In Short : There are calls for the United States to collaborate with technology leader China on transitioning to clean energy. This collaboration would enable the two major economies to pool resources, share knowledge, and accelerate the development and adoption of renewable energy technologies. Working together, the US and China can foster innovation, drive down costs, and enhance the global transition to clean energy. Such a partnership would not only benefit both nations but also contribute significantly to the global fight against climate change.
In Detail : The United States can’t be protectionist when it comes to the electric vehicle and EV battery industries, which are now dominated by China, analyst warns.
A panel discussion on the one-year progress of the Inflation Reduction Act, President Joe Biden’s signature climate legislation
A year after the passage of the Inflation Reduction Act – which contains over US$300 billion in incentives and tax breaks to increase domestic manufacturing of electric vehicles and self-reliance in clean energy by 2032 – experts say that achieving the ambitious target requires working with China despite calls for cutting all cords with the world’s EV giant.
“The Chinese are ahead of us in technology, they have production capacity that we have not built, they have control over supplies that we do not have. And they know how to do it, they put the whole system together,” said Kenneth Lieberthal, a senior fellow emeritus in the foreign policy programme at Brookings Institution, a think tank in Washington.
He spoke on Wednesday during a Brookings panel discussion on the impact and progress of the Inflation Reduction Act (IRA), US President Joe Biden’s signature climate legislation. Lieberthal warned that for “the US to go in and not deal with Chinese … is simply to delay our transition and our capacity to deal with these problems on our own”.
He said the Biden administration “recognises very clearly” that we have to develop our own capabilities. “But it’s going to take time.”
China, a global leader in EV technology and battery production capacity, extracts more than 75 per cent of the world’s graphite and processes over 80 per cent of critical minerals like lithium, cobalt and graphite supplies – all essential to EV battery manufacturing.
The official Biden chose to oversee the execution of the IRA, John Podesta, pitched the law’s continuing progress on Wednesday. He said the US was in a “completely different position” than when Biden took office, citing more than US$135 billion in investment pledges by the private sector in the EV supply chain.
While Podesta acknowledged China’s dominance in the supply chains for “upstream clean energy technologies” as a result of the US “ceding ground to them for decades, letting jobs and factories go overseas”, he said that Washington was “rewriting the playbook” but has “more ground to cover”.
“That’s why President Biden is investing in America,” he said. “It’s why we’re working with our allies around the world, from the EU to South Korea, to secure reliable supplies of critical minerals.”
But citing opposition to US automaker Ford’s tech licensing deal with China’s CATL and concerns raised by US allies over the IRA, Lieberthal cautioned against protectionism.
“If the Chinese have the capacity to dominate these industries, and we’re just going to sit there and say, ‘Well, we can’t deal with any of them. We’re going to have to do it on our own and we’re going to be fairly protectionist in the way we approach this,’ so even our friends and allies have concerns about how we’re doing it. I think that multiplies our problems.”
At a time when competition between Beijing and Washington has narrowed the scope of cooperation, Biden officials have often listed climate as an area where collaboration still seems probable.