BPR statement on George Floyd’s death, police violence:


George Floyd’s life mattered. Like Ahmaud Arbery, Breonna Taylor, Tony McDade, and too many others whose names we don’t know, Floyd was stolen from friends and family members who loved him and cared about him. His murder cannot be undone, and it is our most recent reminder of the fact that white supremacy, police violence, and racism are dangerously prevalent forces in America today… Read Full Statement

A Low-Carbon Behemoth: What China’s renewable energy apparatus means for global energy politics

In September, Chinese President Xi Jinping announced to the United Nations General Assembly that China would achieve carbon neutrality by 2060. His announcement sets up a comprehensive shift for the Chinese economy, which is currently both the world’s largest coal consumer and the world’s leading producer of renewable energy. Xi’s climate commitment and the country’s early investment in renewables puts China in a position to coordinate global climate cooperation, even as some leaders in the United States refuse to acknowledge that a climate crisis exists. China currently has a formidable commercial advantage in the renewable energy sector, but other countries—especially the United States and members of the European Union (EU)—are likely to start to invest heavily in their own renewable energy capacities as well as burgeoning sources of renewable energy. As these countries play catch-up, the geopolitical benefits from the race for renewable energy are unlikely to remain solely in China’s hands.

Over the past 20 years, Chinese companies have moved to the forefront of all stages of the renewable energy supply chain. China now controls 46 percent of global onshore wind capacity, manufactures 70 percent of all solar panels, and owns 77 percent of all lithium-ion battery cell capacity. The country’s renewable energy sector has been supported by tariffs, aggressive government investment, and European demand for Chinese-supplied raw materials. Chinese companies also control the mining of rare earth minerals that are necessary to produce the hardware that harnesses and stores renewable energy, like solar panels and wind turbines. They have invested in mines in Chile, Australia, Indonesia, and the Democratic Republic of the Congo, and they own the majority of the world’s lithium refinery capacity, as well as roughly 75 percent of all cobalt capacity. Although the materials needed to produce renewable energy are not actually rare, they are difficult to bring to market at the scale that the global energy transition requires. The rapid demand increase for these materials in the coming years will give China a key commercial advantage as other countries are forced to depend on China for supply.

"Xi’s climate commitment and the country’s early investment in renewables puts China in a position to coordinate global climate cooperation, even as some leaders in the United States refuse to acknowledge that a climate crisis exists."

Nonetheless, China’s commercial lead in the field does not signal a return to complete energy dependence for the US and the EU. Jason Bordoff, Director of the Center on Global Energy Policy at Columbia University, argues that the nature of renewable energy is such that reliance on one exporter is likely less geopolitically hazardous than reliance on one oil or natural gas source. Unlike with renewable energy, where dominant countries serve as intermediaries in the supply chain, countries rich in oil and natural gas directly control the energy supply. For example, if an oil supplier cuts off exports, the lack of energy could cripple importing countries. However, if China restricted rare earth minerals, it could cause delays or price increases, but it would not have the same immediate effect as cutting off oil or natural gas supplies. The market would likely give importers time to find alternative, commercially viable sources, given their relatively large supply in nature.

Similarly, restrictions on components necessary for harnessing and storing wind and solar energy might lead to price increases, but as these renewable energies can be produced anywhere where there is sun or wind, industries in other countries could ramp up accordingly. Renewable energy products are all pieces of the energy supply chain or components of energy production rather than an energy source in and of themselves. Although China stands to benefit commercially from its substantial head start, its renewable markets are unlikely to produce overwhelmingly dominant geopolitical power over states that import Chinese renewable energy products.

Furthermore, although the US and the EU will continue to invest in solar and wind products to meet their energy needs, they are likely to also turn toward green hydrogen to establish market independence and gain commercial advantages in a crucial emerging sector in which China does not yet lead. Green hydrogen is a clean source of energy produced using electrolysis and is most attractive for heating and fuel-cell technology in vehicles. Although clean hydrogen is not yet price competitive with fossil fuels or other renewable energy sources, electrolysis hardware prices have dropped 40 percentage points over the past five years and hydrogen is projected to play a crucial role in a decarbonized global economy.

"The nature of renewable energy is such that reliance on one exporter is likely less geopolitically hazardous than reliance on one oil or natural gas source."

It may take until 2050 for green hydrogen to be economically viable, but once it is, the geopolitical implications will be formidable. Most importantly, it can theoretically be produced anywhere in the world, unlike solar and wind power, which require specific weather conditions. Hydrogen can therefore provide crucial energy grid flexibility when there is less sun or wind, incentivizing the US and the EU to pursue this opportunity for self-sufficient energy production. Indeed, the European Commission recently announced plans to build 40 gigawatts of hydrogen electrolyzers, which would represent more than half of current global yearly hydrogen production. The EU aims to invest 470 billion euros into hydrogen infrastructure as a part of its Green Deal plan for decarbonization. This could allow the EU, which is currently highly dependent on Chinese solar panels and rare earth minerals, to circumvent Chinese-controlled supply chains for part of its renewable energy supply. Similarly, with adequate government support, hydrogen could provide 14 percent of the US’s energy by 2050. The industry is expected to support 3.4 million US jobs by 2050 and to generate $750 billion in annual revenue. China is spending in this area as well, but because hydrogen needs at least a decade to become economically viable, the EU and the US have the opportunity to establish themselves as leaders in the field. The world powers that secure commercial advantages in hydrogen stand to mitigate the potential leverage China derives from its existing market share of other renewable sources of energy.

Ultimately, climate change has sped up the transition to renewable energy, but global power dynamics may kick it into high gear. Chinese economies of scale have made solar photovoltaics and onshore wind installations price competitive with fossil fuels. Solar energy is now the most affordable form of electricity for two- thirds of the global population. The race for clean hydrogen leadership could similarly accelerate its adoption into the global energy mix. Thus, the complex fight for dominance in renewable energy—a sector which, realistically, is bound to have multiple key actors—may very well be the driver of the innovation we need to push towards a zero-carbon global economy.