As if there was any doubt, Joe Biden has announced his re-election bid. And unless something spectacular happens — which it always can in America — Donald Trump will almost certainly be the Right’s nominee. Current polls suggest he will comprehensively lose once again to the once most underestimated name in DC.
Two-term Biden matters not just to the US. Obscured by Covid and the war in Ukraine, the building blocks of a new green world order have been falling into place. Eight years of Democrats in the White House will consolidate industrial policy and a Western green bloc in competition with China. These will be the fundamentals of our age.
The kick-off for the green world order was Xi Jinping’s 2020 announcement that the world’s biggest exporter would be aiming for carbon neutrality by 2060. This formally pledged Beijing’s model of deep state support and subsidies to superpower the green industries of the future. China has spent a decade consolidating its grip on them — from solar panels and batteries to wind turbines and electric vehicles.
Beijing is doing more than just storming ahead. It is outright winning. China’s share in all the manufacturing stages of solar panels exceeds 80 per cent. To fight back, Biden’s 2022 Inflation Reduction Act (IRA) threw open similarly unlimited subsidies for American industry to compete in much the same fields. Net zero is now more than just a climate commitment. It is two competing regimes of industrial policy. But China is far ahead, investing $546 billion against $141 billion from the US.
Biden has not only started the Western fightback on the subsidies race and buried the old Washington consensus about free markets. He has taken the first steps towards building a green bloc around tomorrow’s critical minerals. It is little appreciated but decarbonisation is also a mining and refining process. Electric cars, to take one example, require up to six times more minerals than a combustion engine. The demand for these minerals is set to soar by up to 600 per cent over the next few decades, with ones used for electric vehicles like lithium and cobalt over 4,000 per cent. Ominously still for the US, the International Energy Agency estimates China’s share of refining is around 35 per cent for nickel, 50-70 per cent for lithium and cobalt, and nearly 90 per cent for rare earth elements. China is mastering this green world order.
Domestically, Biden has started building up American refinement capacity. Re-election will ensure green factories, with mining and processing facilities set to spring up everywhere.
Internationally, Biden has started building what he wants to be “critical minerals club” — a buyers’ cartel to secure supplies against China — with the first pact inked with Japan. With a second term this extractive alliance will consolidate an anti-Chinese bloc.
The big question for this green world order is: will there be a European pole? Despite having spent more in 2022 on subsidies than the US — $180 billion — the specific design of Biden’s subsidies, and there are no limits to them, means two-thirds of the European Union’s 50 planned lithium-ion factories are now at risk of cancellation. Horrifying the Commission, the EU’s share of global battery investment plummeted after this blow from Biden from 41 per cent in 2021 to a low of two per cent in 2022. Europe is now trying to fight back with a subsidy blast and critical minerals act of its own.
The big question for Biden’s second term is whether the US will synchronise with the Europeans. Or will Congress ensure that it stays a competitor, eating Macron’s and Scholz’s lunch? European officials are flying round the world signing deals with mineral suppliers like Chile, Namibia and Kazakhstan. One thing is clear: the new green world is going to see human rights take a back seat as Europe builds its own deals and interests like China has.
So where does Britain fit in with this green world order? London is playing catch-up when it comes to all of this.
The truth is that Biden’s re-election, cementing his green bloc, will do as much to define this as whatever is done in Whitehall. In fact, he’s already seeking a mineral deal with the UK. But it will still lack a clear strategy of where the country will sit in the global factory of green supply lines of tomorrow. Biden knows full well that going green is a cut-throat business. Does Britain?
Ben Judah is the author of the forthcoming This Is Europe: How We Live Now published in June
