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China Could Be The Saviour Of Net Zero - But This Is Not Something To Celebrate
China's renewable industry is both a blessing and a curse.
China recently announced that it has utterly smashed its renewable energy targets and is on course to hit them five years early. This, combined with its stronghold on renewables manufacturing, means that China is solidifying itself as the lynchpin that the world’s net-zero aspirations pivot on. While this boom is helping herald a new era of planet-friendly energy, some are deeply worried about the world’s dependence on Chinese renewables, as it could derail the entire eco-movement. But how? And can we solve this issue?
Let’s start with China’s insane milestone. According to Global Energy Monitor, a San Francisco-based NGO that tracks operating utility-scale wind and solar farms, China will hit its 2030 renewables energy target by 2025! Between now and 2025, China is set to build a massive 750 gigawatts of renewable energy infrastructure, meaning that by 2025, they will double their renewable energy capacity. Bearing in mind here that China already has 228 gigawatts of solar power, which is more than the rest of the world combined.
But China’s renewable industry isn’t just dominating their home market. In 2021, 89% of solar panels bought by the EU were Chinese. In fact, 70% of solar panels sold worldwide are Chinese! While they don’t have as strong of a grip on wind, they still account for 50% of global wind turbine sales. But don’t forget, for renewable energy to be useful, you need grid-level batteries to ensure they can meet peak demand. Lithium-ion is the battery of choice for this vital piece of infrastructure, and China manufactures 90% of them!
The question has to be asked, why this massive push? Well, back in 2020, Chinese President Xi Jinping declared some seriously lofty climate targets. This is unsurprising, as China is the world’s largest carbon emitter, and if China didn’t start cutting back, it would face serious international pressure. The first of these targets was to reach peak emissions before 2030 and to become carbon-neutral by 2060. In proper Chinese fashion, the country got to work ruthlessly and efficiently expanding its renewables’ industry.
But there has also been massive foreign investment in the Chinese renewables’ industry. You see, unlike fossil-fuel-derived energy, whose most considerable cost over the lifetime of an energy plant is the fuel, the major cost of renewables is instead building the infrastructure, as wind and sunlight are free. This front-loads the costs, and if those costs are too high, it can scare off investors. So to get the solar, wind and even EV markets off the ground and into the mainstream, manufacturing costs had to be brought down. Well, one of the easiest ways to do this is to move manufacturing to China, where trained factory labour is plentiful and cheap, while shipping, taxes and local laws work in favour of export manufacturing. What’s more, foreign investors can hitch a ride on China’s massive renewables boom and benefit from the economies of scale that are associated with it.
Now, you might wonder what the big deal is here. After all, this is making renewable infrastructure cheap and plentiful, enabling the world to move away from fossil fuels and embrace a net-zero future. While this is true, it isn’t the complete picture. You see, relying on China like this has some huge risks! Namely, human rights violations, economic risks, security risks and stability risks. Let me explain.
We will start with the big one, human rights. China is not known for respecting these sacred laws and has crossed the line many times. But as I have covered in the past, China has used forced labour of Chinese Islamic minorities to manufacture solar panels, and potentially still does. The developed world can’t go down the path of supporting slavery again, even if it isn’t directly. Why? Well, firstly, society is now a lot more empathetic than it was (thankfully), meaning boycotts and protests against such human rights violations are 100% possible. If we rely on Chinese renewables, and they continue to use forced labour, then it could result in the West’s adoption of renewables to slow dramatically. Even worse, anti-climate action groups can use this angle to spread misinformation about renewables and put the brakes on the whole eco-movement.
The economic risks are also massive and will be felt far more in countries like the USA. Part of the promise of renewables is that they can create more, better paying and safer jobs than oil. But that is only true if the panels or turbines and their peripheral systems are being designed and built locally. The idea is to close the coal mines, oil drills and refineries and instead employ the same people as raw material supply and processing, factory workers, installers and maintenance crews. But if half of the jobs are shipped overseas, then the level of local jobs will plummet, unemployment will spike, and depravity will kick in. As you can imagine, this won’t sit well with these locals, and they will pressure their politicians to boost the old oil industry to get their old jobs back, even if that means breaking climate promises.
Relying on Chinese renewables can also significantly hamper our ability to hold China to account and ensure international security. It’s an open secret that China is currently aggressively expanding its borders. It has stolen lands in the Indo-Pacific, threatening to take lands from India, desperately wants Taiwan back (despite its independence) and is even positioning itself to lay claim to Lunar real estate. Luckily, sanctions, trade wars, and international pressure (along with NATO and US military presence) have stopped China from going on a British Empire-like raid of the world. But if NATO countries are reliant on China to meet their climate goals, this could stop them from being able to halt Chinese expansion, as China can just threaten to cease renewable exports to them. Remember, it takes years of planning and careful execution to switch an energy grid from fossil fuels to renewables. So if China did suddenly stop sending us renewable infrastructure as retaliation for sanctions against them (or alike), then it could seriously damage our energy security and cost us millions, possibly billions.
Likewise, there is also a supply issue here. While China manufactures most of the world’s solar panels, wind turbines and lithium-ion batteries, it doesn’t have the local resources to build them. As such, their renewables’ industry relies heavily on importing aluminium, copper, nickel, lithium, cobalt, rare earth metals, graphite and silicon from countries worldwide. Again, a trade war or full-on sanctions against China for its expansionist ways can strangle this supply and cause China’s renewable output to drop significantly. And, again, if Western countries rely on Chinese renewables, this would leave them high and dry.
But China’s own economy is also teetering on the brink. Thanks to years of weird property practices and population control, China’s economy is akin to the US’s in 2006, but worse! Some experts think that China has only a decade left before its entire financial system goes kaput in a catastrophic implosion that will make 2008 seem like a walk in the park! Now, it should be said that experts have been predicting this for years, and China has repeatedly staved off this crash. But if it were to happen, it would cause China’s renewables output to dry up, leaving the West without its one supplier of low-carbon energy.
So yes, China’s booming renewables’ industry is enabling them and the world to rapidly adopt ultra-low-carbon energy and, in turn, enabling us to reach those life-saving climate targets. But we can’t just rely on them; it is far too risky and has some significant shortcomings. If we want to live in the utopian clean energy future that was promised to us, we must nurture and support local domestic renewable manufacturing. There are other ways to make manufacturing cheaper than just doing it in China. Take Tesla, for example; their efficient design and automated production lines mean that they can make EVs in the US at a similar price to those made in China! If we could do the same, but for solar panels and wind turbines, then the switch to renewables will be far more sustainable, less politically risky, better for our economies and more secure.
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