This conversation has been edited for length and clarity.
Tim McDonnell: Why is it so important to build a bigger market for U.S. clean technology exports?
Brian Dees: When we think about where the biggest emissions are going to come from and where the biggest investments and transformations are going to be needed over the next few decades, it's outside the U.S. So boosting the U.S. economy with clean energy and expanding that globally is the surest way we can actually accelerate decarbonization on a global scale.
And this is what's most relevant about the Marshall Plan analogy. When people think of the Marshall Plan, they think of U.S. generosity to postwar Europe. But equally or more important was the industrial strategy of expanding markets for U.S. producers who had built capabilities during the war. So a strategy that's both generous to our allies and pro-U.S. is the right economic and political approach. If we can help U.S. innovators expand their share of growing global markets while simultaneously positioning ourselves to be a generous and reliable partner to struggling, strategically important developing countries, we have an opportunity to significantly advance our strategic and economic interests.
TM: So how does this work and how much money are we talking about here?
BD: First, the United States needs to have financing authority with the scale and flexibility to meet the challenges. We also need to work with countries considering the energy transition to identify areas where we can be agile and use U.S. public capital – loans, loan guarantees, debt, equity – to spur project investment. Second, what I call resilience authority, which gives the United States a set of new tools to intervene in global markets, like the Strategic Petroleum Reserve, to stabilize markets and expand investment. For example, companies looking to invest in lithium today are having a very hard time with the volatility of lithium prices. Third, we need to address China’s role in these markets head-on, with a realistic and coordinated strategy of tariffs and border adjustments that encourage greater trade rather than deepening isolation.
TM: How is what you're proposing here different from the approach China has taken so far to dominate global clean energy trade?
BD: I don’t think the view that this is a zero-sum competition between the United States and China, or China and the rest of the world, is realistic or wise. China will continue to play a very important role in the global clean energy supply chain. But the strategy that China is currently adopting, which is clearly overproducing for export and underconsuming at home, is not sustainable for either the Chinese economy or the global economy. We need to move to a more balanced, more resilient equilibrium. We will do more to diversify our supply chains, not just by building up U.S. export capacity but also building capacity in other countries. And we need to be prepared to internationalize our approach to tariffs, and to reflect that when we talk about serious concerns about Chinese excess capacity in areas like steel, for example, it’s not just the United States that is concerned, but Brazil, Vietnam, Canada, Mexico are also taking trade actions with us.
TM: Right. If your goal is just to get to net zero as quickly as possible, wouldn't you be better off getting China to make your products as cheaply as possible? Is there a risk that trying to get countries to buy more expensive U.S. products actually slows down the adoption of clean technologies?
BD: That's a very fair question. First, a strategy in which China deliberately uses non-market mechanisms to become the dominant producer is not a sustainable strategy for dealing with climate change in the medium term. The idea that China produces everything and other countries rely on China is not a viable economic or political strategy. The question is how to reach an equilibrium point where China seeks to become more diversified, rather than dominant, while acknowledging that it will continue to play an important role. The goal here is not simply to replace Chinese production with U.S. production, but to build a more stable and diversified technology base globally.
TM: Is there a risk that China would respond to a plan like the one you're proposing with further trade restrictions, as we saw with graphite exports last year?
BD: This is a complex issue that needs to be approached carefully. I don't think that unilateral aggressive escalation with China is the right strategy. Far-reaching proposals to completely decouple from China are unrealistic. There are sensible ways to engage with China and others to avoid miscalculation. Frankly, one of the responses I would expect is actually the opposite direction, that is, for China to say, “Let's put more effort into the Belt and Road Initiative, make it more generous, less coercive, more truly green.” That way, we will have helped move China in a more constructive direction as it thinks about its role outside of China.
