When green partners don't play ball

A globalised low-carbon economy works only when everyone on the team plays ball. When they don’t, as we’re now seeing with China, green ambitions can start suffering quickly.

China in recent years has taken the number-one spot on sustainability issues in both good and bad ways. Bad: it’s now the world’s largest consumer of energy and the world’s top greenhouse gas emitter. Good: it’s become a leading producer of cheap, energy-efficient light-bulbs and low-cost photovoltaics. And then there’s the bit-of-both category: China is also the world’s largest producer, by far, of rare-earth materials, which are critical for green technologies from electric-car batteries to energy-capturing wind turbines.

That achievement has undoubtedly been good for China.  But for the rest of the world, not so much, as we’re now seeing with China’s apparent, though officially unacknowledged, embargo of rare-earth minerals to Japan, the US and Europe.

Two sparks — one small, one considerably more weighty — apparently set off this brouhaha. The first involved Japan’s detention of the captain (who’s since been released) of a Chinese fishing boat in Japanese waters. China responded, unofficially, by cutting off shipments of rare-earth materials to Japan. The second concerns a complaint by the United Steelworkers union that China is engaged in unfair and illegal trade practices regarding green technologies; the United States Trade Representative last Friday announced it would investigate those concerns.

Shortly after Friday’s announcement, some Chinese rare-earth shipments to the US and Europe also came to a quiet stop.

And so here we stand, with some of the world’s major economies held in limbo on various cleantech fronts, hostage to an embargo that doesn’t officially exist, yet stings all the same. This, then, is the dangerous downside of a cost- and efficiency-maximised global supply chain: the possibility that the cheapest, best and hitherto most-reliable source of critical materials can suddenly decide to take its ball and go home. It’s a questionable strategy for China over the long run, but — in the short term — a disturbing and disruptive game of chicken for the rest of the world.