China succeeds in greening its economy not because, but in spite of, its authoritarian government.

From an appalling environmental scorecard 20 years ago, China has pioneered a “global green shift” towards renewable energy and recycling. The country’s drive to dominate renewables manufacturing benefits both China and the world, by sending technology prices plummeting.

Many have attributed this success to China’s authoritarian political regime.

Unlike a democracy, this line of reasoning goes, the state can override special interest groups or opposition parties to impose “authoritarian environmentalism”. This allows a rapid and encompassing response to severe environmental threats.

We take a different view. As the chief investigators on an Australia Research Council Discovery Project examining East Asia’s clean energy shift, we are examining why and how some East Asian countries – including China – are pursuing ambitious renewable energy transformations, and what Australia might learn from these countries’ experiences.

We argue China’s success in greening and growing its economy is not because, but in spite of, its authoritarian government.

Not that different

China’s approach to greening shares much in common with democratic countries such as Germany, South Korea and Taiwan. All have ambitious programs to rapidly build domestic clean energy industries and “green” their power generation.

As such, our project emphasises the link between China’s green shift and what we call “developmental environmentalism”.

Developmental environmentalism refers to a state approaching greening as an opportunity to promote national techno-economic competitiveness. It helps explain both the drivers of the green shift and the means of its execution.

The “means” are less about authoritarianism and more about the state’s capacity to induce the private sector into a cooperative relationship.

This type of negotiated relationship between the state and industry is the exact opposite of authoritarianism, which pursues its goals irrespective of the wishes of the private sector. Indeed, the pages of history tell us authoritarian leaders are far more likely to misuse their concentrated economic power, resulting in developmental failure.

Democratic successes

China is not alone in its green shift. In fact, some of the world’s most ambitious national greening programs have sprung to life in democratic settings.

Germany

The clearest example is Germany and its widely admired Energiewende (“energy transition”). Germany took an early lead in the development of solar devices through government-sponsored industrial programs.

Then in 2011, in the wake of the Fukishima nuclear disaster, Chancellor Angela Merkel announced the shutdown of Germany’s nuclear power stations.

Countries around the world are now emulating Germany’s Energiewende.

South Korea

In one of East Asia’s most vibrant democracies, South Korea, the election of President Lee Myung-bak in 2008 signalled a shift from intensive fossil-fuel development to “low-carbon, green growth”.

Lee’s focus was on greening the economy by investing in renewables and related infrastructure such as smart grids. His successor in 2013, President Park Geun-hye, continued this approach.

Finally, after President Moon Jae-in swept into power in 2017, South Korea committed to scaling down its use of nuclear energy.

Taiwan

Taiwan provides another fascinating example of a proudly democratic country that has followed in Germany’s footsteps. National efforts to establish a renewables industry began in 2009 under President Ma Ying-jeou. These initiatives targeted various clean energy industries for promotion, including generating solar and wind facilities and batteries.

However, just like Korea, the country’s over-reliance on nuclear energy (facilitated by a state-owned monopoly in the power sector) prevented the growth of a market for renewables.

A breakthrough in the country’s highly contentious debate over nuclear energy came with the election of President Tsai Ing-wen in 2016, who committed to the complete shutdown of nuclear reactors in the country.

Developmental environmentalism in action

These examples provide a clue that China’s ability to green its economy stems from something other than its authoritarian political system. We argue China’s success in greening stems from developmental environmentalism in action.

This does not simply mean a state that is “pro-development” and “pro-environment”. Rather, policymakers see greening the economy as chance to gain a competitive edge over other countries. The pursuit of strategic industry development goals involves nurturing – not displacing, as would occur in an authoritarian setting – “governed interdependence” with the private sector.

Best depicted by the Korean example, developmental environmentalism as a policy initially emerged as a response to threats to national industrial competitiveness. These included acute dependence on fossil-fuel imports, which are highly volatile, and global competitive pressures in the race to gain an early lead in the green economy.

Developmental environmentalism is also a strategic response to domestic challenges, such as the need to drive new sources of economic growth.

Lessons for Australia

If an authoritarian government provides little to no advantage for coordinating a green shift, what lessons might these countries have for Australian policymakers?

The key lesson is it’s not about designing the perfect constellation of policies or about pouring more money into entire industries.

Developmental environmentalism involves the political will to take big risks. Policymakers must target technologies – or segments of the economy – where government support could build national competitiveness.

Of course, this means creating a strategic, long-term approach to industry development, coordinated with the private sector.

Despite political gridlock, Australia is well placed to establish a foothold in the rapidly growing clean energy industry.

As the nation’s leaders engage in a fruitless debate over building new coal-fired power stations, Australian companies with world-class strengths in clean energies are emerging. Nowhere is this growing confidence more evident than in the blossoming of companies that have commercially ready smart microgrid and energy-storage solutions.

It would be a great shame – if not a national tragedy – if these companies were allowed to be picked off one by one by foreign multinational enterprises. This is the sad and familiar story of Australian manufacturing: highly innovative companies – a testament to our wealth of knowledge – are bought out, intellectual property rights absorbed, and manufacturing eventually outsourced. Often, shells of our prized national assets (typically the marketing and sales divisions) are all that remain.

Yet, in the absence of a coordinated national strategy that focuses on building a national value chain or ecosystem of upstream and downstream players – as the Koreans and Taiwanese have done in smart microgrids – this future appears all but settled.

 

 

27 May 2019

THE CONVERSATION