At a glance
Prioritizing American Interests: A new strategy for global decarbonization, by Catrina Rorke, Greg Bertelsen, & Matthew C. Porterfield. Climate Leadership Council, Sept. 24 2024.
This report by the Climate Leadership Council, a non-profit think tank based in Washington, D.C., urges the United States to consider decarbonization as central to other national interests, such as the economy and national security. While the U.S. has reduced its greenhouse gas emissions, the report argues that global emissions are still set to rise, driven by developing countries in the Global South. The authors argue the U.S. should help developing countries decarbonize through a policy that supports American competitiveness and economic growth, resource security and geopolitical influence, including by manufacturing more clean energy technologies. The report says this call for U.S. leadership also presents an economic opportunity, as it will take about $215 trillion in clean energy investments for the world to reach net-zero emissions by 2050.
Organizations
Topics
Key findings
- Emissions: Global emissions are projected to be higher by midcentury despite reductions in U.S. emissions, as developing countries double their emissions.
- Market potential: BloombergNEF estimates it will take about $215 trillion worth of investments in clean energy technologies to reach net zero by 2050, but U.S. firms lag behind in capturing this potential.
- China’s lead: The U.S. accounts for just six per cent of global clean energy technology exports, compared to China’s 25 per cent market share.
- Critical materials: Securing reliable supply chains for critical minerals needed for the energy transition, such as lithium and cobalt, is essential, as global demand for these resources is expected to double by 2030.
- Carbon intensity: U.S. steel manufacturing produces up to 60 per cent fewer emissions than the global average, showcasing America’s carbon advantage in industrial production.
- Chinese dominance: China controls over 50 per cent of global steel, cement, and aluminum production.
Bigger picture
The report stresses the need for the U.S. to compete in what the Climate Leadership Council estimates to be $130 trillion in global market potential for clean energy technologies, which is currently dominated by China. Domestic manufacturing is accelerating with the help of the U.S. Inflation Reduction Act and other policy incentives, but growing in foreign markets remains a challenge. After years of outsourcing basic manufacturing, the report says the U.S. now needs to capitalize on its industrial strengths, such as low-emission steel production, while investing in critical minerals and expanding clean technology exports to align climate policy with broader national interests.
For emerging economies, the report’s strategy offers opportunities for increased U.S. investment and technology transfer but also challenges in sustainable development such as avoiding locking in high-emission infrastructure. The emphasis on securing critical mineral supply chains could also reshape global energy trade dynamics as key metals like lithium, cobalt and copper are predominantly located in the Global South.
The report indicates a shift towards integrated climate and economic policies, using trade and market mechanisms to drive global decarbonization. This approach may create new forms of international co-operation and competition in clean energy, impacting various sectors, future job markets, investments, and geopolitical relationships. It highlights how far reaching the implications of the global energy transition are, intertwining clean energy leadership with economic success and international influence.
Challenges and opportunities
Key barriers to US and global energy transition progress identified in the report:
- Emissions: Rising global emissions, especially in developing countries.
- Policy hurdles: Slow U.S. permitting processes for clean energy projects.
- Financing gaps: Insufficient investment in low-carbon infrastructure globally.
- Global competition: China’s dominance in clean energy manufacturing.
- Trade policies: U.S. prioritization of cheap imports over domestic production.
- Supply chains: Reliance on foreign sources for critical minerals.
- Carbon leakage: Emissions outsourced to countries with weaker environmental standards.
- Technological gaps: Insufficient advancements in key technologies.
To address these challenges, the report recommends:
- Global accountability: The U.S. should lead efforts in international agreements on carbon pricing, border carbon adjustments, and climate finance to incentivize decarbonization globally.
- Streamlined permitting: Policymakers should prioritize reforms to accelerate clean energy project approvals and infrastructure development in the U.S.
- Increased investment: Both public and private sectors must boost investment in renewable technologies, low-carbon infrastructure, and energy storage systems.
- Strengthened export policies: Supporting U.S. firms in clean energy technology exports can help capture a larger share of the growing global market and reduce reliance on imports.
- Supply chain security: The U.S. needs to secure critical mineral supply chains through domestic production and partnerships with allied nations, reducing reliance on adversarial countries like China.
- R&D: Innovations in green steel, cement, and other heavy industries are necessary to maintain a competitive edge while lowering emissions.
In their own words
Our environmental efforts have prioritized domestic reductions over using American policy to drive net global emissions reductions. Our focus on forging international consensus has at times allowed free riders to undermine global efforts. Our foreign investments come with too many rules, checklists, and restrictions. Our trade policy has valued the cheap at the expense of U.S. manufacturing jobs, the global climate, and, at times, our deeply held national values. Is it any wonder that it has been difficult to weave together a durable constituency in the U.S. to support climate?
Prioritizing American Interests: A new strategy for global decarbonization, By Catrina Rorke et al., Climate Leadership Council, Sept. 2024.
Final thoughts
The climate is a significant concern for U.S. voters, but it rarely surpasses the economy in importance. A Pew Research Center survey, published on Sept. 9, 2024, found that 81 per cent of registered voters view the economy as a “very important” issue in the upcoming U.S. presidential election. Thirty-seven per cent considered climate change “very important,” placing it at the bottom of the list. This report from the Climate Leadership Council argues that stronger U.S. climate policies could also benefit the economy.
It highlights the risk of falling behind global competitors, particularly China, in clean energy manufacturing and supply chains, which could undermine both U.S. economic growth and global climate efforts. The report could have enhanced its analysis by exploring specific international collaborations and innovative financing mechanisms that could accelerate the transition in developed and developing countries.
Download the full report originally published by the Climate Leadership Council on Sept. 24, 2024.
