In the US and Europe, the benefits of renewable energy are predominantly seen as environmental. Energy from the wind and sun can offset the need to burn fossil fuels, helping to mitigate climate change.
However, in China and India, renewable energy is viewed in a remarkably different fashion. The relatively rapid transition away from fossil fuels in both countries is driven not so much by concerns about climate change as by the economic benefits renewable energy sources are perceived as conveying.
Indeed, while the economic benefits of renewables can be attractive to advanced economies such as Germany or Japan — both of which are rapidly moving away from fossil fuels — the advantages for emerging industrial giants are overwhelming. For India and China, an economic trajectory based on fossil fuels could spell catastrophe, as efforts to secure enough for their immense populations ratchet up geopolitical tensions. Aside from increased energy security, a low-carbon economy would promote domestic manufacturing and improve local environmental quality by, for example, reducing urban smog.
Illustration: Kevin Sheu
To be sure, fossil fuels conferred enormous benefits on the Western world as it industrialized over the past 200 years. The transition to a carbon-based economy liberated economies from age-old Malthusian constraints. For a group of select countries representing a small slice of the global population, burning fossil fuels enabled an era of explosive growth, ushering in dramatic improvements in productivity, income, wealth and standards of living.
For much of the past 20 years, China and India led the charge in claiming the benefits of fossil fuels for the rest of the world.
However, recently, they have begun to moderate their approach. As their use of fossil fuels brushes up against geopolitical and environmental limits, they have been forced to invest seriously in alternatives — most notably, renewables. In doing so, they have put themselves in the vanguard of a planetary transition that in a few short decades could eliminate the use of fossil fuels altogether.
The economic arguments advanced against renewable sources of energy — that they can be expensive, intermittent, or not sufficiently concentrated — are easily rebutted. In addition, while renewables’ opponents are legion, they are motivated more by interest in preserving the “status quo” of fossil fuels and nuclear energy than by worries that wind turbines or solar farms would blot the landscape.
In any case, those wishing to halt the expansion of renewables are unlikely to triumph over simple economics. The renewable energy revolution is not being driven by a tax on carbon emissions or subsidies for clean energy; it is the result of reductions in the cost of manufacturing that is soon to make it more cost-effective to generate power from water, wind and the sun than from burning coal.
Countries can build their way to energy security by investing in the industrial capacity needed to produce wind turbines, solar cells and other sources of renewable energy at scale. As China and India throw their economic weight into the renewables industrial revolution, they are triggering a global chain reaction known as “circular and cumulative causation.”
Unlike mining, drilling, or extraction, manufacturers benefit from learning curves that make production increasingly efficient — and cheaper. Investments in renewable energy drive down the cost of their production, expanding the market for their adoption and making further investment more attractive. From 2009 to last year, these mechanisms drove down the cost of solar photovoltaic energy by 80 percent and reduced the cost of land-based wind power by 60 percent, according to Lazard’s Power, Energy & Infrastructure Group.
The impact of the rapid uptake in renewable energy could have consequences as profound as those unleashed by the Industrial Revolution. In the 18th century, the economies of Europe and the US initiated the transition to an energy system based on fossil fuels without fully understanding what was happening. This time, we can see the way things are changing and prepare for the implications.
For the moment, the outlook appears promising. Efforts to reduce carbon dioxide emissions might not be the prime driver of the renewable energy revolution, but it is very possible that without the revolution, efforts to minimize the impact of climate change would never succeed. If we are able to avoid the worst dangers of a warming planet, we might have India and China to thank for it.
John Mathews is a professor of strategy at the Macquarie Graduate School of Management in Sydney.
Copyright: Project Syndicate
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
Former president Ma Ying-jeou’s (馬英九) trip to China provides a pertinent reminder of why Taiwanese protested so vociferously against attempts to force through the cross-strait service trade agreement in 2014 and why, since Ma’s presidential election win in 2012, they have not voted in another Chinese Nationalist Party (KMT) candidate. While the nation narrowly avoided tragedy — the treaty would have put Taiwan on the path toward the demobilization of its democracy, which Courtney Donovan Smith wrote about in the Taipei Times in “With the Sunflower movement Taiwan dodged a bullet” — Ma’s political swansong in China, which included fawning dithyrambs