De-risking while decarbonising: a green tech partnership to reduce reliance on China
Alicia Garcia Herrero
Heather Grabbe
Axel Källenius
In this policy brief, the authors discuss how the European Union can manage the trade-off between reducing their reliance on China and decarbonise by replacing fossil fuels with renewable energies. They argue that what the reshoring of production, which is currently part of the EU and US strategy to reach these dual goals, is economically inefficient given the US and EU’s limited access to critical raw materials and high production costs.
Moreover, Chinese firms are far ahead of the rest of the world in green tech manufacturing and innovation, and in extraction and processing. Instead, the strategy should be for incentive-aligned governments and businesses to form a green tech partnership. This would produce green tech with the aim of decarbonising faster, while ensuring greater diversification of resources and improving security of supply. The partnership could be organised through a combination of trade and investment agreements, together with tech transfer and financial agreements, under some form of inter-governmental oversight.
About authors
Alicia Garcia Herrero
Chief Economist for Asia Pacific at Natixis, Senior Fellow at Bruegel, Non-resident Senior Follow at the East Asian Institute, Adjunct Professor at the Hong Kong University of Science and Technology
Economist specialized in monetary and financial issues in emerging markets, banking crises and resolution strategies, financial development
Heather Grabbe
Non-resident fellow at Bruegel
Axel Källenius
completed a research internship at Bruegel