Can the U.S. and China Cooperate on Green Technology Again?

Scientists project that the world will likely cross over the 1.5 degrees Celsius redline set under the Paris Agreement in the next few years, unleashing more disasters like those that have hit Libya, Greece, Hong Kong, the Hawaiian island Maui, and other places in recent months.

One might imagine that such grave news could lead to a scenario along the lines of what Chinese science fiction author Liu Cixin imagined in his 2008 novel The Three-Body Problem: the world’s most powerful countries, even adversaries, coming together in one room to confront an existential threat. In that case, the threat was extraterrestrial life; in this, climate catastrophe.

In Cooperating for the Climate, published in the spring from MIT Press, Georgetown Associate Professor of Energy and Environment Joanna Lewis calls for the United States and China to follow that script, joining forces to fight climate change. The United States and the Soviet Union were able to overcome their differences during the Cold War to eradicate smallpox, she writes, and the United States and China should follow suit to preserve a livable planet.

If you haven’t heard of the center, you won’t be alone. It was a technical project created during the early Obama years, the heyday of United States and China climate cooperation when a record number of clean energy bilateral agreements were signed between the superpowers. Lewis calls it the “most ambitious model of U.S.-China clean energy technology cooperation to date.” Through the program, the United States and China undertook clean energy research, development, and demonstration with national labs and private companies. The countries chose five research areas of mutual interest—cleaner coal power among them—and each invested a substantial $200 million sum over about a decade with the goal of leveraging each other’s strengths to jointly invent new technologies.

Cooperating for the Climate: Learning From International Partnerships in China’s Clean Energy Sector, Joanna I. Lewis, The MIT Press, 370 pp., $45, March 2023

Perhaps unsurprisingly, the initiative wasn’t an unambiguous success. When it came to the main goal—jointly commercializing new technologies—the hyphen between the United States and China dropped off. Intellectual property (IP) concerns led the U.S. project members to keep the most valuable research to themselves rather than sharing it with their Chinese partners. These concerns were not unfounded. The book points to two instances, one involving a battery company and the other a wind turbine company, in which U.S. tech was stolen by Chinese companies. Lewis acknowledges that the program didn’t live up to its full potential. “While the CERC indeed has produced inventions, it has not produced inventions that were jointly developed by U.S. and Chinese participants,” she writes, “nor has it yielded IP rights that were jointly held by entities in both countries.”

However, she goes on to argue compellingly that the program still provided value for both countries. The scope alone is impressive—the program involved more than 1,100 researchers in China and the United States. In some program areas, such as building energy efficiency, 100 percent of the projects were undertaken jointly after a few years, giving researchers heightened visibility into each other’s work. Much of the collaboration was in early-stage research, which was less contentious, but Lewis also points to some later stage success stories. One company, North Carolina-based L&P Anima, was able to set up demonstration projects in China for its technology to boost coal plant efficiency. Lewis also credits the center with helping build momentum toward the big climate breakthroughs under then-U.S. President Barack Obama: the 2014 U.S.-China bilateral climate agreement and the 2015 Paris Agreement. “While claiming that the CERC led to the Paris agreement may seem like a stretch, it is possible to follow the logic,” she writes. “For many years, clean energy cooperation was embraced by China (and the U.S.) when climate cooperation was not.”

Given these bright spots, the book makes the case that something like the center, which was discontinued under U.S. President Joe Biden, should be revived today, albeit with a renewed focus on IP protection, to unleash new clean energy technology. It’s a nice vision—the two biggest emitters rolling up their sleeves again to invent the next moonshot technology—but two questions follow, and those questions aren’t fully addressed in the book. First, in the current age of increased green technology competition, is such collaboration still desirable? And second, if so, given the protectionism gripping both nations, is it even possible?

On the first question, Lewis and other academics have argued that some cooperation remains important, even in a competitive environment. The world still needs cheaper and more efficient versions of existing clean energy technologies, from wind turbines to solar panels, to meet global climate targets, according to a report published last year by the Intergovernmental Panel on Climate Change. Nascent technologies targeting issues such as carbon dioxide removal will also need to improve significantly. Joint research and innovation, utilizing the scientific resources of both countries, could yield faster breakthroughs.

At the same time, studies have shown that trade barriers between the United States and China are throwing a wrench in that innovation process by stifling competition. Essentially, under policies such as the current set of U.S. tariffs on Chinese clean energy imports, companies operating in the United States won’t be as exposed to competition and therefore won’t feel the same kind of pressure to innovate or cut costs. Lewis writes that under a full decoupling scenario, there will be “inefficiencies in the duplication of manufacturing and of innovation, resulting in a slower and costlier low-carbon transition.”

And the United States may have as much to lose from this as China—or more. In the early 2000s, China was still hoping to get clean tech from the United States. Today, China still lags the United States in low-carbon inventions, but it outpaces the United States on clean energy research and development spending and leads the world in manufacturing key green technologies.

Signs of slowdowns in the U.S. clean energy transition due to attenuating ties with China are already visible. The United States has long placed tariffs on Chinese solar imports, which have raised the cost of U.S. solar panels, and those tariffs are expected to be expanded next year. A study published in Nature last year found that if the United States, Germany, and China all decided to shift to fully domestic solar production starting in 2020, by 2030 global solar costs would be 20 percent to 30 percent higher. That’s because the countries wouldn’t be able to take advantage of lower-cost components from other markets.

The United States isn’t on a path to fully shut out Chinese solar, but the rising partial barriers will keep costs higher than they’d otherwise be. At the same time, the 27.5 percent tariffs on Chinese car imports and incentives for domestic electric vehicle (EV) manufacturing under the U.S. Inflation Reduction Act (IRA) are likely to limit Americans’ access to cheaper Chinese EVs. Colin McKerracher, who leads Bloomberg New Energy Finance’s transport division, told Foreign Policy that it’s hard to quantify how much protectionist policies in the United States will slow the EV rollout, but they will have an effect. If U.S. policy were “purely aimed at climate, then we would probably not have these types of things,” he said.

China’s EV battery companies are also world-leading, and they have faced tremendous political pressure as they’ve tried to enter the United States. In one recent example, U.S. House of Representatives Republicans are trying to make Ford ineligible for IRA subsidies because the company plans to license technology from Chinese battery giant CATL. Individually, none of these protectionist moves is devastating for the clean energy transition, but together they add up to a slowdown.

Short of that, cooperation advocates have pointed to other steps the United States can take to facilitate cross-border innovation, at least in the early stages. One such step would be extending the overarching Science and Technology Agreement the United States and China signed in 1979, an umbrella agreement that facilitates cooperation across scientific fields. The Biden administration has faced pressure from Republicans to cancel the agreement and recently decided to grant a six-month extension to continue deliberating.

The United States could also continue repairing ties with Chinese scholars. The Trump administration’s China Initiative, which investigated scientists under allegations of technology theft, is widely viewed to have produced more harm than good. Since 2010, an increasing number of Chinese scientists have left the United States. The Biden administration ended the initiative, but Chinese and Chinese American scholars continue to report feeling stigmatized. If Chinese scientists are welcomed in the United States for projects deemed to be mutually beneficial and non-sensitive, they can facilitate the transfer of ideas, leveraging both countries’ strengths.

Finally, Washington could avoid gratuitously politicizing the Chinese companies that come to the United States if their business serves U.S. interests. As Robinson Meyer wrote recently in the New York Times, U.S. companies can benefit from licensing Chinese technologies in some cases, such as Ford looking to CATL to jumpstart its battery production.

The United States faces difficult trade-offs when considering economic competitiveness, national security, and decarbonization. Given the urgency at hand, Lewis provides an important warning against a blanket policy of ceasing all clean energy cooperation and trade with China.