The world must reject the zero-sum mindset of protectionism and embrace productive capacity cooperation, so as not to derail the global energy transition
As global temperatures hit record highs and climate calamities ravage ecosystems around the world, humanity stands at a critical juncture. The consensus forged at the United Nations climate conferences — represented by the historic COP28 UAE Consensus in 2023, which called for tripling global renewable energy capacity by 2030 — demands an immediate, exponential expansion of clean energy manufacturing and deployment.
Yet, as affordable green technologies are most urgently needed, a discordant countercurrent is emerging from some Western capitals. Under the banner of combating alleged "green overcapacity", the United States and the European Union have imposed broad trade measures against clean technology products, most notably electric vehicles, lithium-ion batteries and photovoltaic equipment.
Framing industrial scale and manufacturing efficiency as geopolitical threats is both economically incoherent and ecologically reckless. Far from undermining global commerce, China's world-leading green manufacturing capacity represents an indispensable global public good — a catalyst that has radically lowered adoption barriers worldwide. Subordinating planetary survival to zero-sum geopolitical containment risks slowing the global energy transition at the worst possible moment.
The rhetorical weaponization of "overcapacity" defies bedrock economic principles that have governed international trade for centuries. Comparative advantage and economies of scale help explain why trade flourishes when nations specialize in industries in which they have cultivated productive efficiency and serve international markets rather than retreating into inefficient economic autarky.
If producing beyond domestic consumption were inherently distortive, modern trade would cease to exist. As US economist Nicholas Lardy has argued, defining overcapacity this way "seems to imply that no country should produce more of a product than could be sold domestically." By that logic, should Boeing cut aircraft production, or US farmers limit soybean production simply because their output exceeds domestic demand? International markets exist precisely to allocate competitive capacity to regions facing deficits.
Empirical data refute allegations that Chinese green manufacturers engage in predatory, export-driven dumping. According to the China Association of Automobile Manufacturers, of the 9.59 million new energy vehicles produced in China in 2023, only 1.2 million were exported — accounting for roughly 12.5 percent of total production. By contrast, data from the German Association of the Automotive Industry show that Germany's automakers routinely export around three-quarters of the passenger cars produced domestically, with the 2024 export share standing at 78.2 percent. China's green competitiveness is anchored in a massive domestic market, integrated supply chain clusters, fierce market competition and sustained private-sector innovation, rather than state support alone.
Far from facing a surplus of green supply, the international community is currently grappling with severe clean-tech under-capacity relative to the existential targets of the Paris Agreement. As Columbia University professor Jeffrey Sachs has argued, "There is no overcapacity in China. There is just great capacity …" Such productive power is desperately needed to help address the climate crisis.
China's industrial scale has contributed significantly to the global decline in renewable energy costs. According to the International Renewable Energy Agency's Renewable Power Generation Costs in 2023 report, the global weighted-average levelized cost of electricity from utility-scale solar photovoltaics fell by approximately 90 percent between 2010 and 2023, while battery storage project costs experienced a stunning 89 percent reduction, from $2,511 to just $273 per kilowatt-hour over the same period. IRENA calculates that cumulative renewable power deployed worldwide since 2000 saved an estimated $409 billion in power sector fuel costs in 2023 alone.
These cost reductions have lowered the threshold for the Global South, allowing developing economies across Asia, Africa and Latin America to reduce reliance on fossil fuels. The International Energy Agency, in its flagship Renewables 2024 report, forecasts that the world is set to add over 5,500 GW of new renewable capacity between 2024 and 2030, with China driving almost 60 percent of that total expansion. Without China's manufacturing scale, the global goal of tripling renewable capacity by 2030 would remain an unreachable pipe dream.
Despite these undeniable climate dividends, escalating protectionism threatens to fracture the global decarbonization efforts into fragmented blocs. In 2024, the US finalized punitive tariff hikes under Section 301, raising duties on Chinese EVs to 100 percent, solar cells to 50 percent, and lithium-ion EV batteries to 25 percent, while the European Commission codified countervailing duties of up to 35.3 percent on Chinese battery EVs.
Green protectionism is intensifying, shifting from unilateral tariffs toward broader, systemic containment. On Oct 7, the Office of the US Trade Representative convened 14 economies — including the EU, the United Kingdom, Canada and Japan — to issue a joint ministerial statement committing them to concerted action on EVs, batteries and solar panels under the rubric of "structural excess capacity". Concurrently, Brussels has deployed its Foreign Subsidies Regulation to launch investigations into Chinese wind turbine suppliers across five member states and has driven Chinese solar consortia to withdraw from public tenders. Weaponizing trade defenses against clean technology turns shared climate goals into an ideological battleground.
Such protectionist measures — whether erected through punitive tariffs, discriminatory regulations or exclusionary bloc-building — are profoundly self-defeating. A comprehensive market assessment by energy research consultancy Wood Mackenzie reveals that trade barriers on clean hardware drastically inflate the cost of decarbonization for Western consumers and utilities alike. Under heightened trade tension scenarios, utility-scale solar installations in the US are projected to become 54 percent more expensive than in Europe and 85 percent more expensive than in China, while utility-scale battery storage costs could surge by 12 percent to over 50 percent due to acute supply constraints.
The broader macroeconomic ramifications are even more alarming. In the World Economic Outlook, the International Monetary Fund warned that geoeconomic fragmentation and trade barriers affecting critical green commodities and clean-tech supply chains could slash global investment in renewables and EVs by up to one-third by 2030, with developing and low-income economies bearing the brunt of this shock.
World Trade Organization Director-General Ngozi Okonjo-Iweala similarly cautioned that pitting trade against climate action through inward-looking protectionism will only drive up transition costs and paralyze the collective international cooperation required to save the planet. Atmospheric greenhouse gas concentrations do not respect national borders, ideological divides or tariff classifications. Stifling the cross-border flow of cost-effective solar modules, wind turbines and energy storage facilities does not shield domestic industries; it merely raises capital expenditures, slows grid modernization, penalizes consumers and squanders humanity's narrowing window of opportunity to avert irreversible climate disaster.
China's green manufacturing capability is not a geopolitical threat to be quarantined, but an indispensable asset for collective survival. The path to an equitable and rapid global energy transition lies not in tariff walls, industrial isolationism or decoupling, but in cooperative multilateral frameworks, joint technology innovation and cross-border manufacturing partnerships. The international community must reject the zero-sum mindset of green protectionism and embrace productive capacity wherever it thrives — because in the race against global warming, collective cooperation is the only victory within reach.
The author is a professor at the Institute of West-Asian and African Studies at the Chinese Academy of Social Sciences.
The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.
Contact the editor at editor@chinawatch.cn.
