The Energy Transitions Commission (ETC) has released a new briefing note, Global Trade in the Energy Transition: Principles for Clean Energy Supply Chains and Carbon Pricing, outlining key policy guidance to support a faster and fairer global energy transition.
The cost of key clean energy technologies has fallen dramatically over the last decade, with solar PV module prices down 94% since 2011 and lithium-ion battery prices dropping over 92% since 2010, while doubling in energy density.
The report shows that China has led this progress and now dominates global markets in several clean technologies.
The ETC attributes this to “strategic vision, low capital costs, technological innovation and dynamic entrepreneurship,” rather than just low labour costs.
Supply chain considerations
China’s dominance has prompted other countries to reconsider the resilience of their supply chains. In response, many governments are pursuing nearshoring strategies to improve energy security and boost domestic employment.
The ETC warns that poorly designed policies could increase the cost of the energy transition and has proposed six guiding principles to help policymakers avoid inefficiencies.
“The world is entering a new industrial era powered by clean energy,” said Faustine Delasalle, ETC Vice-Chair. “Well-designed policies, including carbon pricing, supply-side financial incentives, and demand-side regulations, are essential to make projects viable.”
The policies include avoiding total self-reliance, tailoring nearshoring efforts to technologies with domestic potential, and ensuring tariffs comply with WTO rules.
The ETC also emphasises the importance of collaboration with China to accelerate clean energy deployment in low-income countries.
“In an ideal world, free from geopolitical tensions or supply chain risks, China’s stunning technological progress and cost reduction would be welcomed as enabling a faster and cheaper energy transition worldwide,” said Adair Turner, Chair of the ETC.
“But there are economic and security-related reasons for seeking to develop domestic supply chains.”
