by Kamol Kamoltrakul
Global warming, or climate change, is caused by increasing average air temperatures near the surface of our planet. Over the past two centuries, higher sea surface temperatures have led to stronger, faster intensifying hurricanes and typhoons along with longer storm seasons. Hurricane Otis, which hit Acapulco, Mexico, in October 2023, was a devastating example. It exploded in strength, rapidly intensifying from a tropical storm to a destructive Category 5 hurricane in less than 24 hours. El Niño — which began last July — has also contributed to higher sea surface temperatures and more powerful hurricanes, typhoons and tropical cyclones.
Generating electricity and heat by burning fossil fuels causes a large chunk of global emissions, which cause the greenhouse effect. Some gases in the Earth's atmosphere act like a greenhouse, trapping the sun's heat and stopping it from leaking back into space, causing a rise in temperatures. Burning fossil fuels changes the climate more than any other human activity. In recent years, human activities have released around 35 billion tons of carbon dioxide into the atmosphere annually.
Consequently, in the last 10 year, this has brought disasters around the world, like heavy rains, floods, tornados, wildfires, wild life extinction, deforestation, tsunamis, volcanic eruptions, drought, famine displacement and death. In the US, the evidence is clear; for example, there were six major tornado outbreaks over the 2024 summer and fall, primarily concentrated in the Midwest. Illinois, Iowa and Missouri each experienced over 100 tornados. Across the country, there were over 1700 tornadoes in total, more than any other year except 2011. Texas saw three severe weather events, a hail storm and a hurricane. New Mexico experienced a severe wildfire last July. And most recently in January, just a few days ago, there were catastrophic wildfires on the Pacific coast in Malibu, and Pacific Palisades, Los Angeles, California. Malibu - one of the most affluent communities on the entire planet has now been left in ashes. According to CNN, this is the most destructive fire in LA history. The Palisades Fire that is scorching the seaside area between Malibu and Santa Monica has burned over 17,000 acres. It has destroyed at least 1,000 structures, making it the most destructive ever in Los Angeles County.
Over all, the 2023 National Climate Assessment estimated that the United States has spent USD150 billion each year on climate-related disaster relief. Some estimates said recovery from Hurricane Helene alone could cost up to USD250 billion.
Business opportunity
However, at the same time, global warming creates opportunities for a new business sector – clean technology. Based on today’s policy settings, the global market for these technologies is set to rise from USD700bn in 2023 to more than USD2trn by 2035 – close to the value of the world’s crude oil market in recent years, states the International Energy Agency (IEA). "Trade in clean technologies currently is also expected to rise sharply in a decade's time. It will more than triple to reach USD570bn, more than 50% larger than the global trade in natural gas today.”
China: A threat or planet savior
Furthermore, according to a report by the IEA, assessing the pace of clean tech manufacturing, investment in clean technologies such as solar photovoltaics (PV), batteries, wind power, electrolysers and heat pumps soared by 70% last year with China accounting for three-quarters of global investments.
China was once called the champion world polluter, but has now become the champion of green and clean technology. The Atlantic Council reported that China is counting on three cleantech sectors to fuel future economic growth: electric vehicles (EVs), lithium-ion batteries and solar photovoltaic (PV) panels. Exports of these so-called “new three” industries reached nearly USD143 billion in 2023, up massively from USD33 billion in 2019.
According to EUROnews, China accounts for more than 80% of global solar PV module manufacturing and battery production and is the world’s largest exporter of EV batteries, accounting for about 70% of total exports in 2023. The Asian giant currently controls nearly 90% of global capacity for cathode active materials and over 97% of capacity for anode active materials — key battery components for the production of high-quality lithium-ion batteries needed for the production of electric vehicles or energy storage systems.
While the EU and the US each account for 5% of battery production, the IEA expects the capacity accumulated by these three regions, including China, to remain above 90% through 2030. China is the world's biggest producer and exporter of products such as solar panels, lithium batteries and electric vehicles, with its investment, innovation and manufacturing capabilities leading the world by an "astonishing margin”.
According to the news, China is responsible for 32.5% of global electric vehicle exports, 24.1% of lithium batteries and 78.1% of solar panels. Hence, its dominance has sparked concerns on using its giant capacity surpluses to flood markets, drive down prices and undermine competitors. Low-labour costs and state subsidies keep China at the forefront of the clean tech race. Battery, wind and solar PV manufacturing facilities are typically 70% to 130% more expensive to build in the US and Europe than in China.
The IEA report suggested that based on plant-level assessments of more than 750 facilities, solar PV module costs are around 35-65% lower in China than in Europe or the US.
However, China’s growing might in cleantech is stirring unease in recipient markets due to perceived economic and national security risks. The United States has banned imports of Chinese solar cells and modules and EVs. Other advanced economies also followed suit—for example, on 26 August 2024, Canada imposed tariffs on Chinese-made products. The United States and Europe are racing to narrow China’s commanding lead in clean energy technologies, throwing subsidies at local manufacturers and hiking tariffs on Chinese imports in a strikingly protectionist turn, according to CNN.
Additionally, with several developed countries becoming increasingly reluctant to absorb imports from China’s new three industries, accordingly, Latin America’s approach to China’s cleantech industries could prove consequential. For now, growth in China-Latin America ties in the “new three” is driven primarily by Brazil, Electric vehicle shipments to the South American country have softened considerably in recent months. China’s cleantech sectors need alternative markets to secure future export growth.
CSIS, the Center for Strategic and International Studies, warns US-China technological competition is widespread and complex, but there is one technological sphere with a clear leader. Chinese companies are increasingly outperforming competitors in cost and quality when it comes to established clean technologies ranging from solar panels and lithium-ion batteries to electric vehicles (EVs). While the United States erects more barriers to keep out Chinese firms, it also needs to avoid technological isolation, contend with more competition on the international stage and be prepared to compete in emerging and next-generation clean technologies.
However, the United States and Canada have already slapped 100% tariffs on China-made electric vehicles, and the European Union will soon follow on this issue. US imports of Chinese solar panels and lithium batteries are also subject to tariffs of 50% and 25%, respectively. In response to the trade barrier staged by the US and others, according to the Australian research group Climate Energy Finance (CEF), Chinese firms' overseas investments in clean energy technology projects have increased to exceed USD100 billion since the start of 2023 as they aim to avoid tariffs in the US and elsewhere.
However, Green Peace warns that we are at a crossroads with extreme weather events, rising sea levels and droughts all symptoms of our global climate on the brink of a breakdown. Together, instead of competing, we need to heal the climate by working together to build a safer, greener, fairer world.
