The Green Gamble: The Geopolitics of Net Zero
“The dependence of democratic industrial nations on China’s monopoly in the rare earths industry cannot be overstated... It will likely endure for another decade, necessitating strategic and coordinated responses to build viable alternatives.”
In this paper, Doug Stokes maps out the key supply chains which underpin the technologies used to build new renewable energy infrastructure, demonstrating the West’s dependence on China and the geopolitical risks this incurs.
Summary of Research Paper
Energy accessibility and economic abundance are closely linked. Without access to affordable energy, alleviating poverty, producing food, and creating opportunities for meaningful work become difficult. As industrialised nations transition to cleaner technologies, they must not lose sight of this fundamental relationship running through the energy supply chain.
Across the industrialised world, a historically unparalleled shift is occurring as countries transition from fossil fuels to clean “net zero” carbon energy. New, green technologies are at the heart of the industrial transformations driving the net zero agenda, which relies on a complex global supply chain composed of various resources, minerals, and materials used to produce, store, and use renewable energy.
But where do these resources come from? How reliant are developed countries on energy exports to fuel the net zero transition? What happens if the global supply chains are disrupted?
China is the dominant producer of over 50% of the materials used in solar panels, electric vehicles, and wind turbines. For certain materials, their control of the value chain exceeds 90%. China has come to dominate the process for many key materials all the way from extraction, production, to export, for developing and developed nations alike.
For example, in the Democratic Republic of Congo—known for its cobalt and copper mining—China retains control of production because it owns most of the country’s mines. The minerals extracted are then processed within and exported from China, creating dependencies in the developed world. This includes rare earth elements, for which the United States does not have any domestic processing facilities; China produces most of the global supply, yet it restricts exports through quotas, licenses, and taxes.
As the West moves towards net zero, its demand for critical minerals is increasing at a pace that far outstrips current domestic supply capabilities. This imbalance makes the system vulnerable to geopolitical risks, export restrictions, and potential price volatility. Western countries are inadvertently driving their energy systems into ever-increasing dependency on China in the pursuit of net zero targets.
Policymakers must consider how to achieve energy security and find solutions to China’s dominance, through new alliances and supply chain diversification. The West cannot turn the lights off on its legacy infrastructure until it is confident it can keep the lights of renewable energy switched on.
