Copyright livemint
Headline numbers on green energy can be deceptive. China supplied 39% of the $2 trillion that the world invested in green energy last year. The U.S. and European Union combined supplied 34%. But raw spending doesn’t indicate investment quality. The eco side of Chinese industry resembles the next iteration of its recent property boom and bust, in which Beijing funneled too much capital into construction until the current crisis began around 2021. Since then, Chinese money has been flowing into solar panels, creating overproduction and overcapacity. Chinese annual solar production capacity is now more than twice the actual global solar-panel sales in 2024. Of the firms the International Energy Agency studied, every segment of the Chinese solar supply chain suffered profit losses in every quarter last year, with margins reaching almost as low as minus 60%. Between the start of 2024 and July 2025, more than 40 companies delisted, went bankrupt or were sold. The industry cut a third of its workforce in 2024. Even running at a loss, this production depends on massive coal use: Every Chinese silicon smelter, an essential solar-panel material, requires its own coal-fired power station. Investment is also pouring into electric cars. Automaking has become an economic pillar for local governments once reliant on the ample land sales and real-estate taxes of the previous property bubble. The auto industry and related services now account for one-tenth of China’s gross domestic product. Overcapacity is staggering: The consultancy AlixPartners estimates that of the 129 current Chinese EV and hybrid brands only 15 will be financially viable by 2030. Another seemingly eco-friendly figure is that Chinese consumers buy nearly two-thirds of all EVs sold globally—pushed by government limits on traditional car purchases and lured by rock-bottom prices from surplus production. Yet this does little for the climate. Beijing’s insistence on EVs is better explained by the government’s desire to avoid dependence on foreign oil. EV battery packs are made using coal energy and charged on a coal-dominated grid. A 2023 estimate published in iScience shows that over its lifetime a Chinese EV emits 85% to 90% of the carbon of a gasoline car, in large part because of the heavy carbon debt incurred by the coal-produced battery. And this may be too optimistic, as many new buyers would otherwise have bought no car or a less-polluting hybrid. Moreover, Chinese EVs are driven much less than conventional cars, resulting in higher emissions per mile. Electric cars also increase Chinese air pollution. A 2024 study in Nature shows that while EVs reduced nitrogen-oxide emissions—a precursor to smog—by 1% since 2020, they have increased far deadlier sulfur-dioxide and particulate-matter pollution by 10% and 20%, respectively. China’s EV boom will increase these emissions into the future, and without a fast green transition even CO2 emissions could increase, according to a 2025 report in the journal Energy. While China added unprecedented solar and wind capacity last year, it also hit a 10-year high of new coal plant construction. China remains the world’s top coal consumer, with fossils supplying over 87% of its primary energy. Renewables’ share was 40% in 1971 when the country was poor, but plummeted to 7.5% by 2011. From then to 2023—the last year for which the IEA has data on China—the portion of renewables rose slowly to 10%. On this trajectory, a full transition would take 400 years. IEA data show China in 2023 added more than five times as much coal energy as solar and wind energy. Though China isn’t the green giant Western climate campaigners think, there are important lessons to learn from it. China’s across-the-board energy expansion has been a huge boon to growth. The West—especially Europe—should abandon its self-imposed energy restrictions and follow suit. As part of its energy surge, China has pushed rapid investment into the only technology that currently can decarbonize the planet at scale: nuclear fission and fusion. In the West, traditional nuclear has grown prohibitively expensive, with U.S. construction costs tripling since the mid-1980s. America has brought only three new plants online this century, at enormous cost and with timelines of at least 11 years. Contrast this to China, where reactors are completed in five to six years and costs have declined by half since the 1990s—now matching U.S. mid-1970s prices. China has expanded from three reactors in 2000 to 58, with 33 more under construction, 43 planned and 147 proposed. Globally, there are 438 nuclear plants. Fourth-generation reactors—often small and modular—are designed for efficiency, affordability, minimal long-lived radioactive waste and inherent accident safety. A report from the Information Technology and Innovation Foundation estimates China leads the U.S. by 10 to 15 years in the ability to deploy fourth-generation reactors at scale. The first such reactor in the world began operations in China over a year ago. China is working on running all six types of fourth-generation reactors, not just one. On fusion, China dominates patents and has allocated more resources to research than any other country. This isn’t renewables redux; it’s a race for abundant energy. If the West doesn’t start running, it risks awakening to a world powered by Beijing’s reactors, not its own ingenuity. Green China is mostly a sham—but it is time for the West to emulate its real playbook: ramp up energy use and nuclear R&D. Mr. Lomborg is president of the Copenhagen Consensus, a visiting fellow at Stanford University’s Hoover Institution and author of “Best Things First."
