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China: Green Power, Gray Reality | China Considered | Hoover Institution · China Considered

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  - Welcome to China Considered, a podcast that brings fresh insight
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  and informed discussion to one
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  of the most consequential issues of our time,
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  how China's changing and changing the world.
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  I'm Liz Economy, Hargrove Senior Fellow
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  and co-director of the program on the us China,
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  the World at the Hoover Institution at Stanford University.
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  Today, we're gonna explore China's clean energy dominance
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  and what it means for the rest of the world.
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  It's a topic that's generated a lot of heat,
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  no pun intended, because of its enormous trade
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  and investment implications,
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  and for its ramifications
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  for addressing global climate change.
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  To help us make sense of these issues, we're very fortunate
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  to be joined by two renowned experts, Dr.
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  Joanna Lewis and Dr. Scott Moore.
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  Joanna Lewis has studied China's clean energy sector
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  for over 20 years.
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  Her most recent book is Cooperating for the Climate,
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  which came out in 2023.
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  And Scott's a professor
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  of practiced the University of Pennsylvania.
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  His most recent book is China's Next Act, how Sustainability
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  and Technology are Reshaping China's Rise
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  and the World's Future That was published in 2022.
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  Welcome, Joanna and Scott. Great to be here.
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  - Likewise. Thank you, Liz.
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  - All right, so let me start with you, Joanna.
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  We hear a lot about China's global dominance in the
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  clean tech sector.
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  You know, you've looked at this issue
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  for, I don't know, 20 years.
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  You wrote that great book on China's wind power.
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  I think I might even have blurbed it
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  or reviewed it or something.
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  I remember reading it
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  and just thinking, this is so terrific.
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  But, but talk, I mean,
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  so there's practically nobody who's probably followed this
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  space for as, as long and as in depth as you have.
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  So just start us off, what does
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  that mean when we talk about China's
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  dominance in clean tech?
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  What does that look like?
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  - Yeah, I think dominance can be defined a
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  couple of ways, right?
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  I think it tends to refer to the technologies themselves.
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  And of course, China, you know, holds a significant share
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  of the world's manufacturing capacity for almost every kind
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  of key clean energy technology that we think about.
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  So they have, you know, at least 60%
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  of manufacturing capacity for solar pv wind batteries,
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  even higher for a lot of components.
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  You know, they produce over 90% of solar modules, over 80%
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  of wind turbines last year.
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  So this is what creates this sort of situation
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  where China's, you know, controlling a lot
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  of these key supply chain components
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  and is really dominant in the, in the production
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  of these technologies.
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  But another way, I think, to think about dominance is in
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  terms of their domestic markets, right?
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  And China has the largest domestic markets in the world
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  for these products, right?
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  So again, solar, wind, but also now batteries, EVs,
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  and it's, you know, it's somewhat not surprising that
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  because they have these massive now domestic markets
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  that they've also opted to build up
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  large manufacturing sectors, right?
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  To meet this demand.
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  - So Scott, I guess you probably generally see it the,
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  the same way, but what, what else?
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  When you think about dominance
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  and maybe China's dominance globally, what does
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  that sort of suggest to you?
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  - Absolutely, and, and would certainly echo the endorsement
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  of Joanna's book, which i, i I continue to teach in,
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  in my classes.
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  I think the only thing I would add is
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  that in this has particularly attracted a lot of attention
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  of late, including just over the last couple weeks
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  with the rare earth export control regulations that China
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  announced is the supply chain.
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  So if we talk about kind of dominance,
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  it's not only market share,
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  but it's also kind of a dominant position that's held
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  by Chinese firms in most segments of the supply chains
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  for clean energy technology.
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  So in, in addition to kind
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  of the final technologies themselves
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  and the market share that Chinese producers have in those
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  technologies, it's also a dominant position in most
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  of the upstream segments of those supply chains.
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  And that's something that I think is attracting a growing
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  degree of attention and concern from the private sector
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  and from policymakers outside China.
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  - Yeah, I mean, you raise an important point.
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  So let me just push you a little bit on that.
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  I mean, I have to say, I wasn't surprised
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  that China put the sort of export controls,
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  the licensing restrictions on for, you know, exports
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  to the United States.
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  I was a little bit more surprised
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  that they made this a global policy.
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  Why, why? What do you think sort
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  of impelled them to do this?
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  It seemed like a, a really almost going
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  nuclear kind of option.
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  - Well, maybe I can, I can start,
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  and I'm sure Joanna will have some, some thoughts as well,
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  but I, I just came back from China.
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  I was there last week,
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  and certainly this was kind
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  of the main policy topic of conversation.
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  Unsurprisingly, the regulations were announced shortly
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  before I landed.
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  And Chinese interlocutors were pretty, pretty clear that,
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  as you kind of alluded to, this was a sort of unsurprising
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  move to, in response to,
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  to perceived kind of provocations from the US side,
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  in particular during the trade, the trade talks,
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  and in the lead up to the now
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  seemingly postponed summit meeting or,
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  or at least high level meeting between President Trump
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  and Xi Jinping, that it was an attempt
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  to gain leverage
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  and to kind of signal China's determination
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  to take a, a strong position in those talks.
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  That being said, I agree with you
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  that I think both the scope
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  and the timing of the regulations seem to me to be kind
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  of an kind of a bit of an own goal.
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  I think, at least for now,
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  this was probably China's strongest card when it comes to
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  trade issues and certainly economic state craft.
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  And I think playing it now was not particularly
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  productive because as we've seen,
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  it provoked a very strong US response.
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  And frankly, a lot of concern
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  and counteracting moves more globally.
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  In fact, if anything, it seems to have least for now kind
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  of galvanized a bit of a coalition around the world to,
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  to try to mobilize new sources of production
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  and support to reduce China's dominant position and,
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  and at least certain rare earth, rare earth.
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  So in that sense, I do think it seems to have,
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  have not exactly had a beneficial effect,
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  at least over the, over the medium term.
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  But no doubt it's a, a strong card to play.
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  And I can see why the appeal to the Chinese side
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  of playing it was strong.
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  - Yeah, I mean, jta what do you think?
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  I mean, why, why go global with this sort of, you know,
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  set of controls and they're pretty severe controls?
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  - Yeah, I mean, I, I agree with what Scott just said, and I,
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  and I think, I mean there's really, you know,
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  I think China feels sort of under attack in many ways.
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  Like, you know, where you have the United States
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  and several, you know, in the EU as well
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  and other sort of putting in place all these tariffs and,
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  and other restrictions on foreign ownership,
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  Chinese investment, right?
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  And so there, as, as Scott said, I think they're sort
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  of looking for leverage in these ongoing trade negotiations.
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  And, you know, the clean energy technologies we're talking
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  about are really front and center here.
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  They're not the only industries at play,
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  but, you know, really, I think China has
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  staked a lot of their sort of future innovation and,
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  and, you know, global market, you know, sort of dominance
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  as we talked about on these technologies.
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  And so the, it's gonna be interesting to see
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  how different countries also position themselves sort
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  of vis-a-vis China in the United States as we see sort
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  of bifurcation across supply chains.
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  - Yeah. So lemme just take us one step back
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  and ask Joanna, how you think China got to this position
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  of dominance, you know, in the clean, in these sort
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  of clean green technologies?
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  Like what about China and its model
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  and model enabled them over the past decades
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  to arrive at this sort of position of supremacy?
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  And I have to say, you know, it's been astonishing to me
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  because as, as you both know, this is an issue sort of
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  China's environment
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  and clean energy is an issue, are issues that,
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  that I also have been very interested in
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  for, for many years.
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  And so it's been, you know, funny to me to see
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  how many people think that China just woke up one day
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  and all of a sudden was this clean tech monster
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  when actually, you know, it's the product of decades
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  of investment in, you know, human
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  and technological, you know, resources.
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  So talk a little bit about the China model.
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  Like how did China get here?
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  - Yeah, I mean, I think that you're right
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  that this has been a long time coming
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  and, you know, a really strategic concerted effort over
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  really three decades now.
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  You know, beginning with the wind industry,
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  like I talked about in my first book, where, you know,
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  there was this effort
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  and this realization, I think
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  among Chinese policy makers in some ways, sort of
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  before other countries, that in order to support
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  clean energy industries and,
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  and to sort of garner political support
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  for bringing in these technologies, which were sort
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  of viewed at the time as sort of new untrusted, you know,
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  more expensive in many cases at that point than the sort
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  of traditional fossil energy technologies
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  that you needed to build.
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  You know, you needed domestic subsidies, you needed,
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  you know, to create market share.
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  And so you saw this sort of concerted effort to put
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  policies in place across the board, both
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  to build domestic markets for these technologies in China
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  through subsidies and other policy mechanisms, you know,
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  to build like large scale projects,
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  but then notably to build the industries themselves, right?
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  And this specific way that this was done
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  does vary a bit industry to industry.
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  You know, the earlier years of their move into clean energy,
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  for example, in the wind industry,
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  was really about encouraging foreign
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  technology transfers, right?
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  Because at that point you had firms in the United States
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  and Europe that really did have the technological edge
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  in these technologies.
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  And, you know, the Chinese companies
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  and the Chinese government sort of realized that this was a,
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  this was gonna be a question
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  of catch up at leapfrogging, right?
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  And, and sort of how that could be done.
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  So they encourage foreign tech transfers, they use them
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  to build up domestic technological capacity, though, right?
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  And that's key. They didn't wanna re remain reliant in the
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  long term on foreign technology.
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  And that was sort of always part of their plan, right?
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  And of course, they've done this across numerous industries.
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  This really allowed their firms to become more innovative.
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  And, and now, you know, China produces globally state
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  of the art wind turbine technology as an example.
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  I think when you look at technologies that came later,
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  you know, solar and then batteries,
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  the model was somewhat different, right?
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  There was no opportunity if we look at, you know,
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  the lithium iron batteries, for example, no opportunity
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  for tech transfer because they had actually already very
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  quickly leapfrog the west in these technologies.
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  And so, you know, they, they did though apply, you know,
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  what I would say is like a tried
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  and true industrial policy playbook, which they, you know,
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  have done of course across energy industries
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  and combined a variety of, again, of state support
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  for these industries to develop as well
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  as protecting domestic markets.
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  - Yeah. But that's led to some problems for them
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  as well, right?
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  So both at home,
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  and Scott, let me ask you about this both at home in terms
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  of this, you know, idea of involution, right?
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  At this just extraordinary level of domestic competition,
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  and then in terms of its exports, some pushback
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  as countries talk about the export
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  of China's over capacity in these areas.
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  So Scott, maybe talk a little bit about sort
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  of involution, right?
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  And, you know, government is taking this on apparently
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  as a very serious issue.
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  So what's the, what's the challenge
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  that it's facing now having sort of conquered the global,
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  you know, marketplace with its clean tech?
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  What's the problem that China's facing?
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  - Yeah, well, absolutely, and I think if there was like,
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  you know, a word cloud for like the Chinese economy
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  and like a word of the year as it pertains to China,
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  it would certainly be Naja, which
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  as you say is com commonly translated it's evolution.
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  Although I confess my grasp of
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  that is pretty tenuous in the English language
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  before enough, before this.
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  Fair enough. I started to read about it, I'm like, what,
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  what is that exactly?
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  I guess I missed out on, on some basic biology.
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  But anyway, this is really a key kind of feature
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  of certainly China's clean tech sector,
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  but also, you know, as Joanna kind of alluded to
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  more broadly in the Chinese manufacturing
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  and industrial sector, where one way of interpreting it is
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  that the industrial policies that China has used to support
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  clean tech and other sectors have in some senses been too
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  successful in producing a lot of excess capacity
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  and markets that are frankly too competitive.
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  And there are several reasons for that.
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  But among them are that the way that policy
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  and sort of the political economy is currently structured,
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  China's domestic manufacturers can't scale
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  quickly enough in the domestic market,
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  and they can't basically consolidate fast enough.
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  And so what you see are these vicious price price wars
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  that basically shrink margins to, you know, near zero
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  or in some cases negative as we've seen
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  recently in the EV sector.
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  So it's a real kind of challenge.
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  And I think if we just sort of scope out,
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  unless the kind of political economy changes within China
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  for some of these sectors, what that means is that in order
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  to scale, in order to kind of consolidate
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  Chinese producers of EVs, wind, solar, they have to export,
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  they have to seek growth in, in other markets.
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  The problem is that
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  because of geopolitics, China has been,
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  in particular in the clean, clean energy sector,
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  increasingly shut out of a lot of the, the most developed,
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  most valuable markets, the us
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  and in the case of EVs, some of Europe as well.
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  And so that means that China has to seek that,
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  that export led growth in the global south.
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  And you really see that's
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  where China's trade is, is booming.
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  That's where China's exports are increasingly shifting to.
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  But at present, those markets aren't quite valuable enough.
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  They're not quite sort of developed enough
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  to absorb all of that capacity
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  and to kind of make up for the increasing restrictions
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  that Chinese producers are seeing in the developed markets.
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  And I might also just kind of add that there are, you know,
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  I mean, it's been around for a little while,
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  but we're kind of starting to see a few more cases in places
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  like Turkey where there is, there does seem to be growing
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  opposition to Chinese imports in, again,
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  particularly sectors like Ev where they're
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  otherwise very competitive.
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  But we're kind of starting to see political
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  opposition to some of that.
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  And I think that's a real kind of warning sign for,
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  for Chinese firms.
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  And I think what all this adds up to is there is like a kind
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  of geopolitical premium for China's clean, clean energy,
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  clean tech sector that didn't exist, you know, five
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  to 10 years ago.
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  And that's increasingly, I think, a,
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  a major challenge separate from just the, the, the,
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  the basic economic challenges
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  of translating Indu this massive industrial policy
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  investment that Joanna was talking about into sustainable
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  commercial, globally competitive success in these,
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  in these sectors.
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  - Yeah, I think that's, you know, really well said.
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  And the last point about sort of rising concern
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  and resistance within,
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  let's call them middle income economies, some of the bricks,
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  economies like Brazil
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  and India in addition to Turkey, Argentina, where they're,
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  they have their own desire, right?
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  To develop their own nascent clean tech industries,
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  and they don't, you know, want to, you know,
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  face this onslaught.
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  They simply can't be competitive with China at this point.
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  I think that does send an important message
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  to the Chinese in a way that Europe
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  and the us you know, that we don't
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  because these are countries that China, you know,
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  nominally likes to say that it's leading
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  or it's their closest partners or whatever.
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  It's used to framing a narrative that, you know,
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  the United States is just trying to contain us,
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  hence it's taking, you know, these actions,
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  but it can't make that same kind of case with, you know,
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  these other countries.
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  And so I wouldn't be surprised if
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  that isn't at least partially responsible,
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  although I think the, what you've talked about in terms
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  of the domestic situation is really the driver
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  for Xi Jinping's, you know, thinking that they have
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  to do something differently.
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  And so, you know, Joanna, I don't know if you've seen any
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  of the moves that Xi Jinping has been, you know, sort
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  of talking about that the Chinese leadership has been
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  discussing to try to address this issue of involution,
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  like simply telling local governments, you know,
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  don't all invest in these sectors.
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  I mean, how effective do you think something like that
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  or some of the other steps are likely to be?
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  - Well, I think there's sort of two sides to this, right?
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  I mean, I think on the one hand, yes, you, you, you can't,
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  you know, these companies can't survive sort of
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  with the level of competition
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  and you're gonna see major consolidation.
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  I mean, in some cases that's just sort
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  of the natural evolution of these industries, right?
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  I mean, back in the early days of the wind industry,
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  there were thousands of companies
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  and you know, now there's a handful, right?
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  And you know, and then you saw that in solar,
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  you're gonna see that now with batteries and EVs as well.
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  But as Scott said, I think, you know, this is happening
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  of course against a landscape where it's harder
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  and harder for them to go abroad, especially in, you know,
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  more western markets.
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  I mean, I was talking to a, a Chinese solar
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  company representative the other day based in the
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  United States, you know, who said that even
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  with like all the geopolitics
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  and all the pushback against Chinese investment,
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  like they can still make money in, in these markets
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  because the margins are just so tight, you know,
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  domestically that anything they can do to get out of China
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  and get into these markets is really to their advantage,
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  at least for the time being, right?
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  And we'll talk about kind of the changing policy landscape
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  for foreign ownership.
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  But, you know, I do think, as you said, I mean this is part
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  of a broader shift we're seeing globally, where, you know,
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  countries all over the world are employing this sort
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  of green industrial policy, right?
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  To build up their own industries,
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  protect their own industries, right?
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  So it's not just China in some ways it's,
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  it's countries sort of taking the Chinese playbook
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  and sort of modifying it right
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  to their own domestic contexts.
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  But I think, you know, this really does reflect, you know,
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  what I've called sort of the unique political economy of,
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  of these clean energy industry, right?
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  Where if you have this need for state support
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  for these technologies, especially in the
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  early stages, right?
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  Whether it's subsidies or r
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  and d support for them to compete with the, you know,
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  more traditional fossil fuel industries,
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  the states also want the jobs, right?
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  They want the local economic benefit,
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  everything that comes along with it.
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  And so, you know, for countries
• 20:14
  that are looking at their low carbon energy transition,
• 20:16
  they don't just wanna be trading, you know,
• 20:20
  being reliant on imported fossil fuels, you know,
• 20:23
  from the Middle East or wherever, you know,
• 20:24
  to being reliant on Chinese solar panels.
• 20:26
  And they want to be thinking strategically about
• 20:30
  what is in it for them, you know,
• 20:31
  and building up local economy, local jobs.
• 20:34
  And so I do think it's,
• 20:35
  that's gonna be the really interesting thing to watch
• 20:37
  with China, sort of as they go abroad,
• 20:39
  what are the models they're using?
• 20:41
  Are they transferring technology knowhow sort of local
• 20:45
  expertise to these countries, right?
• 20:47
  'cause I think, you know, as Scott mentioned,
• 20:49
  like there's just sort of less appetite for
• 20:52
  Chinese investment that isn't sort
• 20:54
  of bringing these local benefits.
• 20:55
  - Yeah. I mean, I'm just curious, have you seen evidence
• 20:58
  that China is transferring technology
• 21:01
  or have you seen countries
• 21:03
  that you think are not necessarily the next China,
• 21:06
  but are in fact adopting the China model?
• 21:09
  I mean, one could argue, frankly, and,
• 21:10
  and Scott also served for a bit in the,
• 21:12
  in the Biden administration that,
• 21:14
  that the Biden administration was adopting, you know,
• 21:17
  with the inflation reduction act, some elements of,
• 21:19
  of the China, of the China playbook.
• 21:23
  But, but do you see like the next China, you know,
• 21:27
  in any space, a a country that is really committed
• 21:30
  to developing its own, you know, clean tech,
• 21:33
  clean energy industry.
• 21:36
  - I mean, you see it across the board in a lot
• 21:38
  of the emerging and developing countries.
• 21:40
  I mean, there was a study that just came out
• 21:43
  that showed a huge jump in overseas clean energy
• 21:45
  manufacturing investments by China.
• 21:47
  So again, this is sort
• 21:49
  of different from just like sales offices, right?
• 21:51
  But actually like setting up facilities.
• 21:54
  And then what's interesting is like,
• 21:55
  what's the ownership of those facilities?
• 21:57
  You know, are they essentially sort
• 21:58
  of Chinese shadow companies in Malaysia,
• 22:00
  or is there sort of real local capacity?
• 22:03
  And I think you do see a shift in how
• 22:05
  that is starting to be structured.
• 22:07
  But I, I take your point, you know, I do think that
• 22:10
  when you look at this sort of shift towards, you know,
• 22:13
  green industrial policy, this,
• 22:15
  the Inflation reduction Act was a, a ex, you know,
• 22:17
  perfect example of this, right?
• 22:19
  And you know it,
• 22:21
  but of course that was why it was so successful and,
• 22:24
  and was able to be passed on a bipartisan basis, you know,
• 22:27
  back in 2022.
• 22:28
  It included clean energy subsidies that were directly tied
• 22:32
  to US manufacturing, you know, in, you know,
• 22:34
  essentially forcing the localization of these technologies.
• 22:38
  You know, my fir my first book talks all about the local
• 22:40
  content requirements, you know, that
• 22:42
  push these technologies, there's differences, you know,
• 22:44
  I'm not gonna, I'm not gonna say that there aren't,
• 22:47
  you know, very different ways, right?
• 22:49
  That of course, the US goes about doing this
• 22:51
  than a country like China.
• 22:53
  But, you know, the idea was to bring these,
• 22:57
  either bring the, these manufacturing facilities back
• 23:00
  to the US from China, you know, in the case of wind
• 23:02
  and solar or invigorate, you know,
• 23:04
  new industries in the case of EV and batteries.
• 23:07
  - So I wanna, I wanna talk about the state of,
• 23:10
  of clean tech in the United States today
• 23:13
  and our ability to compete in the future.
• 23:15
  But before I do that, Scott,
• 23:16
  I wanna tap into your expertise on, on China's sort
• 23:20
  of water situation,
• 23:21
  because of course, water is so important
• 23:24
  to the development exploitation of
• 23:27
  so many different kinds of energy.
• 23:29
  It just is essential.
• 23:30
  How is the water landscape in China's shaping sort
• 23:34
  of China's energy development these days?
• 23:38
  - Yeah. Well thank, thank you, Liz, for, for the, the kind
• 23:41
  of invitation to say a little bit about that.
• 23:42
  And the way I would just sort of like water in China,
• 23:47
  especially in the context of this discussion, is
• 23:49
  that when you think about kind of climate policy
• 23:51
  and responses to the world's climate crisis,
• 23:55
  generally people sort of divide it in at, you know,
• 23:58
  two big categories.
• 23:59
  One is mitigation, trying to tackle the actual root cause
• 24:03
  of climate change, namely
• 24:05
  by reducing greenhouse gas emissions.
• 24:07
  And then there's basically just trying to deal
• 24:10
  with the climate change that is already happening.
• 24:12
  And that's sort of built into the system that's adaptation.
• 24:16
  And really a lot of China's investments in
• 24:19
  water resource management, I think can be usefully seen in
• 24:24
  that sort of climate adaptation lens.
• 24:27
  It is kind of worth noting that for China in particular
• 24:31
  and the sort of global climate agenda more broadly,
• 24:34
  it's really been shifting over the last five years
• 24:38
  or so increasingly towards adaptation.
• 24:41
  Partly, I think actually as a response to the fact that most
• 24:45
  of the world's big economies
• 24:47
  and emitters at this point do have long-term decarbonization
• 24:53
  commitments in place.
• 24:55
  Obviously lots of questions about how you get there,
• 24:57
  and we can maybe return to that in the case of China
• 25:00
  if it's interest, if it's you know, of interest.
• 25:05
  But, but regardless, you know, there are kind
• 25:07
  of long-term commitments in place
• 25:09
  for most of these economies.
• 25:10
  So there's kind of that,
• 25:12
  but also, of course, in the meantime, we're,
• 25:15
  we're seeing bigger and bigger climate impacts.
• 25:18
  And that's also true of China all the way, going back
• 25:21
  to when China first really entered into
• 25:24
  international climate diplomacy.
• 25:27
  One of the big talking points was that China is one
• 25:30
  of the countries that's most heavily impacted
• 25:32
  by climate change.
• 25:33
  And that as a developing country that's, that's really
• 25:36
  of special concern.
• 25:37
  Water has been a big focus of China's both concern
• 25:41
  and response to that actual impact of climate change.
• 25:46
  And there are lots of kind of interesting
• 25:47
  historical reasons for that.
• 25:49
  Also, kind of a weird percentage
• 25:52
  of China's senior leadership, most notably hut.
• 25:56
  Tao had a background in hydropower
• 25:58
  engineering or irrigation.
• 26:01
  Irrigation incidentally was like a, also a kind
• 26:03
  of weird fixation for Joe and la.
• 26:06
  But regardless, that kind
• 26:08
  of water has played like a big kind of outsized impact.
• 26:12
  And just very briefly, a couple of the things that,
• 26:15
  that we've seen in that space that's sort of relevant
• 26:17
  to adaptation and climate resilience.
• 26:20
  China's built a ton of big dams over the last 40 years,
• 26:25
  and those have lots of concerning local environmental
• 26:29
  and social implications,
• 26:31
  but they do generate a lot of electricity
• 26:34
  and actually hydropower, despite the, the enormous growth
• 26:39
  of wind and solar China hydropower actually accounts
• 26:42
  for the single largest share
• 26:44
  of non-fossil energy in China's energy system.
• 26:48
  So it's a very significant source of electricity, first
• 26:53
  of all, of, you know, very low carbon
• 26:55
  electricity for one thing.
• 26:57
  Secondly, that adds up to a lot of water storage capacity,
• 27:01
  and that's really helpful in times of water shortage
• 27:04
  or drought, the frequency of which is one of the,
• 27:08
  the manifestations of the climate impacts
• 27:11
  that, that China is seeing.
• 27:12
  So you kind of add all that up
• 27:13
  and it's, it's actually a really kind
• 27:16
  of interesting asset in some ways for adaptation capacity.
• 27:20
  One final thing I'll just mention is
• 27:23
  that China also is a little bit unique
• 27:26
  globally in the amount of effort that they've invested in
• 27:30
  doing what are called inner basin water transfers.
• 27:32
  And this is basically the idea of, you know,
• 27:34
  typically you have a, a river that has a sort
• 27:37
  of very large catchment
• 27:38
  and it all flows to the sea along basically the same path.
• 27:43
  Inter basin transfers link different basins so
• 27:46
  that you can transfer water artificially that wouldn't be,
• 27:50
  you know, wouldn't connect naturally.
• 27:53
  China has installed the world's largest
• 27:56
  inter basin transfer network,
• 27:58
  and that has actually had some really beneficial impacts.
• 28:02
  One meeting I had
• 28:03
  during my recent trip was about groundwater levels in
• 28:07
  Beijing used to be so low that people were really starting
• 28:10
  to be concerned that they would have
• 28:11
  to import water from elsewhere.
• 28:14
  But thanks to this inter basin transfer,
• 28:17
  the groundwater levels are now back up,
• 28:21
  and that's been really helpful for all sorts of ecological
• 28:25
  and, and economic uses of water.
• 28:27
  So just to say, kind of big investment
• 28:30
  and potentially a really big contribution
• 28:32
  or asset in terms of adaptation to climate impacts.
• 28:36
  - That's, I mean, that's really interesting.
• 28:38
  I have to say, you know, my research,
• 28:39
  my work was much earlier than, than this.
• 28:43
  And so on these issues,
• 28:44
  and, you know, I remember when the sort
• 28:47
  of water shortages were a serious constraint on things like
• 28:51
  China's ability to do fracking, right?
• 28:54
  And so I, I still had in my head
• 28:57
  that somehow the limitations of China's, you know, access
• 29:01
  to water could be constraints on their energy development.
• 29:05
  But it seems to me you're saying they've largely solved most
• 29:09
  of these issues partially in response to
• 29:13
  what they perceived quite readily
• 29:14
  to be a very significant threat from climate change.
• 29:17
  Do I have that right?
• 29:19
  - Well, I would say, I mean, there are still lots of, of,
• 29:21
  of challenges, particularly in, in, in parts of the country.
• 29:25
  So it does remain a constraint.
• 29:27
  Wa lack of water does remain a constraint for,
• 29:30
  for fracking in some areas.
• 29:32
  Availability of water for cooling is also a, a,
• 29:35
  a constraint in, in
• 29:36
  for power sector development in some places.
• 29:40
  But I think what you can say,
• 29:41
  or what I could say at least pretty in,
• 29:45
  in a pretty confident way is that China has of,
• 29:48
  of any large country,
• 29:50
  China has invested way more effort into thinking about how
• 29:54
  to manage and sort of allocate
• 29:58
  and govern its water resources more kind of
• 30:02
  in a more coherent manner than any other country.
• 30:05
  And I do think as we, you know, think about the acceleration
• 30:09
  of climate impacts, most of which I will point out do have
• 30:12
  to do in one way or another with the distribution
• 30:15
  and availability of water, that that's a,
• 30:18
  a really significant asset.
• 30:19
  And I do think it positions China, you know, kind
• 30:23
  of in some ways in a, a, a better position than a lot
• 30:27
  of other, a lot of other large countries
• 30:30
  that face similar challenges.
• 30:33
  - Yeah. And if I could just jump in absolute,
• 30:35
  just one thought on this, Scott is
• 30:37
  of course the expert on water.
• 30:38
  But you know, one thing to keep in mind is that, you know,
• 30:42
  with, with climate change, you know, you're going
• 30:44
  to see more frequent droughts, right?
• 30:47
  And, and we did see in China, you know,
• 30:50
  prolonged droughts in 20 22, 20 23, right?
• 30:53
  In some of the hydropower rich regions forced, you know,
• 30:56
  essentially like emergency ramp ups of coal generation.
• 30:59
  And so I think
• 31:01
  that's gonna be an issue in the long term, right?
• 31:03
  Where if they're sort of reliant on hydropower as part
• 31:06
  of their, you know, so-called new energy mix
• 31:08
  or, you know, low carbon energy mix, looking for the sort
• 31:12
  of less climate affected technologies, right?
• 31:16
  Like wind and solar will be part
• 31:17
  of the overall shift away from coal.
• 31:21
  - Absolutely. Okay. I wanna come climate in a minute,
• 31:24
  but let me ask,
• 31:25
  and let me leave this open to either one of you.
• 31:27
  I'll start with Joanna,
• 31:28
  but you know, whichever one
• 31:30
  of you feels like you wanna tackle it, what about the US
• 31:33
  Now, three of us are all kind of China, you know,
• 31:36
  specialists, but obviously, you know,
• 31:39
  we both care deeply about
• 31:41
  what takes place here in our own country, you know,
• 31:44
  where does sort of the clean energy,
• 31:46
  clean tech industry stand right now?
• 31:50
  We have President Trump
• 31:52
  who clearly places a lower priority on this
• 31:55
  to say the least, than on, you know, big return
• 31:58
  to fossil fuels.
• 32:00
  You know, what does that mean?
• 32:01
  Are we basically out of the clean tech race and space,
• 32:05
  or do we think companies are going continue
• 32:07
  to remain committed to, you know, moving forward
• 32:11
  because that is the direction in which the entire rest
• 32:13
  of the world is moving.
• 32:14
  What's your sense for, you know,
• 32:16
  do we basically say game over and walk away,
• 32:19
  or do we think about how we continue to compete,
• 32:23
  how our companies can position themselves still to be,
• 32:27
  you know, like if not leaders at least globally competitive?
• 32:30
  So Joanna, do you have some thoughts? And then Scott?
• 32:33
  - Yeah, I, I mean, I think that, you know, it's not
• 32:36
  so much a question of the United States sort
• 32:38
  of giving up, right?
• 32:40
  But I do think that the US needs
• 32:42
  to rethink our industrial strategy.
• 32:45
  You know, I think first we really need
• 32:48
  to be more strategic about how we compete
• 32:50
  with China in this space
• 32:53
  and, you know, assuming we decide we want to, right?
• 32:57
  And then this is sort of the question right now here in
• 32:59
  Washington, but I think, you know, there are certain areas
• 33:04
  where US industries are not really well poised to compete,
• 33:07
  like mass producing crystal, and so crystal
• 33:10
  and silicon solar modules, right?
• 33:13
  Probably also not in lithium iron phosphate batteries.
• 33:17
  So I think, you know, we need to be smarter about looking
• 33:20
  for opportunities in emerging areas.
• 33:22
  There's a lot of conversations happening about
• 33:24
  that right now in Washington,
• 33:25
  including within the Trump administration, you know, about
• 33:29
  where, where do we, you know,
• 33:31
  potentially still have a technological edge
• 33:33
  or at least the sort of ability, you know,
• 33:35
  where should we be directing r and d and other investments.
• 33:38
  I think second the United States, just to
• 33:41
  - Clarify, Julie, sorry, just to clarify, so, so I know
• 33:44
  that the administration is committed to being sort
• 33:47
  of like in AI in other sectors being competitive, you know,
• 33:50
  the whole, we're gonna promote our tech stack globally,
• 33:53
  you know, definitely have heard that message,
• 33:56
  but are you saying you think there's,
• 33:57
  there are still discussions within the Trump administration
• 33:59
  about where to be competitive in the clean energy space?
• 34:03
  - I do, because particularly when you're talking about
• 34:05
  battery technology, there are many uses for this
• 34:08
  beyond just, you know,
• 34:10
  decarbonization climate change, right?
• 34:13
  Having battery storage technologies are gonna be really
• 34:16
  important in a variety of defense applications.
• 34:18
  And you know, also just for grid stability
• 34:21
  and a variety of other areas.
• 34:22
  So I think there's this belief that a strategic area
• 34:27
  where the US wants to be making batteries
• 34:30
  and, you know, you do see sort
• 34:31
  of the continued investment in these facilities, even as,
• 34:35
  as tax credits are shifting, you know, in the,
• 34:37
  the more recent bill, you know, you saw,
• 34:40
  you saw tax credits removed for wind and solar,
• 34:42
  but maintained in batteries in some other areas.
• 34:46
  So I think, you know, the other piece of this is
• 34:50
  how the US rethinks our strategy for partnering
• 34:53
  with foreign, including Chinese companies, right?
• 34:56
  And this is a little bit more sensitive,
• 34:59
  but again, you see partnerships now
• 35:03
  between Chinese and US EV companies, right?
• 35:08
  Auto companies continuing in the Trump administration
• 35:11
  that had been put on hold during the Biden administration,
• 35:14
  of course, the notable one being the Ford Cattle Partnership
• 35:19
  where cattle is licensing battery technology to Ford,
• 35:23
  you know, for use in domestically produced EVs here.
• 35:27
  You know, I believe that there are ways
• 35:29
  that we can structure these technology partnerships that,
• 35:34
  you know, directly benefit US companies,
• 35:37
  and in fact, I think are actually crucial
• 35:40
  and critical to the survival of our US auto industry.
• 35:43
  I don't think we can remain globally competitive if we
• 35:47
  don't leapfrog in EV technology.
• 35:50
  I think, again, regardless of what you
• 35:53
  or the Trump administration
• 35:54
  or anyone, you know, sort of the US public thinks about
• 35:57
  climate change, many people in the auto industry believe
• 36:01
  that EVs are just superior technologies.
• 36:03
  They're nicer to drive that, you know,
• 36:05
  that this is just the future of auto technology.
• 36:09
  And so, you know, we, I think we need to be much more open
• 36:13
  to how we think about these partnerships.
• 36:15
  You know, there's a lot of ongoing discussion about
• 36:18
  restrictions on foreign ownership
• 36:19
  and, you know, increasingly new policies mentioned,
• 36:24
  you know, every day it seems, whether it's, you know,
• 36:27
  coming out of treasury or defense or, you know,
• 36:29
  and sort of how we're thinking about Chinese
• 36:31
  companies investing here.
• 36:32
  And, and I don't wanna say
• 36:33
  that there aren't real security concerns that, you know,
• 36:36
  need to be considered, of course,
• 36:37
  but I do think that it's not one size fits all.
• 36:40
  You know, I think we can be very careful about
• 36:43
  how these partnerships are imagined or are, are structured
• 36:46
  and, and that there's not, you know, there are plenty
• 36:48
  of areas where it makes sense for this cooperation
• 36:51
  to continue, you know, and it's not just about the hardware,
• 36:54
  you know, the last thing I'll say, right?
• 36:55
  Like China is becoming so advanced on like battery swapping,
• 36:59
  battery recycling, you know, these are areas
• 37:02
  where it's not just about IP or Right.
• 37:05
  It's, it's about kind of learning best practices.
• 37:08
  - Yeah, I mean, I have to say, I think, you know,
• 37:11
  early on I used to sometimes joke, well, not really joke,
• 37:14
  but just say when I was in the administration, you know,
• 37:16
  what we should do with China, what China did
• 37:19
  with us right back in the early 1990s,
• 37:21
  and have, I think you put it Joanna,
• 37:23
  as encourage technology transfer.
• 37:25
  I think some companies
• 37:26
  what might state it slightly differently, which is
• 37:29
  to say if you don't, you may not have market access, right?
• 37:33
  But I think Xi Jinping got way ahead of us on that one,
• 37:36
  you know, and there's not gonna be any technology transfer
• 37:39
  from cattle to anybody near as I can tell.
• 37:42
  In fact, I think I recall seeing
• 37:45
  she say something about cattle not being too ambitious about
• 37:49
  going global with its technology, maybe a year ago or so.
• 37:53
  But, but Scott, let me, let me ask you to weigh in on,
• 37:55
  on this, you know, particular issue.
• 37:58
  - Yeah, well, thanks.
• 37:59
  I mean, yes, certainly like something that you can't help
• 38:02
  but, you know, compare
• 38:03
  and contrast China's approach with that of the us
• 38:07
  and I think the two big things
• 38:09
  that leap out at you when you sort of think about
• 38:12
  that comparison in, in, in a big picture sense, first
• 38:15
  of all, like it's, it's this, you know, the change
• 38:19
  of the administration has produced a very dramatic change
• 38:24
  in US energy policy,
• 38:25
  but that's also part of like a 30 year story in the US
• 38:29
  of seesawing dramatically in, in that policy,
• 38:34
  depending on which party holds the presidency.
• 38:38
  And that is, you know, crazy from all sorts
• 38:43
  of perspectives, not least of which is
• 38:45
  that the typical investment horizon you're,
• 38:47
  you're looking at for the power sector is at least
• 38:50
  30 or 40 years.
• 38:51
  So having policy change every four to eight is, is really
• 38:58
  creates a very chaotic situation.
• 39:00
  And I think in contrast to that, you know, as,
• 39:03
  as we talked about and as, as Joanna is really an expert in,
• 39:07
  you know, China's kind of
• 39:11
  policy stance with respect to particularly wind
• 39:14
  and solar has been, you know, very clear
• 39:16
  and very consistent for, for at least 20 years.
• 39:20
  And that, that contrast, you know, I think explains some of,
• 39:24
  of, of why we've gotten to this current point in time.
• 39:28
  That being said, I mean, I do think it's also important
• 39:30
  to keep in mind that like, just given the relative levels
• 39:34
  of development that we're talking about, you know, the US
• 39:38
  energy system was really built out, you know, in a period
• 39:41
  of complete fossil fuel dominance.
• 39:45
  China's was built out in a period of,
• 39:47
  of much greater transition.
• 39:50
  And so, you know,
• 39:51
  and Joanna also talked about leapfrogging, that's another,
• 39:53
  if I could put like another phrase alongside, you know,
• 39:57
  involution, it would probably be that leapfrogging,
• 40:00
  because that's always been a really important part of
• 40:04
  China's kind of economic planning and,
• 40:07
  and strategy is this concept of we're, you know, we need
• 40:10
  to catch up, but in the process of catching up
• 40:13
  with the developed world, we can also leapfrog ahead.
• 40:17
  And that was really the, the underlying rationale for
• 40:20
  that investment
• 40:21
  and that policy consistent, that consistent commitment
• 40:25
  to development of, of clean energy sectors.
• 40:29
  So in that sense,
• 40:31
  like I think you can make some reasonable arguments
• 40:33
  that like what has worked, you know,
• 40:36
  for China may not necessarily work for the us
• 40:40
  and that in fact, you know,
• 40:41
  we may be better off thinking about the next leapfrog
• 40:45
  over wind and solar.
• 40:47
  And in that respect, you know, I do think in addition
• 40:50
  to nuclear, which has gotten a lot of attention,
• 40:53
  and I think rightly so as kind of an area that, that we're,
• 40:56
  we do still see a lot
• 40:58
  of us policy support enhanced geothermal
• 41:02
  is, is interesting.
• 41:04
  This is basically, you use kind of fracking style techniques
• 41:08
  to drill much deeper, therefore produce much more heat
• 41:13
  and much more energy from geothermal processes than has been
• 41:18
  possible in the past.
• 41:19
  Not price competitive now, probably won't be for some time,
• 41:23
  but it could be a really interesting solution
• 41:25
  for pretty big parts of the us.
• 41:29
  And again, that's an area in which, you know, you,
• 41:32
  the US tech, you know, firms do have a lot of the key ip,
• 41:35
  it's a, a set of technologies for fracking
• 41:38
  that we know very well that's already deployed.
• 41:40
  And in that sense, like I think you can make a reasonable
• 41:43
  argument that maybe it does make more sense to invest,
• 41:46
  you know, in that in terms of public policy support
• 41:51
  than in, you know, solar, which as Joanna said, you know,
• 41:54
  it's hard to imagine competing
• 41:57
  with Chinese firms on cost ever in Polysilicon.
• 42:01
  I guess the last maybe point though, trying
• 42:04
  to come full circle is that I think probably for any
• 42:07
  of us here, you know, you know, it, it, it,
• 42:11
  it doesn't seem like a great idea
• 42:13
  to just like give up on wind and solar and EVs though,
• 42:17
  because those are such foundational parts of, you know, the,
• 42:23
  the energy transition
• 42:24
  and what will, what will happen irrespective of what,
• 42:28
  you know, us executive decision making happens.
• 42:32
  So to kind of, you know, do things that are actively hostile
• 42:36
  to the growth
• 42:38
  of those sectors in the US seems really self-defeating.
• 42:42
  - Yeah. Yeah, I think that's, I think that's a fair,
• 42:45
  very fair, very fair statement.
• 42:47
  So it will be interesting,
• 42:48
  and I, I appreciate your optimism, Joanna, about the sort
• 42:52
  of openness of the administration,
• 42:55
  at least on the battery technologies.
• 42:56
  And, you know, geothermal, I have to say, I'm on the board
• 42:59
  of my college Scott, which is close to Penn Swarthmore, and
• 43:04
  - Yeah, working - In geothermal,
• 43:06
  - I, I've, I've seen it, yeah.
• 43:07
  - A buy-in for a solar, you know, plant too,
• 43:11
  just an offset thing that we're doing.
• 43:12
  So, you know, it's very exciting.
• 43:15
  I mean, it's, it digs up a lot of ground, it makes a lot
• 43:17
  of mess, but in the end, you know,
• 43:19
  it just takes a little bit of strategic vision
• 43:21
  and a little bit of a sense of longer term planning.
• 43:24
  And I think you really do come out pretty far ahead,
• 43:26
  you know, over the long run.
• 43:28
  So, but,
• 43:30
  but you have to have that, that mindset, right,
• 43:33
  to think more than, you know, a year or two out.
• 43:37
  And I think that is what China, as you suggest, is
• 43:40
  what China has in spades.
• 43:41
  And, and we, with our electoral system, you know, it's,
• 43:45
  it's more difficult to maintain.
• 43:47
  All right, let's, let's go to climate change
• 43:50
  and sort of, Scott, you let us off
• 43:52
  by talking about the water issues in climate in China,
• 43:55
  but let's just take it from the position of China as both
• 43:59
  what we've already discussed this, you know,
• 44:02
  incredible machine manufacturing machine in the,
• 44:06
  in the clean energy space,
• 44:07
  and also, you know, in terms of its own deployment
• 44:11
  of clean energy domestically really doing, you know,
• 44:14
  something pretty phenomenal,
• 44:15
  but still the largest consumer of coal
• 44:18
  and largest contributor to global climate change.
• 44:22
  I'm not gonna say, how do you reconcile those two things?
• 44:25
  It's easy to see how they reconcile them,
• 44:27
  you know, they just do both.
• 44:28
  But, but what do you think this means?
• 44:30
  Like what do you see as the trajectory?
• 44:32
  China has put out some new, you know, target,
• 44:37
  you know, for, you know, carbon emissions.
• 44:42
  It wants to be seen as a leader in global climate change.
• 44:45
  Does it merit that title, you know, of,
• 44:49
  of leader in climate change?
• 44:50
  How do you think about China in that space today?
• 44:55
  Joanna, why don't we start with you?
• 44:57
  - Sure. Well, you know, I, I think that this is a,
• 45:00
  a complex area and I,
• 45:01
  and I appreciate sort of the nuance, right, to bring
• 45:03
  to this question of is China climate leader, right?
• 45:07
  I think it's really easy to sort of say, well, you know,
• 45:09
  we know China's the largest emitter in the world.
• 45:11
  We know it's, it's still reliant on coal,
• 45:14
  but we also know, you know,
• 45:15
  China builds a lot of coal plants.
• 45:17
  It doesn't need, many
• 45:19
  of them are running at very low utilization rates.
• 45:21
  And, you know, more important is the overall demand trend
• 45:24
  trend, which does appear to be slowing down.
• 45:27
  There may even be an absolute decline in coal use this year.
• 45:31
  Most importantly, I think we're seeing a steady decline in
• 45:34
  the share of coal in electricity generation
• 45:36
  as renewables are now able
• 45:39
  to meet all new electricity demand.
• 45:40
  And that's new, you know, that's a new trend in China.
• 45:44
  And so that's only going to, you know, continue with the,
• 45:47
  the, the big targets
• 45:48
  that have been put forward on renewables.
• 45:51
  You know, I think we're also seeing somewhat
• 45:52
  of a shift in narrative among China's leadership.
• 45:56
  You know, you mentioned sort
• 45:57
  of recent language from Xi Jinping, you know,
• 46:00
  I think over the last few years there was a lot
• 46:02
  of concern in the climate community that there was this sort
• 46:05
  of return to coal happening on energy
• 46:08
  security grounds, right?
• 46:09
  In, in part, in response to some blackouts.
• 46:12
  And, but recently Xi Jinping stated that, you know,
• 46:15
  energy security depends on developing new energy.
• 46:19
  And this is, I think a again, is somewhat of a new narrative
• 46:22
  and a positive shift in, in the rhetoric, recognizing that
• 46:26
  of course, actually, you know,
• 46:27
  there is no more secure energy source than renewables.
• 46:31
  It's inherently domestic, right?
• 46:33
  And, you know, and I think when we talk about climate
• 46:35
  leadership from China, you know, it's a complex term, right?
• 46:40
  And there's more that China needs to do
• 46:42
  to reduce its overall emissions.
• 46:43
  But the role that China's playing, as we've already,
• 46:46
  you know, started to talk about in shaping the
• 46:49
  decarbonization pathways of the, you know, the global south,
• 46:52
  the emerging economies, developing world is
• 46:54
  arguably the most important signal
• 46:56
  of their climate leadership today.
• 46:58
  You know, not long ago, you know,
• 47:01
  I would argue China was sort of hiding
• 47:03
  behind other developing countries, right?
• 47:04
  Of course. Saying, you know, they had no obligation
• 47:07
  to reduce emissions.
• 47:09
  We've all followed this, right?
• 47:10
  And, and you know, now we really see them positioning
• 47:12
  themselves as a leader.
• 47:14
  You know, if not a global leader, definitely a leader
• 47:17
  of the global south South where from a climate perspective,
• 47:20
  this is where the majority of future emissions, you know,
• 47:23
  are gonna be coming from.
• 47:24
  So, you know, I think we saw, you know,
• 47:27
  over the last decade, China really using the Belt
• 47:30
  and Road initiative and other mechanisms
• 47:32
  to essentially build coal plants abroad, right?
• 47:35
  And this was a huge problem
• 47:37
  because you had China sort of signaling to the rest
• 47:40
  of the world, you know, do what we did and,
• 47:42
  and use a lot of coal.
• 47:43
  But now I think they're, they're sort
• 47:45
  of selling their more like clean energy roadmap, right?
• 47:49
  To the developing world.
• 47:52
  You know, I wrote in my last book like about how Denmark,
• 47:54
  you know, sort of sells their energy transition strategy
• 47:56
  as part of their, their climate diplomacy.
• 47:58
  Now you have China doing the same thing where, you know,
• 48:02
  you see this real change in, you know,
• 48:05
  and how they're, they are, you know,
• 48:08
  exporting to other countries.
• 48:09
  And, you know, even this is now I think starting
• 48:12
  to translate into shifts in domestic
• 48:16
  policy in these countries.
• 48:17
  Like there was a report that just came out showing
• 48:19
  that new coal plant proposals outside
• 48:22
  of China are at an all time low.
• 48:24
  There've been announcements of project cancellations in
• 48:27
  Thailand, Kenya, Uzbekistan, you know, other countries.
• 48:31
  And again, this isn't just
• 48:32
  because of, you know, what China's doing,
• 48:33
  but it, you know, they've played this really
• 48:35
  important role, right?
• 48:36
  In bringing down the cost of these technologies.
• 48:39
  As we talked about, you know, there is a, a calculation,
• 48:43
  which I, I've been sort of arguing for years,
• 48:45
  that China's clean energy technology exports last year alone
• 48:49
  reduce global emissions by 1%, right?
• 48:52
  So we have to look at both sides of
• 48:54
  what they're doing here, right?
• 48:56
  And, and so it's gonna be really important the role
• 49:00
  that China ends up playing in helping other emerging
• 49:04
  and developing countries, right,
• 49:05
  with their low carbon transition.
• 49:07
  I worry that the geopolitical tensions
• 49:10
  that we've been discussing, you know, particularly
• 49:12
  between the US and China
• 49:13
  and others, will have, you know,
• 49:15
  really detrimental effects on that sort of longer term
• 49:20
  trajectory, right?
• 49:21
  And, and particularly the impacts on developing countries
• 49:24
  being able to afford clean energy technologies, right?
• 49:28
  As, you know, something like the RA is trying to bring back,
• 49:32
  you know, manufacturing to the United States
• 49:34
  that will increase costs
• 49:36
  of these technologies globally, right?
• 49:37
  So we have to think of the global impacts
• 49:39
  of any industrial policy strategy in,
• 49:43
  in this country or elsewhere. I think,
• 49:45
  - Yeah, I would just note I really important points.
• 49:47
  I, I do think there's a, a little bit of a chicken
• 49:50
  and egg on the, and the issue of the sort of cancellation
• 49:53
  of coal projects and, and China's, you know, pullback
• 49:57
  because of course, I think it was 20 22, 20 23, China said,
• 50:01
  okay, no more exporting coal fire power plants
• 50:04
  through the Belt and Road initiative.
• 50:05
  But actually if you look, you'll see
• 50:07
  that many countries prior to that, you know,
• 50:12
  that signal were already canceling the
• 50:14
  coal fire power plants.
• 50:15
  So a lot of the push I think came and the,
• 50:18
  and why China made that move was not only pressure from,
• 50:21
  you know, the US and others, but was actually
• 50:24
  because other countries were saying,
• 50:26
  we don't want Bangladesh.
• 50:27
  Actually Kenya was before right?
• 50:29
  Protest around a, a coalfire power plant
• 50:32
  that China was trying to build in a,
• 50:34
  with the Kenyan support, don't get me wrong,
• 50:35
  wasn't imposing the, the Coalfire power plant, but,
• 50:38
  but protest, you know, in a, I think it was either in
• 50:41
  or near a World Heritage site, you know?
• 50:43
  So I think that actually China got the signal from many
• 50:47
  emerging economies that they did not want coal fired power
• 50:50
  plants and that helped push Xi Jinping.
• 50:52
  Maybe he was already moving in that direction,
• 50:54
  but I think it helped push Xi
• 50:55
  - Jinping.
• 50:56
  No, I think that's right. I mean, it was 2021 and,
• 50:58
  and I think that is right,
• 50:59
  but you know, with that said, right, like there, they,
• 51:02
  these countries were still building coal plants
• 51:04
  and there's sort of a variety of uses, right?
• 51:07
  Including like captive coal
• 51:08
  and other areas that are sort
• 51:09
  of being less addressed by this.
• 51:11
  But at the end of the day, right, it's about economics
• 51:13
  and there's just not a lot of economic rationale
• 51:16
  to invest in a 50 year coal plant, you know,
• 51:20
  given this, oh, Joanna,
• 51:21
  - Aren't we doing it anyway?
• 51:23
  So I'm sure there must be,
• 51:25
  - Except in the United States where of course we're trying,
• 51:27
  we're trying to revitalize this in important.
• 51:32
  - Scott, you wanna add anything to China as a,
• 51:35
  as a climate leader?
• 51:38
  - Well, you'll note how qualified the statement
• 51:41
  that I I'm gonna make is,
• 51:43
  but it's, it's something I've, I have repeated fairly often,
• 51:49
  so I I I think China has probably done more
• 51:54
  than any other, you know,
• 51:56
  large economy at a comparable stage of, of development
• 52:01
  to reduce the i it its impact on climate change.
• 52:05
  However, there are a couple of, you know,
• 52:09
  really important aspects of that to keep, keep in mind,
• 52:13
  number one, China is a very carbon intensive
• 52:17
  economy, even relative to other developing economies.
• 52:22
  So it's carbon intensity is twice that
• 52:26
  of the, the kind of average for a couple reasons.
• 52:30
  One, as Joanna mentioned, you know,
• 52:32
  and I mean, as, as, as you have documented extensively too,
• 52:36
  Liz China uses a ton of coal.
• 52:39
  Chi coal has been 60% of China's electricity
• 52:44
  consumption for decades.
• 52:46
  And in fact, probably the best news on climate
• 52:49
  that we've had in a long time is simply that
• 52:51
  that percentage has decreased from 60% to 55%
• 52:56
  in the last 18 months.
• 52:58
  That alone, you know,
• 53:00
  is probably the best climate news we've had in a long time.
• 53:03
  And that just goes to show you, you know, how significant
• 53:06
  China's emissions are
• 53:07
  and how significant coal is to China's total emissions.
• 53:13
  It's also true that because China kind of even getting back
• 53:15
  to the first part of our conversation, China has such a kind
• 53:19
  of dominant position in manufacturing
• 53:22
  and the most heavy industrial sectors.
• 53:25
  That also means that its carbon intensity is higher than
• 53:28
  most other countries.
• 53:29
  I think Poland
• 53:31
  and South Africa are, are among the only ones
• 53:33
  that compare at least among large economies
• 53:36
  and the, the carbon intensity.
• 53:40
  So it has a very kind of high carbon economic model,
• 53:43
  if you wanna think of it that way.
• 53:45
  And that is, that's very problematic, obviously.
• 53:49
  So if to the extent that China, you know, could be called a,
• 53:52
  a climate leader, it really has to do something about that.
• 53:55
  And I do think, you know, as we've talked about,
• 53:58
  the massive renewable capacity growth certainly
• 54:03
  gets you further to that goal,
• 54:04
  but it's pretty clear to me
• 54:06
  that China's energy policy is really an all
• 54:09
  of the above one.
• 54:11
  You know, you're gonna have a, an energy mix
• 54:13
  that includes fossil fuels, you know,
• 54:15
  well into the foreseeable future.
• 54:18
  Worth noting that China's long-term decarbonization net zero
• 54:22
  target is a, a net target
• 54:25
  and includes sinks like a forestation
• 54:30
  that, you know, we don't, we don't yet know exactly how net
• 54:34
  that, you know, that will be in 2060.
• 54:37
  So it kind of really depends how you define leadership.
• 54:40
  But certainly China has, you know, a long way to go to,
• 54:44
  to kind of do what it would need to do to keep us on track
• 54:48
  for our, our global climate goals.
• 54:51
  And maybe just to complete that statement,
• 54:54
  'cause I do think it's significant,
• 54:55
  China did recently redu release,
• 54:58
  its intended nationally determined contribution.
• 55:00
  Joanna and I were at a meeting a few weeks ago where
• 55:03
  that was the topic of conversation.
• 55:04
  So we may wanna briefly, you know, kind
• 55:07
  of get into her perspective on, on it.
• 55:09
  But just very briefly, the, the headline from that,
• 55:12
  that commitment was that China will reduce its emissions
• 55:17
  by seven to 10% by 2035,
• 55:21
  economy wide, all greenhouse gases.
• 55:24
  That's actually the first time that China has pledged
• 55:26
  to specifically reduce its emissions.
• 55:30
  So a specific emissions reduction target
• 55:32
  that's really significant.
• 55:34
  It is not in line with our kind of, you know,
• 55:37
  overall climate targets certainly of,
• 55:40
  of limiting global average temperature increase to well
• 55:44
  below 1.5 degrees,
• 55:46
  but it is very significant from a policy standpoint.
• 55:49
  So it's again, the, the, on the one hand, on the other hand,
• 55:53
  - Yeah, very important
• 55:54
  and really appreciate the nuance that both of you brought
• 55:57
  to answering that question.
• 56:00
  So we're almost out of time, unfortunately.
• 56:01
  So let me just ask you each to, to answer one question
• 56:05
  and that is, you know, if you had President Trump's ear
• 56:09
  and maybe one or both of you, you know, do have his ear,
• 56:12
  what what would you tell him to do in this space,
• 56:16
  either related to clean energy or climate
• 56:19
  or cooperation with China on climate?
• 56:22
  Like, what would be your number one, if you could just say,
• 56:24
  this is what you really should be doing,
• 56:27
  what would you suggest, Joanna?
• 56:31
  - I don't pretend to have his ear,
• 56:33
  but I, I would be happy to suggest, I mean,
• 56:37
  I think there's sort
• 56:38
  of the lowest common denomin denominator piece, which is
• 56:41
  what Scott just mentioned, that, you know,
• 56:43
  we are really shooting ourselves in the foot by sort
• 56:46
  of removing any, any, you know, progress,
• 56:51
  any support, any, and,
• 56:52
  and reversing any progress
• 56:54
  that we've made in the clean energy sectors
• 56:56
  that are gonna be globally, you know, necessary
• 57:01
  not just for a low carbon transition,
• 57:02
  but they're gonna be the, you know,
• 57:03
  most economically competitive sources
• 57:06
  of energy in the coming decades.
• 57:08
  You know, the cancellation
• 57:09
  of wind projects is just goes sort of against, you know,
• 57:12
  we've tried so for so long
• 57:13
  to get any inroads into the offshore wind space,
• 57:16
  for example, where the United States is just so far
• 57:19
  behind any country in the world, you know, we,
• 57:23
  we should be looking not just to cancel these things,
• 57:25
  but to manage them, you know,
• 57:26
  if there are true environmental impacts or other concerns.
• 57:30
  And I will say again, you know, again, this,
• 57:32
  this may sound naive,
• 57:33
  but I do think that we are running outta time
• 57:36
  to keep the US auto industry globally competitive.
• 57:38
  And the best way to do this is
• 57:40
  through some kind of deal with China.
• 57:43
  You know, I do, I know there's been a lot of, you know,
• 57:46
  rhetoric, again from the highest levels about, you know,
• 57:49
  not allowing the sharing of sensitive technology and,
• 57:53
  and sort of, you know, blocking
• 57:54
  what Chinese firms are allowed to do.
• 57:56
  But again, this is all up for negotiation
• 57:59
  and this is all part of, you know,
• 58:00
  China's leverage right now in this space.
• 58:03
  You know, all the Chinese companies I've spoken to,
• 58:05
  they want access to the US market,
• 58:08
  and I think there are, there are deals to be made
• 58:10
  that could benefit both sides.
• 58:13
  - Great. Scott, - In the interest of being as quick
• 58:16
  as possible, make fusion work, there is no panacea
• 58:21
  to, you know, averting dangerous climate change,
• 58:24
  but the closest thing to it would be
• 58:25
  getting commercial fusion.
• 58:27
  - And there are several US companies,
• 58:29
  small US startup companies
• 58:30
  with some pretty impressive people at the top of them
• 58:33
  who are working on this.
• 58:35
  So, all right, I think both excellent
• 58:38
  and positive recommendations to end our discussion.
• 58:42
  I really wanna thank both of you for sharing your, you know,
• 58:46
  deep, deep expertise and really thoughtful analysis.
• 58:50
  I've really enjoyed hearing both of your,
• 58:54
  your comments and your thinking.
• 58:58
  - Likewise. Thanks Liz.
• 58:59
  - Yeah. Thanks for the great conversation.
• 59:02
  - So if you enjoyed this podcast
• 59:03
  and wanna hear more reason, discourse
• 59:05
  and debate on China, I encourage you to subscribe
• 59:07
  to China Considered via the Hoover Institution YouTube
• 59:10
  channel or podcast platform of your choice.