Canadian Academy Discover, Publish, Thrive
Ensuring that global warming stays below the two-degree threshold outlined in the Paris Agreement necessitates the development and effective implementation of new technologies for reducing greenhouse gas emissions. China, a pivotal player due to its substantial carbon emissions, has recently committed to achieving carbon neutrality by 2060, demanding a significant cut in emissions. While China leads in vital sectors like solar photovoltaics, batteries, wind turbines, and nuclear power plants, the question remains whether its contribution to global low-carbon technology innovation aligns with its considerable needs or if it still relies heavily on technologies developed by industrialized nations.
China’s low-carbon innovation through research remains limited:
Patent data serves as a common metric for gauging technological innovation resulting from research efforts. Detailed classifications of patented inventions enable the identification of technologies addressing the greenhouse effect. While most countries provide comparable patent data, the lack of uniformity in unit values poses a challenge. The prevalence of patents protecting insignificant inventions skews the measurement of innovation, particularly in China, where a higher tendency to patent includes low-quality inventions. To address this bias, one solution is to consider only inventions protected in at least two countries, signaling the commercial viability of the invention.
Figure 1 illustrates the evolution of Chinese low-carbon innovation from 1985 to 2017, revealing a substantial increase in patent activity. Despite China ranking as the fifth-largest innovator globally in 2017, its performance remains below leading countries like Japan, the United States, and Germany. China excels in low-carbon information and communication technologies and building technologies but lags in wind and solar photovoltaic energy.
While China accounts for 5% of patented inventions across all technologies, it is less specialized in low-carbon innovation compared to most industrialized countries. The rise in low-carbon innovation appears more tied to a general acceleration of innovation rather than a targeted effort to combat climate change. China’s innovation strategy seems more responsive to immediate economic needs than a deliberate focus on building a low-carbon technology infrastructure.
Examining international technology transfer, the data suggests China’s strong connection to global technology flows, receiving a quarter of global low-carbon patent exports in 2017. In contrast, other emerging economies combined account for less than 10%. This trend has persisted for two decades, with Chinese patent imports steadily increasing since 2000. Conversely, only 3% of Chinese inventions were exported, challenging the perception of Chinese research leading at the technological forefront.
But China is a major player in the industrialisation of low carbon solutions:
The assertion that “China is the world’s factory” is particularly apt when applied to the wind, battery, and solar photovoltaic sectors. In these domains, innovation is not confined to specialized research entities, but also emerges from the continuous refinement of production processes in factories, the expertise of workers deploying technologies, and the economies of scale resulting from mass production. Arrow11 introduced the concept of ‘learning by doing’ to describe this industrialization-driven innovation, contrasting it with ‘learning by searching’ in laboratories. Although not patent-driven, this form of innovation, exemplified by China’s solar photovoltaic industry, is rapid and effective.
The Chinese solar industry’s remarkable progress serves as a case in point. Despite a decline in research innovation from 2011 to 2014, China’s entry into the solar value chain led to an eight-fold reduction in the average cost of photovoltaic panels between 2006 and 2017. This surge in equipment performance did not stem from major research breakthroughs but rather from Chinese companies adopting standard technology, implementing large-scale production, and swiftly outcompeting Western rivals.
The decline in innovation through research is evident in patent data, with a five-fold decrease in patent applications from 2011 to 2014 in the United States, Japan, Germany, and Korea. This period saw a form of “creative destruction” in the photovoltaic industry, resulting in the success of traditional technology over more innovative solutions.
However, the recent trend in photovoltaic innovation may not be universally applicable to other sectors, and the dominance of ‘learning by doing’ over ‘learning by searching’ is likely temporary. Initiatives like the “Solar Power Initiative” launched in 2021, with European Commission support, aim to relocate the value chain to Europe through innovation. This underscores the vital role of industrialization-stage learning and China’s manufacturing expertise in influencing the global economic landscape and fostering innovation.
Economic globalisation and low-carbon innovation:
China’s success in solar photovoltaics can be attributed to its integration into the global economy. The country’s companies obtained the necessary technologies for local production at low costs by participating in the competitive international goods market. They imported purified silicon mainly from Norway and the United States, financing their learning process by exporting modules to Europe, the US, or Japan, benefiting from subsidies.
The international division of innovative work, where advanced Northern countries generate innovation through research and China contributes to industrialization, is a common model. However, economic factors, supply chain disruptions during the Covid-19 epidemic, and geopolitical tensions between China and the United States are challenging this model. A “re-regulation” of international trade is observed, especially in innovation and technology, exemplified by restrictions on Chinese company Huawei.
The critical question is whether this shift will favor low-carbon innovation. The article explores whether Western countries and China can cooperate to address climate issues and implement emission reduction policies. Despite global pollution being a shared concern, recent signals are mixed. While China committed to carbon neutrality by 2060 and the US rejoined the Paris Agreement, the 14th Five-Year Plan prioritizes R&D in various fields, reflecting a desire to reduce dependence on American technologies rather than proposing new low-carbon solutions.
The plan’s lack of ambition regarding climate objectives raises concerns, and the proposed carbon tax at the EU’s borders may trigger trade conflicts with less environmentally virtuous countries, potentially impacting China or the United States. The article concludes by questioning whether these developments will strengthen China’s incentive for decarbonization or lead to trade conflicts that weaken global climate cooperation, essential for effective climate action.
Source:
Glachant, M. & Touboul, S. (2021). China’s Contribution to Low-Carbon Technology Innovation. GREEN, 1, 135-138. https://www.cairn-int.info/journal–2021-1-page-135.htm.