A potential trade war between China and the West concerning green goods raises concerns about its impact on combating climate change. While such a conflict could lead to inefficiencies, wasted resources, slower economic growth, and geopolitical tensions, it may inadvertently contribute to slowing down global warming.
As Beijing inundates global markets with affordable green products, rich democracies and emerging markets may respond by imposing trade barriers, potentially delaying their energy transition by increasing costs for clean technology. However, the surplus of electric vehicles, solar panels, batteries, and similar items could catalyze progress in other regions.
In an ideal scenario, implementing a global carbon pricing mechanism would provide a more effective solution to incentivize the adoption of green technologies without the need for costly subsidies. Building trust between China and the West could foster cooperation and allow green goods production to naturally gravitate towards regions with comparative advantages, potentially avoiding the need for tariffs on Chinese imports.