International cooperation needed
The Biden administration has offered reasons to justify reorganizing the world economy: to prevent China from accessing high-end technologies; to reduce the inherent risk in global supply chains; to bring jobs home.
The trade restrictions the United States has deployed to promote this new world order are slowing the fight against climate change.
It was nice to hear about the agreement between Washington and Beijing on Wednesday to renew cooperation on climate. Still, the trade war with China, started by President Donald Trump and embraced wholeheartedly by President Biden, has probably already raised global greenhouse gas emissions.
Modeling by researchers in China, the Netherlands and Denmark found that global greenhouse gas emissions would rise by up to 1.8 percent if the United States and China stopped trading. The increase would be mostly driven by a jump in Chinese emissions and increases along the value chain in other Asian countries due to the shift of exports and imports to different markets and suppliers.
The Inflation Reduction Act and the Bipartisan Infrastructure Investment and Jobs Act have devoted hundreds of billions of dollars to deploying electric vehicles, solar and wind energy, and other clean-energy systems. Technology diffusion will make the climate transition cheaper in rich and poor economies alike. Research and development travel along value chains, pushing innovation across trading partners.
The White House’s protectionism threatens not only to make the U.S. decarbonization path more expensive but also to undermine the global progress its environmental policies might otherwise spur. To hit global climate targets, the world needs more international cooperation, not less.
Frustrated by some of the Inflation Reduction Act’s trade restrictions, European leaders are talking about imposing similar protections. Washington’s policies could fracture the bits of the world order that the United States would rather preserve.
The Biden administration has reasonable concerns about U.S. dependence on China for the minerals needed for the green transition, about ensuring that imported Chinese solar equipment was not made by forced labor and about preventing China from acquiring sensitive technologies. Promoting “friendshoring” —deriving more lithium, say, from friendly nations—should be a priority when addressing reasonable concerns about Chinese supply chains.