In his interview with Chris Wallace on Fox News, President-elect Trump pondered once again the magnitude to the climate crisis. "I'm very open-minded. I'm still open-minded. Nobody really knows. Look, I'm somebody that gets it, and nobody really knows. It's not something that's so hard and fast," Trump said. "I do know this: Other countries are eating our lunch." But on that latter point, that the Paris Agreement would put U.S. companies at a disadvantage, Trump is dead wrong.
A recent trip to China over the past week took me across the country, from Beijing to Changsha on to Suzhou and Shanghai. As I met with the CEO's of energy businesses and local and central government officials, the discussions and company visits provided me with the clear insight that a sustainable low-carbon future was seen as a competitive advantage, not a barrier for economic growth. There is no doubt that China remains firmly committed to accelerate its energy transition. Thus for the new administration, the question looms whether it will surrender U.S. leadership not just in climate change diplomacy but also in the energy businesses of the future. There are four major reasons why China is well positioned to lead the emerging energy revolution.
1. China believes climate change requires urgent action
China understands deeply that a more sustainable future is key. Above all, there is the overwhelming air pollution. Many Chinese citizens are concerned about the constant haze that hangs over cities and the countryside. On a regular basis, the air in Beijing is equivalent to smoking a couple of packs of cigarettes a day--for adults and children alike. But addressing the air pollution crisis is not the only incentive for the country to act. The direction from the top is clear and unwavering: China believes climate change is real and requires urgent action. President Xi's call for a revolution in the use and production of energy in 2014 has now been translated into clear goals and strategies in the 13th Five-year Plan. And that commitment is based on the country's national interest and domestic priorities; it is not dependent on equivalent action in the U.S.
2. Renewable energy is a source of economic competitiveness for China
It is this very same plan that frames the importance of building out a competitive lead in the energy businesses of the future. China is already dominant in the global production of solar modules. But a tour of the R&D lab of GCL, one of the leading solar companies, revealed that not just current production, but also the innovations and cost reductions for the future of solar, are top of mind. Similarly, during a lunch with the CEO of Envision, a new leader in wind turbines, it became clear that their current foothold in the international market for wind turbines is only a starting point. And the founder of the Broad Group, one of the most innovative building material and air-conditioning companies, explained how he relishes the competitive opportunity for his business resulting from the phase out of greenhouse gas coolants used in traditional air-conditioners.
Local leaders across the country discussed with us how they are making the energy revolution a cornerstone of job creation and economic growth in their city or region. In the minds of Chinese government leaders, energy as a source of economic competitiveness no longer revolves around mine workers digging fossil fuel resources out from deep in the ground. It is much more about researchers in lab coats, improving the energy technologies of the future that are rapidly making clean electricity abundant, ubiquitous, and cheap. Industry leaders and real estate developers recognize the early paybacks and competitive advantages associated with energy efficiency and often enabled by IT. And investment and export opportunities in these new technologies are on everyone's mind.
3. China's bold can-do mentality
The discussion about the energy transition is inspired with a bold can-do mentality. Of course, Chinese business leaders carefully monitor the returns they make on any new energy-related investment. And the regulatory reform of energy markets pose challenges in China just as elsewhere. But the rollout of a cap-and-trade system that will put a price on carbon across all of China has long been decided on and is not in any doubt. It will create the largest carbon market in the world. The target of 5 million electric vehicles by 2020 is solid, and although the pace of growth in renewables is slowing down, the direction of travel for new power generation remains unchanged. In fact, statistics indicate that coal demand in China is now down two years in a row. It seems as though the energy revolution is an opportunity much more than a challenge in the mind of the Chinese business community.
4. China is making it local
I did not just spend my time in Beijing with leaders of the central government. In fact, China has translated its commitment under the Paris climate agreement into specific city-based implementation plans. The State Council of China, in its Action Plan to control GHGs during the 13th five-year period, has requested the Alliance of Peaking Pioneer Cities (APPC)--initiated by Chinese low-carbon pilot cities during the first U.S.-China Smart/Low carbon Summit in 2015 and led by the National Development and Reform Commission--to explore earlier peaking targets than the national commitment on peaking, and member cities of APPC have been actively moving forward on peaking their own emissions. Roadmaps are being created, investments are being made, local businesses are getting involved, and progress is being monitored. The commitment to a clean energy future spreads broad and wide in China.
So what should President-elect Trump and his team take away from this trip report? Of course, election promises to get miners back to work and "cancel the Paris agreement" cannot be lightly shoved aside. But the future does not lie in a return to the inefficient and dirty energy technologies of the previous century. The competitive edge in the 21st century will belong to those countries that rapidly transition to clean low-cost electricity, electric mobility, and smart efficiency. President Xi and his team understand that. The CEO's of Envision, GCL, and the Broad group are already plotting their transition strategies. And the leaders of many peaking pioneer cities are leading the implementation charge. We will soon find out if President-elect Trump truly is the visionary business leader that he claims to be and will seek to help the U.S. compete and lead in the energy revolution, or if his administration will try to pull the U.S. back to the outdated energy technologies of its past.