The energy shift is the economic race of the century. What will the US do to win?

If there was any doubt that we are now in a race to lead the global transition to a low-carbon economy, then President Joe Biden and President Xi Jinping did so in their respective Congresses in March. , just look at the speeches made less than a year ago. One week is different.

Biden celebrated an American industrial and technological renaissance with 15 million new jobs and a $650 billion private sector. investment,West told the lawmakers China must “win the battle over key core technologies” in a new era of “technological revolution and industrial transformation,” he said.

Both leaders are on the same page, at least in terms of understanding what is at stake. They see that a fundamental revolution in the global economy is taking shape, and that it is happening now hard and fast. And like any revolution, they know that economic and political power is up for grabs.

The less exciting news for Americans is that China has a huge head start in this race.

Only two years ago, the United States fully embraced the low-carbon transition under President Biden’s policies. inflation control law, CHIPS and scientific law and bipartisan infrastructure law, China has been building a cleantech industry for more than a decade.Last year alone, China invested $890 billion It rivals Switzerland’s GDP in clean energy and now produces nearly two-thirds of all electric cars.

As a result, China has gained strategic control of key supply chains for green and low-carbon growth.

For example, it controls 80% or more This means manufacturers in other parts of the world rely on Chinese companies for critical inputs such as polysilicon, wafers, and solar cells. China also controls 60 percent of critical minerals including cobalt, lithium and rare earths essential to the technology industry, EVs and clean energy.

But this paradigm shift in the global economy is a marathon, not a sprint. That means America can still catch up. To do that, the next administration will need to double down on anti-inflation laws and other policies that accelerate investment in America’s clean technology and advanced manufacturing capabilities.

The Inflation Control Act shows that America takes economic competitiveness seriously and understands the consequences of relying on supply chains dominated by economic rivals. However, the economic policies currently in place are only the beginning.

The signals to US investors and businesses cannot be wavering or mixed, and questions about direction arise because the rest of the world is moving forward and the US cannot afford to be left behind. There isn’t.

For example, it will soon be implemented in Europe. tax imported goods, calculated based on the amount of greenhouse gases emitted during manufacturing. Other regions are sure to follow suit. And at the last count, Over 40 countriesThe country, which accounts for half of the world’s GDP, has some form of carbon pricing in place.

This should be a wake-up call to all U.S. exporters, especially those in carbon-intensive sectors. Being high carbon is not a sign of laudable principled political resistance. It’s an increased financial responsibility. Export markets are at risk of being lost. Jobs and household finances will be hit hard.

What must be clear is that the transition to a low-carbon economy is no longer about the urgent need to tackle climate change. However, this can be a huge benefit if done correctly. It’s about jobs, innovation, markets, national security and, above all, fierce economic competition. It is an economic competition for the future.

Therefore, the next administration must do everything it can to further facilitate a rapid transition to a new economy, while prioritizing investments that address the growing vulnerability of communities across the country to climate change.

In addition to strengthening anti-inflation laws and other existing programs, winning this economic race requires urgent attention to three areas: A more comprehensive plan to strengthen communities’ resilience to climate change and a national focus on investing in and protecting nature and biodiversity.

Global warming is already causing significant economic harm to families and communities. Insurance premiums etc. skyrocketed For housing in areas susceptible to climate disasters. Additionally, major insurance companies are pulling out of states including Florida and California due to rising climate-related losses.

Result is, millions of homeowners People across the country are either uninsured or forced to pay premiums that threaten their financial stability. The extent of this problem is only beginning to be fully understood.

In this regard, the decision of the Federal Insurance Administration of the Ministry of Finance is as follows: start collecting Detailed data from local insurers across the country is welcome as it will give policymakers a comprehensive picture of how climate-related financial risks are impacting individuals and families across the country. This is an important first step. The next administration must not hesitate to make clear to the American people the seriousness of this growing crisis.

Knowing how climate risks impact homeowners at the local level can also help communities build preparedness for a world of increasingly extreme weather events. Vulnerable communities are not safe communities, nor are they economically thriving communities. Building climate resilience into national and local infrastructure and zoning codes is key to building a healthy and competitive economic future.

Finally, we need to pay more attention to our natural capital, which, while still abundant, is rapidly declining. Without healthy soils, clean air and water, and rich biodiversity, we cannot have a healthy economy or long-term economic competitiveness.but scientists warn us Our farmland may run out, our southern cities may run out of water, and 40 percent Many of America’s wildlife and natural habitats are endangered.

The next administration needs to tackle the natural crisis with the same urgency that the current administration has prioritized tackling climate change. Just as we put a price on carbon emissions, so that we can fund critical conservation and management efforts that restore natural ecosystems to health and sustain us in the long term. There is an urgent need to better price and value the services nature provides. – sustainable economic growth during the period.

There is much unfinished business for the next administration. The transition to a low-carbon world is the most important economic transformation in human history.

America might still win, but only if we treat it as the economic competition of this century. Now is not the time to be complacent. It’s time to double down.

John Morton is Managing Director and Head of the Americas at Pollination, a climate change investment and advisory firm. He is a former climate change counselor to Treasury Secretary Janet Yellen and served as senior director for energy and climate change on President Obama’s National Security Council.