Trade Wars and Climate

China’s green revolution is changing the world. But while this revolution may aid the environment and advance sustainability, China’s primary reason for pursuing it is to promote its own geopolitical strategy.

That was the view advanced by Nobuo Tanaka, chairman of Japan’s Sasakawa Peace Foundation and a former executive director of the International Energy Agency, at the Fortune Global Sustainability Forum in Yunnan, China.

China going green is one of four current energy revolutions that have global significance, Tanaka said. The others are the emergence of the United States as the world’s largest oil producer, via shale oil; solar energy’s move toward becoming the cheapest energy source available; and the use of renewables, electric vehicles, and digitization to make electricity production cleaner.

“China is leading in three of these revolutions, while the United States is leading in just one, the conventional one,’’ Tanaka said. “Who will win this great energy game?”

While many analysts focus on the transport networks for trade as the primary goal of China’s Belt and Road initiative, Tanaka believes the true aim is to create a massive transnational power grid.

“The energy issue is also a security issue,’’ he said.

But the green revolution doesn’t mean China is totally abandoning fossil fuels.

The country is heading towards becoming the world’s largest importer of liquified natural gas (LNG), and one purpose of Belt and Road is to diversity China’s sources of gas. Today, the U.S. is the world’s largest LNG exporter, and the two countries are engaged in a trade war.

“When China and the U.S work together, we get a lot of things done, we solve a lot of problems,’’ said Hal Harvey, chief executive officer of Energy Innovation. “We need to stay together.”

As the two largest producers of carbon emissions in the world, the climate crisis can’t be solved unless the U.S. and China cooperate, Harvey said. Fortunately, despite Washington’s intransigence on the issue, much of the energy policy in the U.S. is made by states. California’s green energy initiatives alone mean there is hope the tide can be turned.

Harvey said the way to solve the climate crisis is to create a zero carbon energy grid, zero carbon vehicles, zero carbon buildings, and zero carbon industry.

That may seem like a tall order, but he insists it is within reach with strict and enforced energy standards, policies and regulations. And with prices for renewables and newer technologies falling rapidly, change is coming.

“It will happen when the cost of saving the earth is cheaper than the cost of ruining the earth,” he said.