Securing Our Future: The Indivisible Link Between Climate and Energy Stability by Gernot Wagner

China Leads Green Tech Race, But Europe & US Show Signs of Catching Up

Brussels/Washington/Beijing – China is rapidly establishing dominance in crucial green technologies, including hydrogen production and solar manufacturing, fueled by aspiring industrial policy, according to a new analysis. While Beijing currently holds a commanding lead, both the European Union and the United States are demonstrating renewed efforts to compete and secure their own positions in the burgeoning clean energy sector.

the rise of Chinese companies like LONGi, a top solar manufacturer now venturing into green hydrogen via its “Long Hydrogen” subsidiary, highlights the nation’s strategic push. China now boasts the world’s largest electrolyzer manufacturing capacity and has five other hydrogen companies ranked among the global top ten.

Though, the EU possesses a key advantage: a robust carbon price, currently around $100 per metric ton, which already makes many low-carbon technologies economically viable. Experts at McKinsey & Company estimate that 90% of climate technologies could be profitable by 2030 at this carbon price, requiring only further support for emerging technologies like green hydrogen to scale effectively.

european companies are already making strides. Swedish startup Step is pioneering a low-carbon steel plant utilizing electrolyzers from German firm ThyssenKrupp nucera.The US,despite recent shifts in energy policy,is also showing progress. Solar panel manufacturing capacity has surged fivefold sence 2022, exceeding 50 gigawatts – now matching domestic demand. While the drive to onshore solar production is driven by factors beyond climate concerns, such as national security and domestic job creation, it underscores a commitment to bolstering domestic energy technology.

Analysts suggest that even if “climate tech” needs to be rebranded as “energy tech” for political reasons, the underlying momentum towards decarbonization remains strong. The global race for green technology leadership is intensifying, with China currently in the lead, but Europe and the US demonstrating the potential to regain ground.

How does Gernot Wagner challenge the traditional prioritization of affordability and reliability in energy policy?

The Core Argument: Why Energy Security Is Climate Security

Gernot Wagner’s work powerfully demonstrates that framing climate action as separate from energy security is a dangerous fallacy. The two are inextricably linked. Historically, energy policy has frequently enough prioritized affordability and reliability, sometimes at the expense of environmental considerations. however,a volatile climate directly threatens energy systems,and conversely,our energy choices dramatically impact the climate. This isn’t a future problem; it’s happening now.

Consider the increasing frequency of extreme weather events – hurricanes disrupting oil and gas infrastructure, droughts impacting hydropower generation, and heatwaves straining electricity grids. These events aren’t anomalies; they’re signals of a destabilizing climate, and they all impact energy supply chains. Wagner argues that a robust, resilient energy future requires aggressive climate action. Ignoring climate change isn’t just an environmental issue; it’s a critical risk to national and global security.

Climate Risks to Energy Infrastructure: A Growing Threat

the vulnerabilities are multifaceted. Here’s a breakdown of key areas:

Fossil Fuel Infrastructure: Coastal refineries and offshore oil rigs are increasingly exposed to rising sea levels and intensified storms. Inland infrastructure faces disruptions from flooding and extreme temperatures.

Renewable Energy Systems: While generally more resilient, renewable sources aren’t immune. Solar panel efficiency decreases in extreme heat. wind patterns are shifting, impacting wind turbine output. Hydropower relies on predictable rainfall, which is becoming increasingly erratic.

Electricity Grids: Heatwaves overload transmission lines,leading to blackouts. Extreme weather damages substations and power plants. Increased demand for cooling during heatwaves further strains the grid.

Nuclear Power Plants: Many nuclear facilities are located near bodies of water, making them vulnerable to flooding and sea-level rise. Cooling systems rely on water availability, which is threatened by drought.

The World Meteorological Organization (WMO) recently projected (August 2025) that global temperatures are expected to continue at or near record levels in the next five years [https://wmo.int/publication-series/wmo-global-annual-decadal-climate-update-2025-2029], exacerbating these risks. This isn’t a distant forecast; it’s the current trajectory.

The Energy Transition as a Stabilizing Force

Wagner advocates for a rapid and comprehensive energy transition – shifting away from fossil fuels and towards renewable energy sources. This isn’t simply about reducing greenhouse gas emissions; it’s about building a more secure and resilient energy system.

Here’s how:

1. Diversification of Energy Sources: Reducing reliance on any single fuel source minimizes vulnerability to supply disruptions. A diversified portfolio including solar, wind, geothermal, and hydropower enhances energy security.
2. Decentralization of Energy Production: Distributed generation – such as rooftop solar and microgrids – increases resilience by reducing dependence on centralized power plants and long-distance transmission lines.
3. Investment in Grid Modernization: Upgrading the electricity grid with smart technologies improves efficiency, reliability, and the ability to integrate renewable energy sources. This includes enhanced energy storage solutions.
4. Energy Efficiency measures: Reducing energy demand through efficiency improvements lowers overall energy consumption and reduces strain on the energy system.

Case study: Hurricane Maria and Puerto Rico’s Energy Crisis (2017)

The devastation caused by Hurricane Maria in Puerto Rico in 2017 serves as a stark warning. The island’s aging and centralized energy infrastructure was fully crippled, leaving millions without power for months. This highlighted the vulnerability of relying on a single, centralized system and the critical need for resilience. The slow recovery underscored the economic and social costs of energy insecurity. the event spurred investment in microgrids and distributed renewable energy solutions, demonstrating a path towards greater energy independence and resilience.

The Role of carbon Pricing and Policy

Wagner is a strong proponent of carbon pricing – putting a price on carbon emissions to incentivize emission reductions. He argues that a well-designed carbon pricing mechanism can drive innovation in clean energy technologies and accelerate the energy transition.

Key policy considerations include:

Carbon Tax: A direct tax on carbon emissions.

Cap-and-trade System: A system that sets a limit on total emissions and allows companies to trade emission allowances.

Renewable Energy Standards: Requirements for utilities to generate a certain percentage of their electricity from renewable sources.

Energy Efficiency Standards: Standards for appliances, buildings, and vehicles to improve energy efficiency.

Investment in Research and Development: Funding for research and development of new clean energy technologies.

Benefits of a Climate-Aligned Energy Future

The benefits extend far beyond climate mitigation and energy security:

Economic Growth: The clean energy sector is a rapidly growing industry,creating new jobs and economic opportunities.

Improved Public Health: Reducing air pollution from fossil fuels improves public health and reduces healthcare costs.

Reduced Geopolitical Risks: Decreasing reliance on fossil fuel imports reduces geopolitical vulnerabilities.

* Enhanced Resilience: A more resilient energy system is better able to withstand the