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Closing the Clean-Tech Gap

The energy sins of the past have led many European countries – including the United Kingdom – to focus exclusively on decarbonizing their domestic economies. But these governments should instead develop technological solutions that drive economic growth at home while also supporting the green-energy transition abroad.

LONDON – In the debate about how to curb global warming, climate action is often confused for climate justice. Many European countries (including the United Kingdom) have taken to self-flagellation, atoning for their long history of burning fossil fuels by attempting to decarbonize their domestic economies as quickly as possible, no matter the cost.

There is no question that European governments should meet their emissions-reduction targets. But climate change is a global problem, and industrialized countries should achieve these targets by enacting practical policies and developing technological solutions that drive economic growth at home while also supporting the green-energy transition abroad.

To be sure, the developed world has historically been responsible for much of the environmental damage done to the planet, owing largely to early industrialization. Until 2000, the United States and Europe produced nearly 70% of global carbon dioxide emissions. Yet the largest annual emitters have changed rapidly in recent years, as many countries have decoupled economic growth from emissions.

For example, the UK – the birthplace of the Industrial Revolution – now accounts for around 1% of global CO2 emissions, while China is responsible for more than 30%. Our estimates show the UK’s emissions dropping to 0.6% of the global total by 2030, with China’s share rising to more than 36%.

The sins of the past should not crowd out a clear-eyed climate strategy, especially in the UK and the European Union. Demonstrating serious commitment to the net-zero transition is an important signal to the rest of the world, but these governments must also ensure that they take an approach that charts a path to a better future for all. Otherwise, they risk being left behind as other countries assume global leadership on the climate challenge, which is as much scientific and technological as it is political.

The US recognized this and enacted the multi-billion-dollar Inflation Reduction Act, which has accelerated investment in clean-energy technologies, including in research and development. In the year since the bill was passed, nearly 80 major clean-energy factories have been announced.

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Likewise, China dominates the clean-tech supply chain, especially in critical materials such as gallium, and has overseen the development of low-cost components for solar panels, wind turbines, and other technologies.

But rather than pursuing aggressive industrial policies to build clean technology, UK politicians have focused on minor matters, including such trivialities as UK Prime Minister Rishi Sunak’s flying habits. European politicians, meanwhile, have wasted time squabbling over nuclear energy: in response to Germany’s exit from nuclear power, Mélanie Vogel, member of the French Senate and co-chair of the European Green Party, tweeted, “Sex is good, but have you tried having your country shutting down its last nuclear power plants in 30 minutes?”

The EU’s Green Deal, although a step in the right direction, is nowhere near as ambitious as it needs to be. Moreover, European countries haven’t made the requisite leap forward in scientific and technological innovation, whereas the US has remained a global leader. The UK, for its part, is still struggling to find its post-Brexit economic footing.

European countries and the UK must put clean-tech innovation at the top of the agenda, alongside artificial intelligence and biotech. Policymakers should focus on technologies and solutions – including electricity generation and storage, carbon capture, and nuclear fission and fusion – that will help countries worldwide replace fossil fuels with cheap and convenient renewable energy.

To this end, the UK and European countries must increase and better allocate capital spending (it is telling that Amazon’s R&D budget exceeds the state expenditure on R&D of every European country). Increased funding, as well as planning and research reforms, are essential for building an innovation ecosystem that fosters “frontier firms” (the 100 companies in each sector with the fastest productivity growth). Europe’s competitiveness as a base for industry continues to decline, underscoring the need for concerted action.

Given that China has established a commanding lead in manufacturing low-cost green technologies, as evidenced by the growing number of Chinese electric vehicles on European roads, the UK and the EU should seek to exploit opportunities in “last-mile” solutions. Full decarbonization of the UK power sector, for example, will have a relatively minor impact on emissions, but developing innovative ways to use renewables would enable other countries to do the same more easily and cheaply. The challenges of materials science, particularly in hard-to-abate sectors such as cement, should excite researchers and young entrepreneurs.

This shift in focus would contribute to the development of new tools to combat climate change worldwide. It would also move domestic debates away from personal sacrifices toward the potential of climate action to nurture internal sources of innovation, drive economic growth, and create jobs, while benefiting from greater influence on the global stage.

Despite the challenges of addressing climate change, technology and innovation are accelerating the net-zero transition. But the UK and European governments must focus on contributing to these solutions, which means emphasizing growth over sacrifice and cultivating widespread buy-in rather than casting blame. The current approach of downplaying the importance of global emissions-reduction efforts and exaggerating the impact of domestic climate action, taken in isolation, puts us all on the wrong path.

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