The unlikeliest of partnerships is driving a surge in global climate progress, and it's not what you might expect. China's meteoric rise as a leader in green technology and the oil price shock triggered by Donald Trump's presidency are unwittingly helping to accelerate the world's transition away from fossil fuels.
At the heart of this phenomenon is China's rapidly expanding renewable energy sector, which is expected to reach 1,200 gigawatts by 2025 – a staggering increase from just 600 gigawatts in 2020. In contrast, the European Union's renewable energy capacity is set to lag behind at around 600 gigawatts by 2025. Moreover, China's green bond market has grown to an unprecedented £100 billion, eclipsing even the largest markets worldwide, while the EU's own green bond market remains in its infancy.
The oil price shock, meanwhile, is having a profound impact on global energy markets. Brent crude oil, the global benchmark, has plummeted to around £40 per barrel – down from over £80 per barrel in 2014. This sharp decline is making renewable energy sources, such as wind and solar power, increasingly attractive to investors and consumers alike.
While these developments may be accidental, their implications for global climate progress are undeniable. The International Energy Agency (IEA) estimates that if China's green energy ambitions come to fruition, they could reduce the world's carbon emissions by up to 10% by 2025. Conversely, the oil price shock is accelerating the transition to renewable energy sources, making them more competitive with fossil fuels.