New report and post on Biden’s supply chain plans
First, many of the supply chains that are key to U.S. energy security go through China. Addressing this requires that a wide host of government agencies — not just the traditional “environmental” ones — have a climate focus. (rooseveltinstitute.org/publications/r…)
China accounts for:
80% of rare earth production/refining
61% of lithium refining for batteries/EVs
100% of the processing of natural graphite needed for batteries
97% of production of silicon wafers used in solar panels and
80% the global lithium-ion battery recycling capacity.
To put these numbers in context, OPEC has caused angst among U.S. geopolitics experts for decades. But the 13 OPEC nations control only 40% of global petroleum production. (forbes.com/sites/kenrapoz…)
If the world moves to a post-carbon economy, without unprecedented levels of policy activism, countries will be more than twice as dependent on China for some energy products as they are now on OPEC for petroleum. Here’s how the Department of Energy put it.
The prospect of conflict between supply chain resilience and ambitious decarbonization goals is not hypothetical: it’s currently stirring up a major conflict in Washington over the trajectory of solar power. (washingtonpost.com/business/2022/…)
All this means — without a sustained industrial policy strategy — the green transition could look a lot like the last few decades of globalization policy, pitting (carbon) efficiency against jobs. (foreignaffairs.com/articles/unite…) China is not waiting for the “market” to sort it out, instead consistently setting and beating targets for market dominance in green industries — many of which saw their major technological leaps in the US supported with US taxpayer $. See eg @GregNemet. (amazon.com/How-Solar-Ener…)
Second, the supply chain reports represent a shift in thinking about the boundary between state and market. Instead of paeans to big business, the reports document how trusting firms to make supply and siting decisions has produced extreme vulnerability. (rooseveltinstitute.org/publications/r…) Fixing this will require -at a minimum — more government visibility into supply chains, smarter use of procurement tools, and rethinking how we put state resources at the disposal of private actors,
Third takeaway: achieving the industrial policy goals will require tolerance of /legitimacy for a bigger public sector, including coordination of competing resource demands by industry. Without these tools, 2032 inflation will make 2022 inflation look tame (rooseveltinstitute.org/publications/r…)
I argue that this new public role requires a revival of the idea of using the state and of labor as countervailing powers against private power. (rooseveltinstitute.org/publications/r…) I draw on oldies but goodies like Karl Polanyi and James Galbraith, but also more recent contributions by @awh @Jacob_S_Hacker and others. (rooseveltinstitute.org/publications/h…) An industrial policy to rebuild/ sustain the power of labor can also further racial justice goals — a point I make drawing on work by @WSpriggs @kstrickland_ @FeliciaWongRI @GIDONGKIM3 @snaidunl @thequister @TVanheuvelen @Prof_CEW
@DavidMadland @zessoules @SLMSociology & more.
As nations ratchet up efforts to decarbonize their economies and address supply chain vulnerabilities, we’ll need to develop a new politics and economics. END (project-syndicate.org/onpoint/what-c…)
(Adapted from this thread.)