Why Decarbonization Requires Globalization: An Interview with Michael Davidson

Analysis / Microfeatures

Ilaria Mazzocco

February 22, 2024

In this interview for Big Data China, Ilaria Mazzocco speaks with Michael Davidson (UC-San Diego) about the political economy of China’s climate policies and the impact of U.S. policy responses on achieving America’s own climate goals.

Davidson, an assistant professor at the School of Global Policy and Strategy and the Mechanical and Aerospace Engineering Department of the Jacobs School of Engineering, conducts highly impactful and innovative research in an effort to find institutional and engineering solutions for deploying renewable energy at scale, such as the Power Transformation Lab at UC-San Diego. He leads work on renewable energy planning, developing new models for low-carbon power markets, and utilizes a combination of data-driven and qualitative research methods on the political economy of industrial policy for low-carbon technologies. This work includes careful analysis of the institutional barriers to the clean-energy transition in China and the role of globalized value chains for reaching decarbonization goals in the United States.

Some of the key takeaways from our interview include:

Davidson and Mazzocco discuss the methodologies he uses to study China’s energy system. In response to the challenges facing this kind of work given current political dynamics around data restrictions, he and his team have pursued new types of sources. Davidson explains that modeling is currently concentrated in the hands of the grid companies in China, meaning his initiative provides alternative models and data for non-incumbents to think of new approaches to transforming China’s power system.

"It’s also helping to take some of the scenario creation out of the hands of the incumbents and allowing some of these new actors to come in within the Chinese ecosystem and elsewhere to come up with their own scenarios and…alternative futures of how China can achieve low carbon goals."

"We could start making some more interesting analyses on what are the trade-offs between distributed energy and large grids. Where grid companies like to have large grids, and maybe they’re not super excited about having a lot of small solar rooftops."

Davidson explains the dynamics at play in China’s power sector, the institutional origins of the energy shortages that plagued the country in 2022, and how those shortages and energy security concerns are slowing China’s transition away from coal.

“In the last few years, we started to see over 100 gigawatts of new coal permitting and or construction taking place with a nominal goal of meeting energy reliability.”

“Building more coal plants wouldn’t have solved the 2021 crisis because that was about a coal supply and a market problem, not an insufficient coal capacity problem. And you also have some sort of structural problems with targets and incentives around coal plants that are driving this new coal boom.”

Davidson describes his recent work on the importance of global value chains for low-carbon technologies, with a focus on his papers that quantify the cost of decoupling for several technologies and the benefits of trade in the solar panel industry.

“If you look at developing Asia, the price point between solar and coal is really important for their energy transitions. We need to make sure that solar and other renewable technologies and EVs continue to fall in cost dramatically so that they can adopt them and avoid these very high fossil-intensive development pathways.”

“I think the sort of fundamental premise is we need to maintain free globalized flows of capital, talent and technology in order to continue to have these increased learning benefits.”

Mazzocco and Davidson also discuss possible lessons from China’s green industrial policy, the United States’ current approach to trade, and the danger that pursuing decoupling policies and restricting Chinese investment poses to reaching decarbonization goals.

“The key questions for me going forward are, what are the relevant aspects of this globalized supply chain and global learning that we need to maintain to continue to reduce costs going forward?”

“Subsidies, of course, helped, but you can’t subsidize your way entirely to where it costs of solar panels are today. And the fact that now these solar firms are competing overseas in Southeast Asia and even opening up plants and making projects here in North America really shows that they have some very key technological and tacit knowledge advantages that really are crucial for these technologies going forward.”

“When you throw a lot of incentives and money at the manufacturing side, foreign firms want to come in. Now it’s a question, do we open the doors to them, or do we just say, no, only U.S. firms or only certain subset of firms can come in and build manufacturing facilities here and take advantage of those credits. And I think that’s a really important debate that we need to have and interrogate.”

Interview Transcript

CSIS-Big-Data-China-Interview-with-Michael-Davidson-TRANSCRIPT DOWNLOAD

Featured Scholars

Michael Davidson

Michael Davidson is an assistant professor at the School of Global Policy and Strategy and the Mechanical and Aerospace Engineering Department of the Jacobs School of Engineering. He was a Public Intellectuals Program Fellow at the National Committee of U.S.-China Relations from 2021 until 2023. Prior to joining UC-San Diego, he was a postdoctoral research fellow at the Harvard Kennedy School Belfer Center’s Environment and Natural Resources Program. He received his Ph.D. in engineering systems at the MIT Institute for Data, Systems, and Society, where he was a researcher with the MIT Joint Program on the Science and Policy of Global Change and a member of the Tsinghua-MIT China Energy and Climate Project. He is also a fellow with the Initiative for Sustainable Energy Policy, hosted at Johns Hopkins-SAIS.

Resources

Michael Davidson, “China’s Power Outage,” Foreign Affairs (November 18, 2021).

Michael Davidson, “Why China Can’t Break Its Coal Addiction,” Foreign Affairs (November 2, 2023).

Michael R. Davidson, Valerie J. Karplus, Joanna I. Lewis, Jonas Nahm, and Alex Wang, “Risks of decoupling from China on low-carbon technologies,” Science, Vol. 377, No. 6612, pp. 1266-1269 (September 15, 2022).

Electricity Market Tracker, Power Transformation Lab, UC San Diego.

John Paul Helveston, Gang He, and Michael Davidson, “Quantifying the costs of savings of global solar photovoltaic supply chains,” Nature (October 26, 2022).

Scott Kennedy and Ilaria Mazzocco, “The China Shock: Reevaluating the Debate,” Big Data China, Center for Strategic and International Studies (October 14, 2022).

Authors

Ilaria Mazzocco

Ilaria Mazzocco is a senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies (CSIS). Prior to joining CSIS, she led research on Chinese climate and energy policy for Macropolo, the Paulson Institute’s think tank. She holds a PhD from the Johns Hopkins School of Advanced International Studies (SAIS), where her dissertation investigated Chinese industrial policy by focusing on electric vehicle promotion efforts and the role of local governments. She also holds master’s degrees from Johns Hopkins SAIS and Central European University, as well as a bachelor’s degree from Bard College.

This feature was made possible through the generous support of the Stanford Center on China’s Economy and Institutions (SCCEI). Special thanks goes to Matt Barocas for his support in writing and editing this feature.

Cite this Page

Ilaria Mazzocco, "Why Decarbonization Requires Globalization: An Interview with Michael Davidson," Big Data China, Center for Strategic and International Studies, February 22, 2024, last modified February 22, 2024, https://bigdatachina.csis.org/why-decarbonization-requires-globalization-an-interview-with-michael-davidson/.