t want to just give the people money but instead expand production, perhaps Xi will dump subsidies that end up with the Chinese renewable sector and EV manufacturers, creating a glut of their products that weak domestic demand won’t be able to sop up. Here’s the key move in the piece:
But such a glut would be politically complicated in the medium and long term. Across developed democracies, politicians have promised that the energy transition will create good jobs at home. President Joe Biden’s mantra — “When I hear climate, I think jobs” — is just the most recent of many similar promises issued in Asia and Europe.
And a sudden global export glut of Chinese clean tech could be catastrophic for those promises, especially in Europe and North America, where inflation is higher and interest rates are tighter.
As Robinson makes clear, this is mostly about Europe. The United States both set up its carbon policies to be explicitly pro-American in their orientation and has no problem just putting up trading barriers to Chinese goods. The idea that US automakers are going to be swamped by Chinese EVs is just unlikely to unfold in the US. [Though see Lili Pike’s new piece on Polestar, Volvo’s elite EV unit (with Volvo being a Swedish brand that happens to be owned by the Chinese firm Geely) and is selling cars in the US.]
So this is really about Europe, which I do think bears watching. The European commitment to decarbonization is deep at the elite and mass level, but European policymaking is not really shifting gears in terms of speed despite the time-sensitive nature of the climate crisis. One could imagine Chinese-made EVs just flooding the European market at low prices and devastating the European automakers who have been slow to jump on the battery bandwagon. The question that I have and perhaps what I fear a bit less than Robinson is what happens next. Do European governments slam the door on Chinese products and fall back in love with smog-producing, petrol-guzzling, domestically-manufactured ICE vehicles after waves of unemployed auto workers in Stuttgart go on a nationalist rampage? I have a hard time thinking that it is on this issue that they would finally move fast and give up their status as the final frontier of free trade.
To be clear, things could go very wrong with the Chinese economy (though I’m sticking with my tepid take for now and one can already begin to see narrative shifting as policies that put more RMB in people’s pockets proliferate). No, my fear is not that the Chinese government decides to support clean tech and EVs in ways that reverberate in nasty ways down the line, but instead that the Chinese government falls into a much darker set of productivist ideas about what kinds of factories it should build to develop the country’s strength and ratchets up its military industrial complex. But that’s too dark of a future to peer into on the last real Friday of summer.