How East Asia is transitioning into a green economy — China Book Chat

Business & Technology

East Asian countries like China, Korea, and Japan have significant green ambitions, and while their strategies may appear different at first glance, a closer study reveals sophisticated similarities in their race to transition into an eco-friendly economy.

Electric vehicles play a significant role in China’s clean energy transition. Pictured above is an employee working on the production line of NIO electric vehicles at a JAC-NIO manufacturing plant in Hefei, Anhui Province, China. August 28, 2022. China Daily via REUTERS.

While at first glance, the policy approaches of East Asian countries like China, Korea, and Japan may seem quite different, in fact, as a new book shows, they share more similarities than differences in how they approach the transition to clean energy.

I recently had a chance to talk to co-authors of the book Developmental Environmentalism: State Ambition and Creative Destruction in East Asia’s Green Energy Transition, published by Oxford University Press in May 2023, about this important issue.

The authors specifically focus on how a developmental environmentalism mindset manifests itself in the clean energy shift in East Asia, including local discourse on the topic and the approaches adopted in response to market forces. They argue that the strategic involvement of state actors in East Asia’s green energy shift has global implications for the transition away from fossil fuels.

In this thorough and wide-ranging book, Elizabeth Thurbon, Sung-Young Kim, Hao Tan, and John Mathews collaboratively demonstrate how state actors in East Asia are engaging in a sophisticated kind of economic statecraft, strategically harnessing market dynamics to advance their transformative green ambitions through green growth. Elizabeth Thurbon, whose research focuses on the state’s strategic role in techno-industrial development and change, is a Scientia Fellow in International Relations in the School of Social Sciences at UNSW Sydney. Sung-Young Kim is a senior lecturer in politics and international relations at Macquarie University School of Social Sciences. His research is on the international political economy of renewable energy transitions in East Asia. Hao Tan is an associate professor at the Newcastle Business School in the University of Newcastle, Australia. His research is focused on energy transitions and their global implications from management and policy research perspectives. John Mathews, author of Global Green Shift: When Ceres Meets Gaia (Anthem Press, 2017), is a professor emeritus at Macquarie University, Sydney, in the Macquarie Business School.

The authors provide a new way of thinking about the strategic role of the state in the clean energy shift through their “Developmental Environmentalism” framework. They examine both China and South Korea as case studies to shed light on how a developmental environmentalism mindset manifests itself in their respective clean energy shift, including the local discourses and the actual approaches adopted by the government in response to the creative and destructive forces of the market. They also discuss the drivers and dynamics behind East Asia’s green energy shift and touch upon its future trajectory. One point of particular interest is that the authors reject the idea that East Asia’s greening strategies are mere exercises in “greenwashing.” Last but not least, the authors highlight that the book is not just about East Asia’s energy transition, but also has implications for the world that enable countries to move away from fossil fuels toward green energy industries.

Below is an edited excerpt from my discussion with them.

Christopher Marquis: Can you please summarize what is the primary objective of your book?

Sung-Young Kim: The primary purpose of Developmental Environmentalism is to highlight the state’s role in leading national Green Growth initiatives underway in the critical cases of China and South Korea (hereafter, Korea). By Green Growth, we are referring to the idea that greening is first and foremost an economic development opportunity and one that provides a realistic approach to achieving sustainable growth. China and Korea are critical cases because of their energy-intensive and resource-intensive economies – all which stem from their manufacturing-heavy industrial structures. If East Asia is the fossil fuel guzzling factory of the world that it is purported to be, then a truly global clean energy transition can only be achieved if these (and other) highly industrialised countries opt-in. While we recognise the important role of the private sector, international bodies, and market mechanisms in contributing to the rise of Green Growth, we view the state as the key factor in explaining why and how these countries have become technological leaders in many green industries (eg. electric vehicle batteries and automobiles, smart power grids) and have more recently embarked on advancing the use of clean energy while scaling down the use of fossil fuels.

Marquis: Can you explain what your analytical framework (development environmentalism) is and how you developed it? How did the DE mindset come into shape? What factors contribute to its emergence?

Elizabeth Thurbon: In an effort to make sense of both the progress and the seeming contradictions in East Asia’s clean energy transitions, the book attributes causation to the presence of Developmental Environmentalism (DE), which at its core is an extension of the ‘developmental state’ strategies – perfected by the East Asian countries such as Korea (and now, China) in their efforts to catch-up and eventually stay ahead or keep-up with the advanced industrial states in the post-war era. In the spirit of Joseph Schumpeter’s seminal work on ‘creative destruction’, Developmental Environmentalism refers to the state’s promotion of the new green economy (‘creation’) while also pursuing the phasing out of the old brown, fossil-fuelled, economy (‘destruction’).

DE was first presented in an article published in Politics and Society by Kim and Thurbon (2015) who were primarily concerned with how DE explained the initial mobilisation of Green Growth in Korea, which had been prioritised to the top of the national agenda under former President Lee Myung-bak’s (2008-2013) time in office. Fast forward fifteen years: it is not only Korea but also, China, which has wholeheartedly embraced Green Growth (or ‘ecological civilization’ as referred to in that country). Internationally competitive companies with proven strengths in green technologies such as Li-on batteries, virtual power plants, and microgrids have emerged in both China (eg. BYD) and Korea (eg. Samsung SDI). These countries’ green industry creation initiatives have been followed by efforts to jump-start the use of renewables (more so in China than in Korea) while phasing out the use of fossil fuels. Therefore, the core puzzle had changed. The book represents an effort to make sense of the progress and seeming contradictions of East Asia’s clean energy shift to date. We explain this mixed picture through the lens of DE, specifically on three analytical features.

  • First, DE represents the extension of a ‘developmental mindset’ to greening objectives. The focus of state elites on nurturing national capabilities in increasingly higher-technology industries is now being extended to greening objectives. What has eventuated is a new variety of developmentalism in the region, which we call Developmental Environmentalism.
    • Second, DE is a political legitimation strategy in both the domestic arena and in international forums. State elites view DE as a solution to address growing concerns over the environment, sustaining economic growth, tackling economic inequality, and the geo-political risks associated with staying wedded to brown growth. DE is also a tool of soft power in the sense that Korea is keen to further its role as a bridge between developing and developed countries while China seeks to neutralise international criticisms of its authoritarian character through its increasingly impressive environmental commitments.
  • Third, as a result of the above two, DE is a distinctive policy approach centred on sequencing the ‘creative’ and ‘destructive’ aspects of the clean energy transition. Unlike many Western countries, the idea of balancing environmental and economic goals (under the rubric of ‘sustainable development’) is an unthinkable proposition. For these governments, the number one priority is on creating internationally-competitive new green industries and then, and only then, do they entertain the idea of scaling up the use of renewables and phasing out the use of fossil fuels.

Marquis: How can the concept of development environmentalism help us understand the trajectory of Northeast Asia’s green energy development? How do you operationalize the new analytical approach in the context of specific country cases, taking China and Korea as examples? And why choose China and Korea as case studies?

Hao Tan: In our book, we demonstrate that environmental concerns, alongside traditional developmental concerns, have been instrumental in shaping techno-industrial policies and activism in China and Korea since the early 2000s. The shift is neither ‘developmental business as usual’, nor pure environmental initiatives. However, the challenge of seeking to reconcile the (sometimes but not always conflicting) goals of economic growth, political legitimacy, international security and environmental protection have led to an uneven balance between the creation of green energy industries and the dismantling of fossil fuel sectors.

We operationalise this new analytical approach through three distinct and yet interrelated analytical steps. In Step One, we explore the origins and emergence of the state’s ambitions and capabilities, both in terms of fostering green industries and dismantling existing fossil fuel industries. In Step Two, we focus on the evolution of the state’s efforts to promote green industry growth from the mid-2000s to the present. We conduct in-depth case studies to examine how targeted industries in these countries are developed. Finally, in Step Three, we shift our focus to the state’s actions in dismantling fossil fuelled industries – the ‘destructive’ side of the Schumpeterian equation. We aim to identify the factors that lead to a closer alignment between the state’s evolving ‘creative’ and ‘destructive’ ambitions and capabilities in this step.

We chose these two countries for two main reasons. First, both China and Korea have demonstrated a strong commitment and capability in transitioning to green energy. They have developed national strategies and made significant efforts to develop, commercialise, and scale green energy technologies and related industries. By focusing on these countries, we can deepen our understanding of the crucial role that the state plays in Northeast Asia’s green energy shift. Second, Korea and China represent different political regimes: an authoritarian dictatorship and a developed democracy, respectively. By comparing these two countries. we aim to challenge the common belief that authoritarian regimes like China are more effective in addressing environmental issues than democracies. We argue that the differences between these states are less important than their similarities when it comes to explaining their adoption and success in the green energy transition.

Marquis: Why are the Northeast Asian states rapidly greening their economies?

Hao Tan: We have identified four factors that have significantly influenced the rapid transitions in these economies, particularly in recent years.

  1. Political leaders’ ambitions: The heightened ambitions of political leaders in terms of both developmental and environmental goals have played a crucial role. These leaders have spearheaded initiatives that focus on both creative (building new green industries) and destructive (dismantling old fossil fuel industries) aspects in their countries.
    1. Changing geostrategic landscape: The increasing rivalry between China and the US in the global arena has had a profound impact on the focus, pace, and intensity of these states’ strategic actions in the green energy sector. This changing landscape has influenced their approaches and efforts in transitioning to greener energy sources.
    2. Environmental challenges and political legitimacy: The environmental problems associated with the traditional fossil fuel-based development strategies of these states have become a major concern for their political legitimacy. These challenges have forced the regimes to address environmental issues more seriously.
      1. Technological advancements and market dynamics: The rapid technological progress and cost reduction achieved through massive early investments in green energies have transformed the interests of domestic energy consumers and fossil fuel incumbents. As a result, these states have become more inclined to introduce aggressive carbon pricing, renewable energy targets, and ambitious timelines for phasing out fossil fuels.

Marquis: What is the role of the state at both central and provincial government levels in Northeast Asia’s green energy transition?

Hao Tan: While the commitment of central governments and top leaders remains crucial to Northeast Asia’s green energy transition, we have discovered that local government activism has emerged as a significant driving force in the shift towards green energy in both China and Korea. In both countries, certain local governments have taken the lead in establishing new industries related to green energy, such as electric vehicles. These local governments have implemented supportive policies, including direct investments and subsidies, which have not only stimulated market growth but also facilitated the development of various industry clusters focused around green energy technologies.

Moreover, these proactive local governments have taken measures to address pollution problems within their cities or regions. They have actively closed down coal-fired power stations and discouraged the production and use of gasoline vehicles. These actions are intended to combat pollution and promote a cleaner environment, thereby contributing to the destruction of fossil fuel industries.

Marquis: You took a different view on NEA’s green energy shift: not as greenwashing and as pessimistic as some authors argued. Can you explain why?

John Mathews: The critics of East Asia’s DE-driven Green Growth approach argue that a focus on growth is not compatible with greening, or that “green growth” is a contradictory expression. Our research on the green energy transition in NE Asia, by contrast, reveals that greening and growth are actually compatible – provided that growth is interpreted as growth in output for the same level of inputs, i.e. as intensive growth, rather than growth in output resulting from increases in input, which is extensive growth. We argue that the critics of DE and of green growth are actually targeting extensive growth and are ignoring the possibilities of intensive growth which is targeted by China and Korea and to some extent other NEAsian countries as well.

Marquis: To what extent does this NEA approach of developmental environmentalism provide a model for other countries? What are the obstacles to the wider embrace of a developmental-environmental approach in the developing world? What are some lessons learned from NEA for developed countries? What does this mean for the future of the global green shift?

John Mathews: The key lesson is that East Asia’s approach to Green Growth provides a ‘blueprint’ for how developing and developed countries can approach the challenge of greening while being able to accommodate national development aspirations. Our argument is that growth (interpreted as intensive growth) is compatible with greening. This means that countries that have seen their developmental prospects pinned to their access to fossil fuels can develop an alternative green energy strategy that promises to deliver not just cleaner environmental results but enhanced energy security based on the fact that green, renewable energies are products of manufacturing and their application can contribute to the development of industry. The DE strategy enables countries to move away from fossil fuels with their punishing effects in exacerbating environmental pollution (dirty skies) and reducing energy security, while contributing to building new energy industries that become part of the country’s developmental effort. This is a strategy that can be pursued by a wide range of newly industrialising countries – as we demonstrate in the final chapters of our book.