Ask the American public about Asia’s technological leg-ups over the U.S., and these days they are likely to mention semiconductors. Used in practically everything from cell phones to washing machines, the recent semiconductor shortage has created severe supply chain pressures that are hiking costs for Americans across the country.
Unbeknownst to many, Asia — and China in particular — is dominating another key industry, which can threaten U.S. stability and security: clean energy technology.
As the demand for energy grows around the world, so too will the need for low-cost, clean energy. Whichever nation capitalizes on this opportunity and becomes the world’s leading energy innovator will enjoy remarkable economic growth, access to developing markets, and geopolitical influence. These are the benefits that can come from the U.S. competing in — and winning — the 21st century energy arms race.
Unfortunately, in many ways, this is a competition the U.S. is currently losing. The solar panels you might purchase to use on your home were most likely manufactured in China, which dominates 60% of the global solar panel market. The world’s largest capacity for wind energy: also, China. And on top of that, the Chinese Communist Party is rapidly accelerating its ability to export technology and infrastructure as part of the Belt and Road Initiative.
On this critical topic, America has yet to bring its A-game. If we do, we could grow our economy and create hundreds of thousands of new jobs, help secure our energy independence, crowd out China’s influence on the world stage, and cut the carbon pollution that’s driving billions of dollars in climate damage to the American homeland.
To surge ahead, there are a suite of potential investments and responses U.S. lawmakers and innovators can make. However, any serious response must harness the full entrepreneurial and innovative power of the U.S. marketplace. Most importantly, this means putting a price on carbon.
Preferred by businesses and innovators, this approach would establish a clear, economy-wide incentive through a gradually-rising fee on carbon emissions. It would create a level playing field for energy innovation and competition, and provide the private sector with the stability and predictability it needs to invest with confidence in clean energy technologies.
This approach contrasts with the left’s approach to pursuing energy innovation, which too often relies on regulatory red tape and the government to pick winners and losers. These heavy-handed policies are not only costly and slow, but they are also unlikely to spark the private sector growth and innovation needed to speed ahead of China.
A carbon price can be designed to further sharpen America’s competitive edge. Given our strong environmental standards here in the U.S., other countries are currently undercutting American manufacturers by producing goods more cheaply with lax regulations. In fact, products manufactured in China are on average three times more carbon intensive than those made in America.
If a U.S. carbon price is paired with a border adjustment — a comparable fee on high-polluting overseas goods — we could hold finally other countries to the same standards, giving American manufacturers a competitive advantage. This would shrink China’s economic influence and bring jobs and manufacturing back to the U.S.
The U.S. has so much to gain from leading on this issue. From ensuring energy security, to reducing pollution, to growing our economy, the geostrategic benefits are enormous — and they could determine the balance of power in the 21st century and beyond. It is time for America to play offense and show China what we’re made of.
Victoria Vincent
Victoria Vincent is the National Committeewoman for the Utah Young Republicans, an organization that represents young conservative professionals throughout the Beehive State.