The IRA was signed less than two weeks after Beijing suspended its cooperation with the U.S. on climate change.
A clean energy arms race between the U.S. and China — the world’s two superpowers and largest greenhouse gas emitters — has been the dream of climate advocates for decades.
It may have just begun.
The Inflation Reduction Act that President Joe Biden signed on Tuesday will pour $369 billion into clean energy and help to build a domestic clean tech manufacturing sector designed to displace China as the key supplier of critical equipment for solar, wind and batteries.
It also spurred hopes that U.S. economic competition might succeed where the diplomacy of Biden’s climate envoy John Kerry has largely failed — by extracting new commitments from Beijing to reduce China’s greenhouse gas output.
“What this does is show to the Chinese that the U.S. is actually going to be real in this game and not actually just going to talk about it, and I think that’s a benefit to everyone,” said Jake Schmidt, senior strategic director of international climate with the Natural Resources Defense Council, an environmental research and advocacy group. “The planet will benefit from that healthy competition.”
The IRA was signed less than two weeks after Beijing suspended its cooperation with the U.S. on climate change — a dialogue that had been fostered by Kerry and viewed as an oasis of partnership amid the broader strategic hostility — in protest at the visit of House Speaker Nancy Pelosi to Taiwan.
With that, the pairing that made the Paris Agreement possible and in more recent times helped ease an agreement at last year’s climate conference in Glasgow, Scotland, was severed.
These two developments, according to present and former diplomats and climate experts, signal an end to any hope that the U.S. might influence Beijing through appeals based on mutual responsibility. Rather, competition is in vogue.
Now the U.S. is putting unprecedented money behind its wager that it can beat China in the marketplace while seeding a domestic clean energy base of its own. The $369 billion in incentives to sprout battery and electric car makers, electric appliance manufacturers and other clean industries more than quadruple the next-biggest U.S. green investment, the $90 billion from the 2009 American Recovery and Reinvestment Act.
Collectively, national plans submitted under the Paris climate pact to cut emissions are not enough to keep the world from warming more than 2 degrees Celsius, the line that scientists warn would bring catastrophic change. China and the U.S. — together responsible for around 38 percent of global greenhouse gas emissions — will largely dictate how fast the planet heats up.
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