The green transition cannot wait for the United States

A new year usually brings hope and resolutions to do better. The 2025 horizon also worries climate analysts, economists, green technology companies and employees. For what? Because the new President Trump regularly attacks Biden's green industrial policy and promises a spectacular reversal. Dismantling the paradigm-shifting $370 billion green industrial policy outlined in the Inflation Reduction Act (IRA) would be a senseless act of national self-harm.

For example, the new administration has stated that it go back individual tax credits of $7,500 for the purchase of electric vehicles (EV). These incentives have prompted automakers to significantly increase their investments in batteries and electric vehicles, and consumers have started to take the plunge. In 2023, sales of electric vehicles in the United States will reach a record 1.2 million unitswhich is a 50% increase from 2022. If the tax credits disappear, Elon Musk's Tesla will be a big loser, as will Ford, GM, and dynamic new companies like Rivian and Lucid.

Walk backwards

Also, what about planned U.S. investments in green technologies: carbon capture and sequestration, hydrogen, battery factories, wind and solar power, small nuclear reactors and much more? All these projects can be called into doubt. Today, the investment climate in green technologies is stormy and uncertain; companies are scaling back operations and reporting worrying returns that were rosy just a year ago.

Such a reckless response from Team Trump against the IRA jobs and innovation machine would set America back, precisely at the moment when China is seizing the green future of globalization. His government is banking on innovation as it seeks to win the race for competitiveness towards a sustainable future that it hopes to dominate. China is currently leading the way, building world-leading sectors in batteries, electric vehicles, wind and solar. This process began more than a decade ago and in the last year China has invested huge sums in this change.

As Trump prioritizes fossil fuels, China is building a comprehensive green ecosystem to dominate key clean technologies in the next century.

Sharp increase in sales of electric vehicles in China

China's electric vehicle production has increased from a paltry 17,642 electric vehicles in 2013 to a staggering 9,489,000 in 2023; China is now the world's largest market for electric vehicles. In the past, Detroit automakers have mocked small Chinese electric vehicle companies. No more.

Indeed, the CEO of Ford was drive the Xiaomi SU7 to better understand the challenge of electric vehicles. The SU7 is priced at $40,000, a third of the price of the Porsche Taycan EV model and yet with comparable performance. American and European automakers need to wake up and understand what they are up against.

The key to China's success has been the development of a thriving and integrated green industrial ecosystem aimed at developing the most innovative and lowest-cost production of solar panels, electric vehicles, batteries and other fundamental elements of a green economy.

President Xis China now dominates many essential minerals for electric vehicles and other low-carbon technologies. For example, in 2022, China's share of global production reached 98% for gallium, 88% for magnesium and 80% for tungsten.

China's constant investments have also reduced the cost of solar And wind power. In the decade to 2023, installed wind power increased sixfold, and solar capacity has increased by a factor of 180. Chinese renewable energies now produce electricity at a lower cost than coal in China. almost all economic scenarios. Today, the country may rely on coal for its base generation, but the coal era is coming to an end sooner than expected. This would be good news for the planet.

Once again world leadership lost

As Trump prioritizes fossil fuels, China is building a comprehensive green ecosystem to dominate key clean technologies in the next century. Since the early 2000s, the Chinese Communist Party has identified the development of green initiatives as a national strategic priority and the party has gradually integrated green policy in its five-year plans. The aim is to position itself as the world's leading green technology provider, using the Belt and Road Initiative to expand technological influence and create critical supply chain dependencies.

It is also part of a long-term soft power diplomatic effort to supplant the United States as economic, military and diplomatic leader by expanding its diplomatic reach through environmental initiatives.

A smart White House would not ignore this growing economic threat. Rather than dismantling America's burgeoning green industries, it should double down on investments in technology and renewable energy and the jobs they create.

Unfortunately, it appears that instead of defending America's economic dominance, political scoring risks undermining environmental progress in U.S. markets, among businesses, and among consumers.

Other governments must maintain momentum despite Trump's denial. There is no alternative.

Political delay will not prevent the climate reality from making itself felt either. 2024 is set to be the hottest year on record. There is nothing Trump can do to escape the new climate reality. In the United States, extreme weather events are becoming more frequent and severe. Economic costs across America will increase year after year; many insurers are already leaving the American states.

Denial is not a sensible position in the long term.

If the new US administration insists on reversing course, other countries and regions, including China, the EU and the UK, must continue and accelerate their plans to transition to net zero emissions. If that means carbon border adjustment tariffs against American sectors and businesses, so be it. The green transition cannot wait for America. Other governments must maintain momentum despite Trump's denial. There is no alternative. The costs of inaction – economic, societal and political – are simply too high and are growing every day.

New Year's Hopes

As it's a new year, let's look for more positive possibilities. I see two best results, one national and one international.

The very slim Republican majority in the House of Representatives encourages cautious optimism. Will lawmakers with good-paying green industry jobs in their districts resist a massive IRA rollback? I think so. The cuts could then be more limited and surgical than brutal. As former Democratic House Speaker Tip O'Neill pointed out: All politics is local. The IRA's capital spending and renewable energy jobs are real, and it could make Congress hesitant to roll back any green gains. Let's hope so.

For 150 years, America was the world's leading economic and military power, dominating the industrial revolution with cheap fossil fuels. With its massive bet on net zero, China hopes to do the same over the next 100 years. But falling prices for solar, wind, electric vehicles and batteries also provide a continuing economic dividend for the rest of the world. Other countries should respond by purchasing Chinese products to accelerate their green transition while ensuring they do not become dependent on a one-way economic system.

Building a globally integrated green economy benefits everyone, especially oil-importing countries and emerging economies in the South. The planet will also benefit, and greenhouse gases will tend towards zero, allowing common global climate goals to become more achievable. That would be good news for all of us.