China, the European Union (EU), the United States, Japan and India seek to position themselves as global leaders in the transition to net-zero, shaping markets and fostering innovation, according to Strategic Perspectives, whose political objective is to drive effective climate action as the solution to solve a multitude of crises Europe is facing.
Net-zero transition plans are driving the emergence of a new industrial era based on zero-carbon technologies manufacturing and deployment that create jobs, competitive advantages and emissions reductions in key sectors, the organisation noted.
Major economies like China, the EU, the US, Japan and India are competing to deploy renewable energy, electric vehicles and heat pumps, and to lead the global supply of these zero-carbon technologies, it said.
National transition plans such as the European Green Deal, China’s 14th Five-Year Plan, India’s Energy Conservation Act, Japan’s Green Growth Strategy and, more recently, the US Inflation Reduction Act are being turned into industrial strategies.
They have the potential to create millions of quality jobs, with the International Renewable Energy Agency (IRENA) assuming the renewable energy sector alone could employ 40 million people by 2050.
With investment, India’s decarbonisation plans could be effectively implemented and the country could become a showcase of successful net-zero development, it commented.
India is making progress in incorporating solar and wind into its electricity generation, almost doubling its share from 2017 figures.
However, having less financial capacity to invest in research and development, India is still very dependent on technological transfer and relies on Chinese imports. Building its zero-carbon technology factories and investing in innovation will be crucial elements in securing its transition and positioning India in the global net-zero supply chain, Strategic Perspectives noted.
While the net-zero transition should reduce all greenhouse gas emissions along the value chain, it has fast turned into a strategic choice for strengthening countries’ energy security, industrial competitiveness and future economic prosperity, it said.
Countries that miss this transformation opportunity are unlikely to embark on this new industrial era and risk heavy dependence on gas, coal and oil—an economically and politically costly option, it added.
China is a clear leader in the zero-carbon technology race, investing heavily in the deployment of renewables and electric vehicles, and in the manufacturing of zero-carbon technologies. China covers 60 per cent of the global zero-carbon technology manufacturing, creating millions of jobs and new economic activity in its territory.
The vast majority of solar as well as large parts of battery supply chains are managed by Chinese companies.
They are also gaining market shares in the wind and heat pump industries, putting pressure on competitors in the EU and the United States, the organisation noted. The high dependence of other economies on China exposes them to major supply risks, bottlenecks or even disruptions in strategic technologies, it cautioned.
