Post

1/ The purpose of green industrial policy has inverted. It used to pay for a public good: clean energy that cost more, benefiting everyone. Now it captures advantages a country keeps for itself. That shift, from a shared cost to a prize seized, is the story of the transition.

2/ In the beginning it was pure provision. Clean power cost more than coal and gas, and the benefit—a stable climate—belonged to everyone and no one. So policy covered the gap and fought over who paid. Germany's feed-in tariff put the cost on household bills for twenty years.

3/ Then it became a way to build coalitions. The transition kills fossil-fuel jobs, so governments used industrial policy to create new ones and build a constituency. The US IRA did this: its factory incentives put plants, and jobs, into Republican districts.

5/ Eventually, the purpose inverted outright. Four things converged: clean energy got cheap, China got dominant, oil turned volatile again, and Covid exposed how fragile supply chains were. Together they turned clean energy from a public good to fund into an advantage to seize.

6/ The cost collapse drove it. Battery packs cost 93% less than in 2010. Solar is a similar story. In China an EV now costs no more to build than a gas car. Subsidies are vanishing: Germany ended its surcharge in 2022, China its feed-in tariff in 2025.

7/ The advantage comes in two forms. The first is energy security. LNG has to keep arriving through straits a rival can close. A solar panel, once built, runs 25–30 years on sunlight no one can cut off. Cut the fuel and the power stops; cut the panels and the lights stay on.