Thank you so much for that very generous introduction. It's really a great, great delight for me to be here today. You and I have been carrying on conversations in Zurich, in New York. It's truly a pleasure to be here in Beijing, in your home base, and to meet Professor Wang Huiyao here. Huiyao and I look forward very much to our conversation to follow. It's the beginning of what I hope will be an ongoing conversation. We have very many interests and very many friends in common. I'm actually thinking in particular of a piece that you published back in May on leveraging China's green transition for global climate mitigation. In some ways, that piece offers the core of what I want to be talking about today. But what I want to do in my remarks is to frame the questions, the challenges that you outline there in a larger historical setting. Perhaps this will help us to think through the situation that we're in. If I can maybe have the first slide. Thank you so much. It is easy when talking about China's industrial development to fall into a sense of hyperbole, that we may in some senses be exaggerating what's going on. In this particular case, there is in fact a need to, in a sense, restate the hyperbole. One of the challenges of thinking about China's economic development, material economic development, especially the energy side of China's economic development, is whether or not we have the terms and whether we have the historical experience large enough to do justice to the radicalism of what has happened and therefore also the challenges that lie ahead. Part of my mission, as I see myself in intervening in Western conversations in the current moment, especially on what you might call the progressive side of climate politics in the West, is to bring home the scale and the drama of what needs to happen and what will be driven by the Chinese side, what in fact is already being driven. What this requires us to do is, if you like, to pinch ourselves.
This graph, which comes from Our World in Data, a very familiar source, is as staggering a graph as I could possibly put on this board. And we look at it and just go, 'Oh yeah, well that's what we know is going on.' This is coal production in recorded human history. This is species-being in the Marxian sense. All the humans who've ever lived, this is how much coal they have ever mined. And I don't need to tell you, but coal is a really good proxy for modern urban industrial development. Without it, no industrial revolution, no industrial capitalism, no fully organic surplus value production and exploitation as Marxian texts laid it out in the 19th century. And if you use this metric, it is impossible to avoid the conclusion that the history of our species on the planet—and I do not exaggerate, this is all the numbers there are, there's not some other bit of unrecorded energy history out there that isn't captured here—it falls into three phases. The phase up to 1750, where human societies relied largely on a somatic biological energy regime: firewood, human power, animal power. The period between 1750 and the end of the 20th century, which was the classic industrial regime started by the British, copied by the Germans, the Americans, the Japanese, the Soviet Union, by China in the phase of development in the '50s and '60s. What we take to be industrialism. And what crucially for our purposes today, climate politics at a global level was framed around in the 1980s and 1990s, when we thought we knew what the climate problem was, and it was American-centered, it was Exxon, it was Texas, it was Crook, it was Dura, it was Europe, it was Western industrial history. And the third phase in the history of global economic development starts within, I think, literally all of our lifetimes. Everyone in this room is old enough to be part of this history, because it starts almost on the dot of 2000, and it is this explosive curve here. Because again, let me just reemphasize, there's no out here. There's no other bit of history we haven't considered. This is all of fossil fuel history as summarized by the coal variable. And you can see what China did to that history in the last 25 years.
And it's a sudden, utterly radical break with all previous human history. It's a break with China's previous history. China had heavy industrial development in the Mao period, which was heavy, it was large, it was incredibly inefficient. In the early phase of opening up and reform under Deng Xiaoping, there were two radical policies: the one-child policy and the other radical policy is energy efficiency. So in that period, China grows without exploding the fossil fuel envelope through the late 1990s. And then within all our lifetimes, something completely mind-blowing begins to happen in China. It shocks the Chinese government apparatus itself. No one can really keep up, and we see this huge explosion in coal consumption and production, which is literally unlike all previous recorded human history. And this is one dimension of it, but it's also true for steel, it's also true for cement, and it's what we see all around us. And the West will often say it's driven by exports to Europe and the US. You all know that's nonsense, that's maybe 10 to 15% of Chinese growth. Most of it is Chinese urbanization. It is the building of buildings like this, the one that we're currently in. Dan was telling me this is a building that came from the '80s-'90s period. It is the construction of China's massive new cities, the urbanization of new migrants of 500 million people, and the modernization of the entire Chinese housing stock in the course of 30 years. One of the most staggering numbers—those of you who know me know how much I carry this close to my heart—but it was in an IMF report. Almost 90% of the apartments that Chinese people live in today, all of you lived in and grew up in, were built since 1990. As a European, that's unimaginable. I've actually barely ever lived in anything that was built before 1990. My whole life, right? In China, everyone has lived in a churned, remade fabric. And the basic argument of what I'm going to say is that that changes the climate policy game, because if I can have the next slide, please.
Chinese climate policy in the 1980s and 1990s was formulated around this bit of fossil fuel history. It was a Western-centric story. It was an oil-centric story because it centered on the United States. It was largely the diagnosis of Western scientists of a global problem. It followed an incredibly classic stereotype of the formulation of global problems by Western intellectuals, which in this case they could also claim culpability for creating. You could argue—I would say—that the climate problem as it was formulated at Rio and at Berlin and then in the Kyoto Protocol was the last great Western cause. We did it. We diagnosed it. We have to save the world from the consequences of what we did and are still doing. And what we are still coming to terms with is the consequences of what happened in China in the last 25 years. Because that changes the game. It changes the game in a negative sense. You could say it changes the game because it accelerates the climate crisis at an absolutely dramatic pace. But it changes the game also because it calls the bluff in thinking about development. China actually delivers on the promise of development. The West had talked about development for decades. China actually does it. And when it does it, even if its per capita emissions are at European rather than American levels, because 1.4 billion people are carried along by this process, it completely changes the geography, the geoeconomics of the climate story. And it makes China, whether comfortably or not, whether this is convenient for Beijing or not, the dominant player. And what I'm doing right now is actually writing a history of this moment. It's really fascinating. All the way down to the late '90s, climate politics in the world was conditioned on the expectation that China might never overtake America's emissions. The most activist American business opinion argued that China would overtake America's CO2 emissions in the 2010s. In fact, China overtook America's emissions in 2006. Right? And from that moment onwards, it took time, but Beijing was faced with the increasingly awesome responsibility of realizing that China is the decisive variable in climate politics going forward. And that is the world, that is the history that we are dealing with. This is the era. This is the dimension in which the overtaking of the West by Asia, and principally by China, has happened first, most dramatically, and we actually have to come to terms with this. You will know that military technicians argue about when China will overtake the US, and economists argue about purchasing power parity and current dollars, and so on, and we don't know when China will overtake the US. But in climate politics, it happened 20 years ago. China's electricity production today is twice America's electricity production. Twice. So there's not an argument about the relative size of the economies as physical apparatuses. Can I have the next slide, please?
So 1990s climate policy followed a Western, US-dominated energy history. It was oil-centric. Coal was relatively marginal. It was a Western transition model of climate policy that dominated, where it was about marginally tweaking downwards energy consumption away from fossil fuel towards less polluting sources. Policy tools that the Europeans and Americans pushed were largely negative. It was about carbon taxes, cap-and-trade, and all these kind of things. And it fitted within a minimalist policy paradigm which was neoliberal. The climate regime of the '90s and the 2000s isn't in contradiction to neoliberalism, I would argue, but actually is married at the hip. They're joined at the hip. In the West, if I can do a click, China destroys that paradigm. Oil is secondary. Coal is absolutely dominant. Growth, not substitution, is the key dynamic. Carbon taxes, cap-and-trade are present, but secondary. Industrial policy is king, and it fits within China's unique policy synthesis, which is clearly not easily assimilable to anything that we could call neoliberalism. And that, I think, is the reality that we are communicating about globally, and it's really difficult to talk about this because it goes to such fundamental issues. Can I have the next slide, please? The scale of the challenge is spectacular. This is what I mean about the difference between the way in which the Europeans and the Americans think about the energy transition and the way in which China will have to go to bring about the energy transition. One of the most famous images for the energy transition in the West, since my childhood, is steering an oil tanker. If you think about an oil tanker, it's huge, it's slow-moving, and you can only move it really gradually, right? China's energy transition problem is like a race car. A huge race car. The biggest race car anyone's ever seen. And we're going to go like this and then we're going to swing it around and head it down. No one has ever seen a physical process of transformation like the one that China is currently contemplating. It's not the same problem as in the West. And this is the first thing I think to get our heads around, right? The drama of this graph here. It is such a different type of problem. It's all about growth. It's all about change. It's not about slow substitution, right? So in the philosophy of history, we talk about Europe and the end of history hypothesis. Fukuyama, you will have heard of it. This, I would submit, is a Fukuyama-style energy transition. Gradually, gradually, gradually, the Germans and the Dutch are going to persuade themselves to do things even more optimally and even more greenly, and they'll recycle a little bit more, and then we'll get to net zero and stability. That's not China's story. It's drama from start to finish. Huge urbanization and then the most spectacular decarbonization. If we're actually serious about the promise of net zero by 2060, if you're serious about that, the implications are utterly spectacular.
Can we have the next slide, please? I would argue, in fact, that so far the framing of the climate change problem from the perspective of the US and Europe obscures not just one but three alternative prospects that face the world. And we think about the energy transition not as the unipolar model of the '80s and '90s, the Bill Clintons, the John Kerrys of this world, or the Joschka Fischers in Germany. But if we think about it as a global proposition, we have four regimes. We have the high per capita energy consumption, low-growth world, which is where the problem was first conceived. We have the high per capita energy consumption, high-growth world, and that's China. At this point, per capita energy consumption in China is at the same level as in much of Europe. Right? There is no hiding place anymore. CO2 emissions per head of the Chinese population is at par with Germany and substantially higher than Britain, France, or Italy. Obviously half the American level, but the American level is this obscene special world of Canada, Australia, and the Gulf. Then there is the Indian case, which is low per capita emissions and high growth, and their question is how do we change the direction of a growth path which is really rapid. And then there's a billion people in sub-Saharan Africa who, up to this point, don't have a viable growth model, right, and exist at incredibly low levels of energy consumption. And really, if we look forward to the next 30 to 40 years, the problem of the energy transition and global climate policy is the relationship between these four components. And that's what I want to spend the rest of today's talk talking about. Can we have the next slide, please? It's always been the case, if you go back in the history of climate policy to the 1980s and 1990s, everyone's always understood that this won't work—the energy transition, the move to a green energy system—unless it is rolled out to the entire world, because no one has really been able to contemplate a world from the '80s onwards, from the Brundtland Report on sustainable development, it has not been a plausible suggestion of a future that the world doesn't develop. Right? Once upon a time you might have said billions of people are condemned to poverty. That isn't a plausible hypothesis from the '70s and '80s onwards. So there's always been an idea that we need to roll out green technologies. But the problem, of course, is that up to the present moment, until the very recent past, those technologies have been utopian. They've been hypothetical. So what we've seen is various types of development policy which have been financial architectures rather than actually translatable solutions. Can I have the next slide, please?
China's—sorry for the coarseness of this graph, but the numbers are really dramatic. They come from IRENA. China's huge surge in renewable energy capacity changes the game, and it changes the game for everyone in those four quadrants of the global energy transition. I don't need to belabor the point here, but the numbers really are worth thinking about. Here are from IRENA the annual net additions in terms of gigawatts of fossil fuel, of wind, and of solar. And this is China compared to the rest of the world. And what this tells you again is that what we are going through, and what China has gone through, not in one but in two bursts, right? There's a big burst in China if you look at solar in the 2010s, and then a second huge, gigantic surge in the last two years. So as a historian, again, I'm insisting on specificity. This is a fast-moving story with a profile of acceleration that's truly dramatic, and it changes the balance radically between China and the rest of the world, crucially in the dimension of solar and also in terms of wind, where China's dominance is, if anything, even more spectacular than it is with regard to solar. The question mark, of course, is what is the fuel future of China's ongoing investment in fossil fuels. China, as you will know, is the only substantial global investor in coal at this point. I mean, these are really mind-blowing numbers. What this is telling you is that nowhere else in the world is investing positively in fossil fuels at all last year. The only country adding any substantial fossil capacity on Earth is China. The only country. So when I say that China becomes the singular center of the entire global energy drama, I'm literally not exaggerating. It's true. It is the entire fossil game and by far the dominant wind and solar player. And to reiterate, global politics is having a really hard time adjusting to this utterly lopsided state of affairs which has emerged since COVID, really. This wasn't the case before COVID. China, in fact, went through a lull—many of you will remember it—in renewable energy investment just before COVID as the subsidy regime was shifted. And then in the aftermath of COVID, there has been this sudden, spectacular surge.
Can I have the next slide, please? And what I want to say is that this opens up possibilities of transformation at an even larger historical scale. Like I started by saying that the entire economic and industrial history of humanity can be summarized through that coal consumption graph. But what we are looking at now, with the massive rollout, with the spectacular rollout of solar and wind, is a transition at the anthropological level. Right? What we're essentially talking about is moving a system from a hunter-gatherer mode of energy procurement, which is what fossil fuel extraction is, to a farming model of fuel generation. We're going to produce power in the same way as we produce food. We cannot feed 8-plus billion people by hunting and gathering. We feed them by intensive agriculture. We are going to provide the energy systems that we need in the same way, and this is what's being made possible by the gigantic scale of solar and wind. Can we have the next slide, please? The other thing that this does is that we move from a world in which energy is essentially produced in autonomous ways. In other words, people locally burn their fossil fuels to drive their blast furnace or fire their car. It truly is. You spend a few days in Beijing and you become increasingly shocked by the internal combustion engine reality of the city that I still live in. I mean, in the Hutong I'm living in, there are no internal combustion engine cars. Everything is electric. It's silent. It moves past us. The implication of that is immediately less pollution. But it also means that the entire system is a system. When I fill my car up with petrol, it's for me to go burn it wherever I like. Right? That's the freedom that petrol offers, the fossil fuel civilizations. This is why the Americans are so profoundly committed to it. Be part of an electricity-based system and you are inherently dependent on a network. You are profoundly and irreducibly dependent on a complex interchange. So here we are looking at a transition at the level from fossil fuel autonomy, if you like, to networks. And people in the West are increasingly contrasting the American model of fossil fuel autonomy with a Chinese model of electrostate. So it's an inherently political organization.
The next slide, please. And the third thing that has suddenly become possible is that global transformation at a technological level is in fact truly conceivable. So the idea of electrifying Pakistan—these are the numbers I've quoted here from 2024. This is one of the truly amazing stories. Pakistan, an emerging market economy, obviously one with very close connections to China for diplomatic reasons, a chronically broken power system—basically imported a national capacity's worth of solar power and batteries from China in a matter of months. This is becoming conceivable. Can we have the next slide, please? And it's happening. These are data from Bloomberg, right? These are not Chinese government sources. These are data being compiled by Bloomberg showing the transformation of the global energy system being enabled by the cheap provision, the ultra-cheap provision of Chinese solar. So three fundamental transformations: from hunter-gatherer to farming energy, from autonomy—individual fire burning—to electrostate, and the third fundamental transformation: the possibility of a truly global rollout. And can we have the fourth slide, please? This is delivering the second China shock. This, combined with the tech revolution, China's incredible advances in tech and AI, symbolized, of course, for those of us in the West who follow the American markets, by DeepSeek. This is the core of the second China shock. Unlike the first China shock, analyzed by American labor economists, which was a socio-political shock—in other words, it upheaved American society in parts—this is one that actually challenges European and American leadership at a strategic level.
Can we have the next slide, please? And here again it might be useful to think in terms of the way in which this is disrupting Western politics. So this is a two-by-two in which I've put energy strategies down this side and international strategic options on this side here. And what this allows us to map is the narrowing window, if you like, for progressive, dynamic green strategy in the West. At one end we have fossil rear-guard American hegemonic strategies, which are exemplified by certain parts of the Trump administration, certain parts of the American power apparatus, which you might describe as an energy dominance strategy. This is how they themselves speak about it. You might also, however, think about a future strategy for the US which consists of a kind of fossil isolationism. It's hard to deny, I think, increasingly that this might be a strategy which the Americans are currently aiming at. Let China do the green energy transition. We will live within our fossil world. And it's possibly one of peaceful coexistence, except the climate will of course continue to be stressed, but it doesn't imply an international position. What we saw with the Biden administration was an attempt to reboot global hegemonic aspiration on the part of the United States and to combine it with green energy transition. This was the talk about a green Marshall Plan, just energy transition partnerships, all of them quite explicitly pitched against China in a progressive, modernizing green vein. The challenge for green modernization strategies, which in fact prioritize green energy transition in the West, is increasingly whether it's possible to combine them with something you might describe as peaceful coexistence with China. That becomes the central question mark. Is this possible? Is green modernization politically viable in the West if it acknowledges Chinese leadership? And this was a question that we saw powerfully struggled over in the last German government, with Baerbock and Habeck of the Green Party, both the champions of the green energy transition and the champions of a relatively hawkish, values-based foreign policy. And the two things sat very uncomfortably next to each other.
Can we have the next slide, please? The challenge for the Europeans, the challenge for the Americans, is obvious. I think they are deeply fossil-fuel-committed societies. For the Europeans, you can read it off here. So this is the same numbers as we had earlier, as percentages. And what this tells you is another story of European decline, because this is the share of renewable investment that was attributable to Europe over the last 25 years. And you can see why the Europeans have an almost nostalgic attachment to the idea that they are the leading green power, because there was a period in the 2000s in which they were, to a truly dramatic extent. And in fact, if you speak to German counterparts, you'll hear them tell you that China's green industrial development is largely owed to the benefits of the German subsidy regime of this period. The humbling reality, of course, is that now they're all fundamentally eclipsed by the dramatic rise of China. This is the narcissistic problem for the Europeans. Is it possible really to get over the fact that China has become the dominant power? Can we have the next slide, please? So that's the political-strategic problem posed by the China green energy shock. What about the economics? Well, economically, China's new energy revolution is a huge shock because it's not the same as the first China shock. The first China shock was in fact initiated by Western elites themselves. Right? It was initiated by the generation of American policymakers in the '90s and the 2000s that saw huge benefit from bringing China into the WTO. It was initiated by people like Hank Paulson, who was Treasury Secretary for Bush, as Goldman Sachs CEO who was managing the strategic partnership with the United States. The price was paid in the West by a limited section of the Western working class who were hit by relatively low-value Chinese imports in sectors like textiles and basic manufacturing. And it was secured by the fact that Western populations, as consumers, were huge beneficiaries of cheap Chinese imports. So this was a stable social bargain as long as it lasted. The China shock 2.0 is much harder, potentially, for the West to digest because it's China-driven, not Western-managed. Right? If you want to point to a source of agency, it will be Made in China 2015, just for sake of argument. That's crude, but nevertheless, it gives you an idea of where the agency lies, and it challenges core interest groups in the West, deep down into the power structure of the West.
Can we have the next slide, please? So if you want to map the force field that is at stake here, it's obvious, but I think to me it's again and again worth putting this on the board. There are two groups of interest that are powerfully shocked in the West by the Chinese green energy revolution. The PV—photovoltaics, batteries—hit the energy-generating sector, that's the electricity-generating sector. And that's not oil, right? Oil isn't used for making electricity. That's coal and gas in Europe and in the United States, and that's a very, very powerful and entrenched group. The new energy vehicles hit the motor vehicle sector, and the motor vehicle sector matters. You might think America—Henry Ford, Detroit—in the United States, the motor vehicle sector is a subordinate player because Ford, GM, Stellantis are so lost now. But in Europe, they're the dominant interest group. And in Japan and South Korea as well, they're profoundly significant. So you have a two-pronged challenge. And behind all of them, to an extent that's actually really quite interesting—how buried it is—sits oil. Because oil sits at the intersection here. Because insofar as the new energy vehicles replace the legacy vehicle producers, of course the oil interests lose out. And oil interests in the US now allow coal and gas to do much of the heavy work in campaigning against green energy policy. So how does this play out? How do we go forward from here? How do we think, as social scientists, as historians, about a shock to society like this? Let me conclude by making a few observations about this. Perfect. Great. We're in great sync now. You see me coming. How do we think about this? Well, these are problems—and I've hung them up, as the Germans would say, at the level of world history and species-being—because these are problems, I think, which challenge the very foundations of modern social theory. And modern social theory in its classical form does offer us some ways of thinking about these problems. And Karl Marx is undoubtedly a thinker of an energy transition like this. And I'm going to leave that tradition for my colleagues in China to think through. In the West...
Unsurprisingly, perhaps, that's not the main mode of policy thinking about this issue. The main mode, if you want to understand the way in which critical social scientists in the West think about this issue, is Karl Polanyi. Why Karl Polanyi? Not because he's as brilliant as Karl Marx. He's a journalist. He's a second-order thinker, but what he does is to problematize and theorize, and they may be specialist. The last time I was in Beijing—why did I say that?—last time I was in Beijing, I ran into somebody who was a huge specialist of Polanyi, and they schooled me on Polanyi. So, no disrespect to Polanyi. He's a fantastically interesting thinker. He's a fantastically interesting thinker because he thinks about the relationship between capitalism and democracy. And whether we like it or not, on either side, the problem of the green energy transition in the West is thought through the prism of the relationship between capitalism and democracy. It is through its apparatuses that this problem is processed. And what Karl Polanyi diagnosed is not a neat dialectic, not a dialectic that resolves in a dramatic and final way, but a back and forth between interests in society shocked and then attempting to reassert leadership and control over society, what he called the double movement, in the process of economic development. Now he describes this for one phase. You may know, from the 19th-century unfettering of the economy, the making of the economy into this weird autonomous thing—Karl Marx, of course, writes about this in theories of alienation, for instance, and the mystery of the commodity. For Polanyi, he's an anthropologist-historian. He looks at the 19th-century world almost like an anthropologist from Mars and says, 'These people are crazy. Why have they allowed the economy to run free like this?' How does society respond? It responds with social protectionism. It responds with tariffs on trade. It responds through the limitation of agricultural commodities to protect land. It responds through the creation of a managed money system like Bretton Woods to replace the gold standard. We enter the period of Keynesian management. And if you ask how Western theorists think about the way in which we expect the shock—this second China shock—to be managed, it's through mechanisms like that. Please don't be surprised by Western protectionism. It's the most obvious reaction in the world. The last time I was in Beijing, I encountered all sorts of indignant responses: 'Why are the Europeans resisting? Why don't they take our cheap, wonderful BYDs?' Because there are 2.7 million people who work in auto manufacturing in Europe, and because it's a democracy, they're voters. And so if those voters vote the wrong way, we have huge governance problems. And I can show you the AfD populist in a German car factory who's mobilizing a right-wing, nationalist, racist politics, which you'll like even less than the politics you'll get from the Red-Green Coalition, the Ampel Coalition, or the CDU. So on the part of Beijing, a realism about how these mechanisms work is really fundamental.
What interests me, of course, being here—maybe we can have the final slide—is how this plays out in China. Because I've described this as an international logic, but if you go back to the beginning of the talk and you think about what China's got to do, you, me, and everyone else on this planet is hugely invested in how this story plays out here. Because we would, of course, be kidding ourselves to imagine that it doesn't play out here. I don't think anyone could be naive enough to imagine that it doesn't. China has been through far too many shocks, and we understand the political economy of those well enough to know that if China is going to leave the coal complex behind, there will be massive politics to be played out. Class politics, urban politics, regional politics between provinces which are coal-heavy and provinces which aren't. Those in the west that have a new energy future, those in the old Maoist rust belt that maybe don't have a new energy future. How is that going to play out? I was reading Caixin the other day—they had a brilliant report on Great Wall Motors. Not a firm that most of us in the West spend much time thinking about, because it's not BYD. Everyone in the West is obsessed with BYD. Why don't we think about Great Wall Motors? Because all Great Wall Motors does is internal combustion engines. It was described as a fossil in the headline of the Caixin report. It was really, really illuminating. Where are they going? The same bad, low-end markets the American manufacturers are going to. It is pursuing fossil isolationism within China in the current moment. Where is it going? Literally Russia. Great Wall Motors' major market right now is Russia. The other markets it's looking at are Brazil. It's looking at the middle-income market. So if China is going to accomplish that incredible hairpin bend, I want to know, as an outsider, how these political economy moments play out here, because there isn't a more important drama in this moment of history. What happens in the West is significant, but it is fractional compared to the scale of the stakes right here at home. Thank you very much.
