The two most powerful countries in the world, the United States and China, will meet this week in Washington to talk about climate change. And also their relationship problems.
In an ideal world, where the transition to clean energy was the top priority, they would be on friendlier terms. Perhaps affordable electric vehicles made in China would be widely sold in the United States, rather than being seen as an economic threat. Or there would be less need to dig a lithium mine at an environmentally sensitive site in Nevada, because lithium, which is essential for batteries, could be purchased without worry from China, which controls the world’s supply.
Instead, in the non-ideal real world, the United States is balancing two opposing objectives. The Biden administration wants to reduce planet-warming emissions by encouraging people to buy things like electric vehicles and solar panels, but it also wants people to buy American products, not Chinese ones. He worries that Chinese dominance of the global market for these essential technologies will harm the U.S. economy and national security.
Those competing goals will be at the center of talks on Wednesday and Thursday when the Biden Administration’s top climate envoy, John Podesta, meets for the first time with his Beijing counterpart, Liu Zhenmin, in Washington.
Trade tensions are likely to loom during their meetings.
The flood of Chinese exports, particularly in solar panels and other green energy technologies, has become a real sore point for the Biden administration as it tries to boost the same industries on American soil. Podesta has harshly criticized China for having “distorted the global market for clean energy products such as solar, batteries and critical minerals.”
Not only that, it has created a working group to explore how to limit imports from countries that have a high carbon footprint, a practice it called “carbon dumping.” That was considered a veiled reference to China.
It is not yet clear whether the Biden administration would impose a tariff on products imported from high-emitting countries. The idea has been embraced by a handful of influential Republican lawmakers as a way to protect American manufacturers from Chinese competition.
China, for its part, has complained to the World Trade Organization about US green subsidies. Podesta has called that complaint “beyond ironic,” since the Chinese government has invested heavily in its own manufacturing sector.
Liu has said that without Chinese technology, clean energy costs would rise, slowing the global shift away from burning fossil fuels, the main producer of greenhouse gas emissions that are warming the planet. “We need to keep costs low, otherwise no one will be able to afford the energy transition,” he recently told Bloomberg.
Both men are new to their current jobs, but not rookies. Podesta was in charge of climate law implementation before taking on the global role after John F. Kerry retired. Liu is a longtime diplomat who served as a United Nations official before becoming President Xi Jinping’s top climate envoy.
The United States is not alone in warning against the flood of Chinese green products.
The European Union is investigating whether electric vehicles made in China have benefited from unfair subsidies, and Xi received a rebuke during a visit to Paris this week when European Commission President Ursula von der Leyen told a news conference on Monday that Europe “cannot absorb the massive overproduction of Chinese industrial goods flooding its market.”
China dominates the production of solar panels, wind turbines, batteries and electric cars and buses, and also processes most of the minerals used in clean energy technologies. And Chinese companies have found solutions to trade barriers in the West, even shipping products through indirect routes that avoid tariffs on goods that come directly from China.
This presents a serious dilemma for the Biden administration. It has staked its global reputation on an ambitious climate agenda, which aims to halve greenhouse gas emissions by 2030, compared with 2005 levels. It is also trying to build, virtually from scratch, a domestic energy industry. renewable.
Competing with China in low-carbon manufacturing right now is a losing battle, said Li Shuo, who directs the China climate center at the Asia Society Policy Institute in Washington. “It is difficult to see how the United States will build a complete solar supply chain in time to respond to climate change, or how American-made solar products could ever be cost-competitive,” she said. It is not “the fight America should choose, nor one it can win.”
This new great power rivalry presents two risks for the United States. Avoiding a rival’s factories too much can raise costs and slow the transition to clean energy. But relying too much on a rival country’s factories raises national security concerns and can endanger American industries and jobs.
For example, a flood of cheap Chinese cars would threaten the American auto industry and a large, unionized, and politically influential base of auto workers. (President Biden openly courted them by accompanying his picket line during a recent strike.)
Beyond trade, Beijing and Washington disagree on many things, including the status of Taiwan, the Russian invasion of Ukraine and, not least, fundamental differences over the value of democracy.
“In a world free of geopolitics, if China wanted to supply the world with cheap and abundant clean energy inputs, from solar panels to critical minerals, it would benefit us all by enabling the fastest possible energy transition,” said Meghan O’Sullivan, who directs the Geopolitics of Energy Project at the Harvard Kennedy School. “But in the real world, the security imperative not to rely too much on China is leading countries from the United States to India to double down on supply chains for solar energy and critical minerals, which may slow the energy transition and make it more expensive. .”
The protest against Chinese exports comes at a time when this country’s politicians face a challenge that is foreign to China’s politicians: the elections.
In his re-election bid, Biden has highlighted his administration’s investments in renewable energy. He has made it his mission to visit new factories backed by government incentives, a clear effort to signal to voters his efforts to revive American manufacturing.
Investments in clean energy have increased since the passage of the Inflation Reduction Act in 2022. It began to unlock $370 billion in incentives to accelerate the country’s transition away from fossil fuels, with greater tax breaks for the production of batteries and the manufacture of solar panels. That, along with the Chips and Science Act, which set aside $39 billion in incentives for chip producers to invest in the United States, was aimed directly at reducing dependence on China while bolstering American manufacturing.
An analysis published Tuesday by private research group E2 found that 300 renewable energy projects had been announced since the passage of the Inflation Reduction Law. More than half were in Republican-controlled states.
Lisa Friedman contributed with reports.