October 1, 2024 was a red letter day in the climate transition: the UK closed its last coal-fired power station, with renewable energy supplanting coal in its power mix.
While the UK going cold turkey on coal is not unique — it’s the 14th OECD country to achieve it — this milestone carries enormous symbolism.
That’s because the UK is the cradle of the carbon crisis. It was here that James Watt’s 18th century invention of the coal-fired steam engine set off the most transformative wave of innovation in human history.
That steam engine ushered in a British-born Steel Age that mechanised the world. Steel built the machines, the trains (and the rails they ran on), the factories, automobiles, and shipping lines that today span every continent and ocean on earth.
And it was coal and steel that turned the City of London into the world’s pre-eminent financial centre.
Then came coal-fired electrification, and a 34-year-old American, Thomas Edison, opened the world’s first electric power station in London in 1882, financed by a young JP Morgan.
And so, along with the internal combustion engine, the 20th century would belong to America, and bring unimaginable prosperity just as it led us to the precipice of climate catastrophe.
But today carbon’s dominance is in peril. A new green industrial age is overtaking us at a pace and scale that few comprehend, and it’s not driven by the West.
China now stands where Britain once stood, firmly ahead of the rest of the world. On wind and solar, battery technology, EV manufacturing, and critical mineral refining, China dominates every step of the production process virtually to the point of monopoly control.
China now has about 50 per cent of all installed wind and solar capacity in the world, and that’s only growing. By 2028, according to the IEA it will have six times the total US renewable capacity.
By manufacturing on a scale that has driven down the cost of renewable energy worldwide, China has made wind and solar the cheapest new energy available. It controls 80-90 per cent of global solar panel production, over 70 per cent of global battery production, and supplies 60 per cent of the world’s EVs. Through its control of the world’s mineral extraction and refining, China dominates the entire supply chain of critical minerals for solar and EV battery production.
Perhaps most surprisingly, China grew a colossal green financial infrastructure, which has no comparison in the West.
According to Dr. Ma Jun, former chief economist for the People’s Bank of China, China has assembled as much as $4.5 trillion (USD) in the world’s largest green lending market. Those funds capitalise China’s green energy across the economy through a combination of loans, bonds, incentives and other instruments.
For example, in 2023 alone, China spent almost $700B on the energy transition — almost 40 per cent of the total global spend, and more than the US and EU combined.
Yet to a remarkable degree, by controlling resource extraction and global supply lines, exploiting oppressive labour practices both domestically and abroad, and establishing financial command of the sector, China is replicating many of the same practices that built the British Empire and the American Century.
And by artificially driving down green energy pricing through subsidies and anti-competitive dumping, China has wiped out nascent competitors in the West and destabilized the US and EU auto sectors.
That cost pressure is paying huge economic and climate dividends. As the world de-couples from China, green energy now accounts for 40 per cent of China’s GDP growth. Coal power permits declined 83 per cent in China in the first half of this year. Across the OECD, coal power generation is down more than 50 per cent from its peak in 2007. Almost all of that drop is attributed to gains in solar and wind generation.
While a major question mark hangs over the sustainability of China’s low pricing of renewable energy, technological innovation will undoubtedly exert relentless downward pressure.
For now, for today, fossil fuels still drive the world’s economy. But the fall of coal in the very birthplace of the Industrial Revolution is like a bell tolling in the distance.
It’s the sound of hope.
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