Bill McKibben: Watching it Happen in China

US building a steam powered time trolley into the past.
China working to own the future.

Bill McKibben on Substack:

China first. Remarkable new details emerged yesterday of a trend we’ve been talking about for years in this newsletter: the rapid spread of clean energy and its associated appliances not only in China but in all the countries increasingly in their sphere. The folks at the Net Zero Industrial Policy Lab at Johns Hopkins published a huge new study detailing the “rapid scale- up of overseas Chinese clean-tech manufacturing investments.”

Investment volume: Chinese firms have pledged at least USD 227 billion across green manufacturing projects. A high-end estimate approaches USD 250 billion. This surge of overseas green manufacturing investment is unprecedented; it now surpasses the USD 200 billion (in current 2024 dollars) invested by the US over four years of the Marshall Plan, at a time of similar American dominance of manufacturing in key industries.

I want you to go back and reread the last sentence of that paragraph—bigger, in real dollar terms, than the Marshall Plan. The Marshall Plan, of course, was what America spent to rebuilt the world in the wake of World War II, and it was a key driver of what became the most prosperous economy the world has ever seen. The American century was built in no small part on making sure that our allies (and enemies) in the Second World War recovered and were fitted into our trading system. Now the Chinese are doing the same thing, except somewhat bigger and faster. Bloomberg’s Sheryl Tian Tong Lee gives some sense of where the money is going:

Firms channeled the most capital to Indonesia, focusing on nickel-rich battery materials and solar projects, the researchers found. Morocco was also a draw for battery materials and green hydrogen investments, thanks to natural phosphate resources and its proximity to Europe. Middle East nations have been attracting investments in solar module and electrolyzer plants, supported by sovereign offtake agreements.

As David Fickling—a truly superb chronicler of the moment—writes:

This can be seen as the second stage of the China-led global energy transition. The first, which is still only a few years old, came from exports of finished products — solar panels, EVs, and batteries.

Thanks to that trade, about two-thirds of emerging markets now have a larger share of solar power in their grids than the roughly 9% in the US, according to a separate study this week from pro-transition think tank Ember. One in four are electrifying their entire economies more rapidly. EVs are being adopted in Turkey, Indonesia, Malaysia and the United Arab Emirates at a pace to match or even exceed developed markets.

As the Times explained, 

According to Ember’s report, the falling costs of energy produced by Chinese-made wind and solar installations have allowed countries like Mexico, Bangladesh and Malaysia to race past the United States in recent years in terms of using renewably produced electricity (rather than fossil fuels) in everyday activities like heating and cooling buildings or powering vehicles.

Across Africa, solar panel imports from China rose 60 percent in the last 12 months, and 20 African countries imported a record amount over that period, Ember said in a separate study recently.

And it comes with very good news for the planet:

This commerce is already affecting demand for fossil fuels. China’s solar exports last year alone were sufficient to cut long-run global carbon emissions by 4 billion metric tons, equivalent to about 40 days of emissions. Pakistan, which has for years treated gas generation as the backbone of its power network, has been asking suppliers to defer shipments of liquefied natural gas after a surge of solar importssuppressed grid demand. Saudi Arabia is facing one of the fastest declines in petroleum usage anywhere as photovoltaic farms replace fuel oil generators.

These exports have raised hackles and trade restrictions, however, due to their sheer scale. What’s different about the second stage of this transition is that foreign direct investment is building physical factories, ports and facilities that will generate jobs and investments for decades to come, cementing host countries’ commitment to clean technology.

So, you might wonder—what is the U.S. doing to match this remarkable challenge by the Chinese. In the past, if we feared a missile gap we built missiles. If Russia launched satellites, we built more and better. Faced with clear evidence of China’s green intentions, Joe Biden launched the IRA and we started to claw our way back into the race. 

Now we’re the throw-in-the-towel nation, and this week it was cabinet secretaries Christopher Wright and Doug Burgum doing the tossing. They traveled to Europe to try and convince those nations that the Paris accords were “silly,” that despite the worst fire season in the continent’s history global warming was only worried people because they read about it in the papers, and that therefore they should relax EU rules on heat-trapping methane and buy a ton of American LNG. Sharply expanding American fossil fuel exports to Europe, they insisted, was crucial to “peace and prosperity.”

On paper, this should be a hard mission—as the Times pointed out, “the European Union has a law that mandates a 55 percent reduction in its greenhouse gas emissions by 2030 and zeroing them out by 2050.” But Burgum (former governor of a state that draws more than a third of its power from wind turbines) called this “climate ideology.” And then he said something that I think illustrates our position beautifully: “We need to worry about the humans that are on the planet today. The real existential threat right now is not one degree of climate change.”

I think that explains the problem with America in a single sentence. We only care about now—the president has an attention span of three minutes, and corporate executives can’t see past the next quarter. Whereas the Chinese are clearly thinking many decades into the future, which they plan to own.