opinion | Climate progress depends on competition between the US and China – Community News
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opinion | Climate progress depends on competition between the US and China

If you’re in the market for an electric car today, chances are you’re buying a Tesla.

Fast forward a few years, and this may no longer be true. Traditional automakers like General Motors and Toyota — as well as a slew of Chinese companies like BYD, Nio, Xpeng and Li Auto — are making their own electric models available to American consumers.

With more than 500 manufacturers in the fast-growing electric car market, cross-border competition is only getting tougher. While Tesla’s market share of all-electric vehicles in the US was 79 percent in 2020, it could drop to 56 percent by the end of the year. Meanwhile, several Chinese companies are expected to announce major expansion plans to build more electric vehicle factories. It took Tesla 12 years to produce 100,000 vehicles. Nio and Xpeng reached that milestone in half the time.

But what could become a headache for Tesla CEO Elon Musk is good news for international climate goals as well as Sino-US diplomacy. Despite the recent fanfare on climate cooperation that emerged from the Glasgow talks last month, it is: contest – and not collaboration – between US and Chinese companies that will be the real driver of reduced greenhouse gas emissions around the world.

At the COP26 conference in November, the United States and China, the world’s two largest polluters, issued a joint statement pledging to tackle the climate crisis bilaterally. The countries listed a number of areas in which they plan to work together, including green design, decarbonization and electrification of parts of the economy and the societal benefits of the clean energy transition. When Presidents Biden and Xi met virtually in November on the heels of the Glasgow conference, they reaffirmed their intention to work together on climate change.

Policy experts were quick to applaud these commitments to increased cooperation, especially when significant ideological differences still hamper the US-China relationship over human rights, the legal status of Hong Kong and Taiwan and the protection of intellectual property. In general, the US and China have a hard time finding common ground.

So the climate seems like a rare opportunity to work together towards common goals. However, this emphasis on cooperation falls short.

Crucially, the two countries have agreed on certain climate goals, including trying to keep the global average temperature increase at 1.5 degrees Celsius and reduce methane emissions. However, most of the actual transition – including building renewable energy plants, selling electric vehicles and insulating buildings – will be done by private companies. and companies compete with another.

Collaboration is therefore not the key to reducing emissions to zero. And indeed, cooperation without competition has its limits. For example, the bilateral Clean Energy Research Center under the Obama administration has generated a lot of good research and good ideas. But without greater private sector involvement, much of this progress — including work on carbon capture and storage — remained in the lab, underfunded to drive demonstration projects and private sector competition.

The best analogy to illustrate an efficient network of competing firms operating under international agreements and ultimately arriving at an outcome beneficial to all could be the World Trade Organization. There the member states work together in the sense that they draw up global trade rules. Companies then compete in various sectors, from electric vehicles to telecommunications, for market share around the world.

Undoubtedly, one of the WTO’s greatest challenges has been the friction between the United States and China over the interpretation of trade rules. Nevertheless, the pledges coming out of Glasgow could serve as a blueprint for a set of standards that both countries would feel pressured to follow. The private sector would then compete to sell the best green energy options at the best price.

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There is evidence of this competitive advancement in the electric vehicle market. Cross-border competition between manufacturers such as Tesla and BYD offers consumers more choice and drives prices down over time.

And the electric vehicle market is bigger than just cars. China has been leading the way in popularizing electric bicycles with leading start-ups such as Bafang and Xiaomi. In response, a growing number of American and European companies have jumped into this space, sparking a steady stream of improvements such as lightweight, off-road and folding bike designs. The market also includes battery manufacturing and charging station design — two sub-industries where companies like GM and Tesla are now trying to bring production back to the United States.

US participation in the global EV market is encouraging. Unfortunately, it is the exception rather than the rule. While the United States has led the way in developing renewable technologies, it has not been consistent in providing the tax and other financial incentives necessary to support its steady growth in the market. As a result, China, South Korea and many European countries have caught up in some renewable technologies as US progress has slowed.

President Biden’s Build Back Better plan is trying to change this. It provides for clean energy demand creation through both regulatory requirements and procurement decisions. While aspects of the president’s climate regulations await the Senate vote, some key pieces of the infrastructure bill signed in November — including financial support for more electric vehicle charging stations, electrical grid upgrades and rail improvements — are now law. This puts US companies committed to green technology in a better position to compete with their Chinese rivals. Consistent, long-term support for projects in the United States is key to building U.S. industrial capacity in other renewable energy markets, such as wind and solar.

Competition does not mean balancing on the edge of conflict. The key to this process will be that the United States respect its rivals, including China. It is also important to give credit where credit is due. China has greatly reduced both coal use and air pollution over the past decade. The reforestation efforts are even more impressive: China’s forest cover has grown to more than 23 percent today, from just 8.6 percent in 1949.

Of course there is so much more to do. But things are looking good and responsible competition is our best hope for global climate progress.

Deborah Seligsohn is an assistant professor in the political science department at Villanova University, a senior associate in Chinese business and economics at the Center for Strategic and International Studies, and a Woodrow Wilson Center China Fellow.

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