How’s Your Mandarin?
By: Chandu Visweswariah
The last few centuries have seen dominance on the global stage by Britain, and then the United States. It is no surprise, therefore, that English has become the world’s lingua franca. In the remote villages of Africa and India, parents tell their children to learn English because it opens up a world of opportunities. Alas, global energy dominance may well lead to a shift in global language.
This may be a good time for people outside China to learn Mandarin. The passage of the “Big Beautiful Bill” yesterday by Congress marks a quantum leap in this direction. The race is on to define the future of energy, and the U.S. is losing. Tom Friedman of the New York Times calls this bill the “greatest act of strategic self-harm.” The bill does damage to clean energy:
- Tax breaks and other Inflation Reduction Act (IRA) measures for solar, wind and electric vehicles are slashed. There could be fewer electric vehicles by the tens of millions in the next decade alone, due to this bill. The U.S. manufacturing boom spurred by the IRA will be derailed.
- Measures to fight climate change (or even study climate change) have been dismantled. Tax credits that encouraged homeowners to perform energy audits, upgrade insulation, buy heat pumps or install rooftop solar will be terminated.
- Federal approvals for wind farms have been halted. And on and on.
The same bill encourages fossil fuels:
- Public lands and federal waters have been opened up for drilling. Royalty rates have been reduced. Oil and gas drilling and pipeline permits have been fast-tracked.
- Massive subsidies for the fossil fuel industry continue and are even increased, while the renewable energy sector is asked to rely on the unadulterated marketplace to fund its deployment.
- The penalty for leaking methane, a poisonous greenhouse gas, has been delayed by ten years. The fossil fuel industry has been granted additional tax breaks.
- The U.S. is pressuring other countries to buy our fossil fuel poisons. And on and on.
The two largest economies of the world are by far the U.S., at a 2025 nominal GDP of $30.5 trillion, and China at $19.2 trillion. Let’s look at their exports of fossil fuels and clean energy technology (‘cleantech’) as reported by UN Comtrade.
There’s a stark difference between the “energy dominance” strategies of the two countries. The U.S. is offering 19th century moribund technology while China is offering 21st century innovations. Never before has the U.S. in its young history walked away from innovation and new paradigms as significantly as with the passage of the Big Beautiful Bill. There cannot be energy dominance without renewables. We are squandering our opportunity to lead the world. Americans created the first photovoltaic cells in the ’50s, invented lithium-metal rechargeable batteries in the ’70s, invented lithium-ion batteries in the ’90s (in fact, right here in New York State), made some of the earliest electric vehicles, but that lead is now frittered away. Now the 11 largest solar farms in the world are in China and the two largest auto factories in the world will soon be EV plants in China. China makes nearly all the solar panels and batteries in the world and is the #1 manufacturer of wind turbines.
The energy importers of the world have a choice. Yes, they can buy fossil fuels from the U.S. and some of them will, for a while. But it exposes them to price shocks and geopolitical events like wars and blockades of shipping routes. Recent tariff uncertainty and doubts about long-term partnerships further cloud matters. Fossil fuels are not the cheapest way of obtaining energy, and of course, they are not good for the environment or human health. And electricity generation plants that use fossil fuels take at least 3 years to commission.
The alternative is to import cleantech from China, while trying to develop domestic expertise in wind, solar, batteries, EVs and heat pumps. This way, there is local reliance on resources like sunshine and wind instead of staying beholden to daily shipments of fossil fuels from abroad. Two profound reports make it clear why this strategy is advantageous. A report from Ember, an energy think tank, reminds us that solar combined with the right amount of batteries can provide dispatchable energy 24×365 cheaper than any other energy source, and the generation plants can be built much faster. A report from Axios points out that President Trump’s proposed tariffs have the effect of forcing countries to be as self-sufficient as possible, thereby perversely helping the clean energy transition. Thus, investing in solar farms, utility-scale battery storage, electric vehicles, electric charging infrastructure and heat pumps constitutes a vastly beneficial strategy.
Fossil fuels are commodities, whose price will increase over time. Batteries, solar modules, EVs and heat pumps are manufactured goods that benefit from year-over-year reductions in cost. For a while, both fossil fuels and cleantech may boom, but very soon there will be a massive divergence with fossil fuels losing and cleantech winning. Already, almost all new electricity generation capacity in the world is from renewable sources. There are three main reasons for this: the first is economics. Once cleantech is by far the superior solution in every way, there will be no market for fossil fuels. And that day is already here! At the same time, China is widening its technological lead with each passing month. The second reason is that energy independence and avoidance of chaos is high on the wish list of energy-poor countries (especially Europe, which imports 55% of its energy). And the third reason is that the worst predicted harms of climate change will inevitably prove correct and fossil fuels will be recognized as the poison that they are. What Energy Secretary Chris Wright has described as a “side effect of building the modern world” will be the last nail in the coffin that erodes U.S. dominance.
Back to Mandarin for a moment. The argument is simple: With the passage of this bill, it is obvious that the U.S. is blundering while China is on a growth path in terms of energy. The country that dominates the energy space will dominate Artificial Intelligence (AI) due to AI’s intensive energy needs. The country that dominates energy and AI will dominate the world economy. The country that dominates energy and AI and the world economy will dominate the world militarily. The Big Beautiful Bill and its supporters are stubbornly ignoring the impacts of climate change, perversely canceling progress from the Inflation Reduction Act, and doubling down on old, poisonous technology while impeding us from competing where it matters the most. As time passes, policymakers who supported the bill will be held to account for this misguided and strategic blunder that surrenders the future so meekly.
中国感谢美国提出的“大美法案”！(China thanks the U.S. for the Big Beautiful Bill!)
