The Political Logic of Reshoring in Low Carbon Technologies: Economic Interdependence and Green Industrial Policy

44 Pages Posted: 31 Mar 2022

See all articles by Andreas Goldthau

Andreas Goldthau

University of Erfurt - Willy Brandt School of Public Policy

Llewelyn Hughes

Australian National University (ANU) - Crawford School of Public Policy

Jonas Nahm

Johns Hopkins School of Advanced International Studies

Date Written: March 1, 2022

Abstract

China’s ability to use process innovation in manufacturing made the country a key player in the clean tech sector. Specifically, China’s dominance in solar and battery manufacturing has triggered political discussions in Western capitals about re-offshoring from China to alternative locations, and possible reshoring to geographies closer to home. The paper catalogues and assesses policies put in place in China, Europe, Japan, and the United States to incentivize reshoring and re-offshoring. It then explores whether and to what extent these measures are likely to impact the geography of select low carbon technologies. The report finds that most policy measures in place aim at diversifying supply chains and improving domestic competitiveness rather than outright reshoring. Nonetheless, some policies explicitly aim at reshoring, including EU and US tariffs on Chinese solar PV modules. We argue that the effects of potential reshoring measures are a function of technology complexity and their geographical concentration. In light of this, the paper discusses the possible implications of reshoring measures for climate change and economic development. It draws conclusions for policy based on a public interest approach, focusing on national competitiveness and industrial policy; climate change; and upgrading as part of the development imperative.

Keywords: China, reshoring, supply chains, energy transition, upgrading

Suggested Citation

Goldthau, Andreas and Hughes, Llewelyn and Nahm, Jonas, The Political Logic of Reshoring in Low Carbon Technologies: Economic Interdependence and Green Industrial Policy (March 1, 2022). Available at SSRN: https://ssrn.com/abstract=4066047 or http://dx.doi.org/10.2139/ssrn.4066047

Andreas Goldthau

University of Erfurt - Willy Brandt School of Public Policy ( email )

Nordhäuser Str. 63
Erfurt, 99089
Germany

Llewelyn Hughes (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Jonas Nahm

Johns Hopkins School of Advanced International Studies ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

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