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.

4/ The logic showed when Republicans moved to cut the law in 2025. They kept the manufacturing credits—the ones building factories in their districts—and gutted the deployment subsidies, which had no such constituency. The factories had defenders. The subsidies didn't.

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.

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.

8/ You don't have to make the panels to get that security; you can import them, and the cheapest are Chinese. Making them is a separate, costlier bet—owning the industry, worth it where you can win. In solar you perhaps can't: China holds 80% of every stage. Buy and deploy.

9/ China ran this playbook first. It treated decarbonization as industrial strategy and took the century's fastest-growing manufacturing sectors. Everyone else competes for what's left.