Reaching global climate goals through cooperation between the US and China – the two largest global polluters – has intuitive appeal. However, two intense geopolitical rivals negotiating a binding agreement that conflicts with their economic interests is not a viable strategy. Despite the clear infeasibility of this approach, it is the present US policy. While cooperation may be the more civil approach, there is no virtue in pursuing a high-minded avenue that is likely to fail. Instead, competition between the US and China on green energy would align with US security interests and public opinion, enjoy bipartisan legislative support, and foster the government funding necessary to reach climate goals.

This alternative approach of making green energy a theater of competition with China allows cleantech to be recast as security spending. This would bring a windfall of federal subsidies and grants for green energy. Reframing green energy as a China-focused national security issue aligns climate action with the present anti-China political sentiment held by the majority of the American people and their elected officials, thereby creating an avenue for popular and bipartisan support of climate action.

Former US Climate Chief John Kerry stated that, after decades of hard-fought progress in cooperation and negotiation efforts, “point blank: we are heading towards about 2.5 degrees right now.” Climate cooperation has failed to set the world on course to meet the Paris Accords’ agreed-upon goal of 1.5 degrees of warming, or even the conservative fall-back goal of 2 degrees. 

While climate cooperation has succeeded in developing shared climate goals, Kerry laments its inadequacy as a tool for actually pushing countries to meet them. UCLA Law professor Alex Wang explained that “climate action has shifted from framework building (e.g., the Paris Agreement) to implementation. The premium is now on problem-solving and on-the-ground action.” The necessary cooperative agreements are largely complete; a shift to competition is now needed to incentivize nations to comply with those agreements. 

Dovetailing an issue with defense or US prestige has historically allowed it to override fiscal concerns and receive prodigious funding. This dynamic drove the science spending sprees of the Space Race and Manhattan Project. Today, prestige-based competition drives the funding of non-applied science in both the US and China. Vanderbilt Physics Professor Robert Scharrer explains, “China has made a significant investment in recent years in pure scientific research. I can see it in my own field of cosmology. I think this is partly out of a desire to boost national prestige.” Emphasizing that competition overshadowed economics, Scharrer stated, “This research is unlikely to have short-term practical benefits, but it does show that China has ‘made it’ as a great power.” If climate progress becomes a point of national prestige, competition will drive the US and China to fund the energy transition and meet the world’s climate goals.

Presently, the US Treasury has an opportunity to pursue this positive form of competition with China. Both the US and China considerably subsidize their respective green tech sectors. However, in what Scott Lincicome, a researcher at the Cato Institute called a “do as I say not as I do” stance, Treasury Secretary Janet Yellen recently called upon China to reduce its green energy subsidies. Yellen stated that the overproduction of green technologies “distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world.” While there is a measure of hypocrisy in Yellen’s statements, the scale of the Chinese subsidies constitutes an overstep, pushing other global green energy companies out of the market in a thrust for market dominance. This over-subsidization curbs the global cleantech competition that drives innovation, harming climate progress. 

In a public statement on the issue, Sec. Yellen implied that should China fail to accede to US demands (as they almost surely will), biting trade restrictions would follow. For some time, the Biden administration has been considering restructuring $300 billion worth of US tariffs to target China’s green technology sector. Yellen may call upon this injurious measure following China’s refusal to step down.

Responding to Chinese subsidies with tariffs would constitute damaging climate competition. Such policies will hinder global climate progress by decreasing demand for green tech, escalate trade war tensions with China, and directly contradict the Biden administration’s stated aim of increasing green energy adoption globally. 

However, the Chinese overstep of excessive subsidization provides the Treasury an opportunity to develop healthy climate competition. As China threatens to become the hegemon of the green energy market, the Treasury (which has significant sway in budgetary decisions) could call for an increase in green energy funding or reciprocal subsidies as a matter of national security. By choosing harmful means of competition as the US response, Yellen would be squandering an enormous opportunity for climate progress.

The Treasury may hesitate to take the healthy competition pathway for fear of the economic inefficiencies caused by keeping green tech prices artificially low. However, healthy competition is a better avenue than tariffs for US security. National security could never be guaranteed if China held significant leverage over global cleantech – the energy of the future. While both tariffs and domestic funding assist in mitigating the US’ increasing dependencies, only domestic green energy funding would develop greater US dominance of the global green tech market. Healthy competition, through increased domestic funding of green energy, simply does more to guarantee long-term US energy security.

Healthy competition will also accelerate climate progress – a benefit for the US in its own right. By driving down green energy prices, healthy competition would effectively subsidize the global energy transition, encouraging rapid, widespread adoption of green tech. Healthy competition provides a means for China and the US to compete for control of the global green energy market without hindering climate progress.

Climate competition does not mean forsaking cooperation as long as the US pursues a path of healthy, rather than harmful competition. Leaning on competitive domestic subsidies and research programs rather than tariffs or other trade war tactics would preserve positive enough relations for cooperative efforts to continue even with increased competition. 

The Treasury should call for greater subsidies of domestic green tech in the name of maintaining economic competitiveness with China. Further, US legislative bodies should pass more legislation like the 2021 US Innovation and Competition Act, which bolstered technological competitiveness with China through research funding, including significant funding for green tech. The Act received bipartisan support in the Senate. 

Measures that securitize domestic green energy development already enjoy bipartisan support due to Republican’s desire to be “tough” on China, and due to the job creation energy sector growth fosters in conservative states. Many Republican states depend upon manufacturing jobs disappearing overseas, often to China. Increasing funding of domestic green energy would create a new, necessarily American frontier of heavy industry. The success of critical minerals producer Nyrstar exemplifies the bipartisan appeal of climate competition. Despite Nyrstar being a green energy company, its Tennessee factory was facilitated by the state’s Republican representatives.

I spoke with Gytha Steenvoorden, Global Head of Communications for Nyrstar, whose primary zinc smelting facility is in Clarksville, Tennessee. Nyrstar, Gytha explained, is “currently the only primary zinc producer in the US” but its minerals are “critical to US national defense, high-tech industries, and the green transition,” and are used in chips, semiconductors, high-performance solar panels for satellites, and electric vehicles. The Clarksville plant is, “enhancing US national security and stimulating domestic production of products that are currently mostly imported from China,” Gytha describes. 

Beyond the security benefits, Nyrstar serves as an “integral part of the local Clarksville-Montgomery County community,” Gytha explains, and “Millions of dollars have been invested” in the Clarksville region “and the smelter has provided jobs for local residents.” 

Nystar’s operations have created green jobs in red Tennessee. Rep. Jay Reedy, a Republican member of the Tennessee House of Representatives, was the primary supporter of the Nyrstar plant. He was driven by a desire to challenge China and to ensure the economic benefits weren’t given “to another country.” 

Further, a strong clean-energy sector would give American diplomats the leverage to shame China for its laggard progress. American diplomats have already used the Inflation Reduction Act – the largest climate bill in history – to cast China’s many climate failings into relief against American progress.

Healthy competition between the US and China on green energy would support US domestic manufacturing and align with US security interests. These factors make it a politically viable avenue for federal climate action that can be pursued in the present. There is simply no other realistic means of garnering the requisite government support for green energy necessary to meet the world’s climate goals. 

Picture by Office of US Treasury Secretary via Wikicommons