In Their Own Words: The Global Green Race

For decades, climate policy was primarily environmental policy. At UN conferences, for example, countries negotiated emissions-reduction targets and timetables. In recent years, another part of climate policy has increasingly gained traction: innovation and industrial policy. As countries seek to develop, manufacture, and deploy low-carbon technologies such as solar photovoltaics (PV), onshore and offshore wind power, electricity storage, electric vehicles (EVs), and hydrogen power, climate policy has come to be about global economic competition—and who will play what role in the green economy of the future.

European economies and China previously led the charge, but now, many more countries are joining the global green race. Economic relief and stimulus packages—in response to the economic crisis resulting from the coronavirus pandemic—contain various allocations for green industries and technologies. In addition, nations are pursuing long-term climate investment agendas, which place green technologies and infrastructure at the center of economic development. These include the E.U.’s Green Deal, South Korea’s Green New Deal, and the Biden administration’s 10-year $1.7 trillion climate investment plan.

Global competition in green technologies and industries can lead to a worldwide focus on innovation. For example, California’s 2012 Zero-Emission Vehicle standard helped foster the rise of Tesla and the deployment of electric vehicles within the state, but it also pushed most automakers around the world to develop EVs to comply with California’s regulation. Later, China adopted an EV mandate. These regulatory moves helped change the technological trajectory of the auto industry, and now a growing number of companies, such as Volkswagen and GM, are shifting toward an electric future.

However, global green competition can also lead to conflicts that stymie decarbonization efforts. A protracted trade dispute between the United States and China increased the cost of solar PV in the U.S. relative to what it would have otherwise been in open markets. Governments engage in geopolitical battles over rare earth minerals that are central to the development of several low-carbon technologies.

The world has entered an era in which global green-technology competition and global climate cooperation coexist. It is essential that policy makers steer the global green race to deepen and broaden international climate cooperation.