October 15, 2017
China is winning the future. Here’s how.
by Dr. Fareed Zakaria@www.cnn.com/Fareed
This week, the front page of the New York Times described the Trump administration’s repeal of the Clean Power Plan, the Obama administration’s attempt to slash carbon emissions from coal-fired power plants. “The war on coal is over,” declared Environmental Protection Agency Administrator Scott Pruitt. Right under that article was an article from halfway around the world detailing China’s massive new investment in electric vehicles, part of Beijing’s determination to dominate the era of clean-energy technology. It is a tale of two strategies.
The Trump administration has decided to move into a new century: the 19th century. Coal has been in decline for at least seven decades. In 1950, it accounted for half of all U.S. electricity generation. It is now down to a third. Additionally, massive automation of mining has meant that the jobs in the industry are disappearing, down from 176,000 in 1985 to 50,000 in 2017. Machines and software are replacing coal miners just as surely as in other industries. Demand for coal is weak because of alternatives, chiefly natural gas. In the past couple of years, many of the top American coal companies have been forced to declare bankruptcy, including the largest, Peabody Energy.
Despite President Trump’s policy shift, these trends are unlikely to change. Reuters found that, of 32 utilities in the 26 states that filed lawsuits over the Clean Power Plan, “the bulk of them have no plans to alter their multi-billion dollar, years-long shift away from coal.” The reason utilities are shedding coal is economics — the price of natural gas has plummeted in recent years, and its share of U.S. electricity generation has nearly tripled since 1990. In addition, costs are falling dramatically for wind and solar energy.
And, of course, coal is the dirtiest form of energy in use. Coal-fired power plants are one of the nation’s leading sources of carbon-dioxide emissions, and most scientists agree those emissions lead to global warming. They also cause terrible air pollution, with all its attendant health problems and costs.
China will plough 2.5tn yuan (£292bn) into renewable power generation by 2020, the country’s energy agency has said, as the world’s largest energy market continues to shift away from dirty coal power towards cleaner fuels.–The Guardian
That’s one of the reasons China, which suffers more than a million deaths a year because of poor air quality, is making huge investments in clean energy. The country has become one of the world’s leading producers of wind turbines and solar panels, with government subsidies enabling its companies to become cost-efficient and global in their aspirations. In 2015, China was home to the world’s top wind-turbine maker and the top two solar-panel manufacturers. According to a recent report from the United Nations, China invested $78.3 billion in renewable energy last year — almost twice as much as the United States.
Now Beijing is making a push into electric cars, hoping to dominate what it believes will be the transport industry of the future. Already China has taken a large lead in electric cars. In 2016, more than twice as many were sold in China as in the United States, an astonishing catch-up for a country that had almost no such technologies 10 years ago. China’s leaders have let it be known that by 2025 they want 20 percent of all new cars sold in China to be powered by alternative fuels. All of this has already translated into jobs, “big league” as President Trump might say: 3.6 million people are already working in the renewable-energy sector in China, compared with 777,000 in the United States.
China is still heavily reliant on coal, which it has in plentiful supply, and it has tried to find steady sources of other fossil fuels. It went on a shopping spree over the past two decades, making deals for natural resources and energy around the world, often paying at the peak of the commodities bubble in the mid-2000s. But over time, it recognized that this mercantilism was a bad strategy, tying Beijing up with expensive projects in unstable countries in Africa. Instead, it watched and learned from the United States as technological revolutions dramatically increased the supply and lowered the cost of natural gas and solar energy. China has now decided to put a much larger emphasis on this route to energy security, one that also ensures it will be the world’s leading producer of clean energy.
Trump has often talked about how China is “killing us ” and that he’s tired of hearing about China’s huge growth numbers. He should notice that Beijing is getting its growth by focusing on the future, the next areas of growth in economics and technology. The United States under Trump will be engaged in a futile and quixotic quest to revive the industries of the past. Who do you think will win?