Essay by Eric Worrall

In the parallel universe of Nick Robbins and the Grantham Institute, business opportunities require massive state subsidies.

US tariffs propel global clean energy shift

By Nick Robins and Bob Ward | China Daily | Updated: 2025-08-09 08:52

SHI YU/CHINA DAILY 

China and the rest of the world have been presented with an enormous economic opportunity by the United States’ so-called One Big Beautiful Bill Act. US tariffs have already increased the costs of many imported low-carbon goods in the US. Now, the new act, signed into law on US Independence Day on July 4, will further harm the market for many clean energy goods by removing tax credits, most likely leading to greater dependence on fossil fuels and increased damage to the climate.

This will create more challenges for clean energy producers and consumers in the US, likely affecting exporters, particularly those that export their products.

But more interestingly, the new act is likely to put China further ahead of the US in the global race to capitalize on the rapidly growing market for clean energy technologies. Strategically, the task ahead is to identify how this shift can be used to triple the production of renewable energy the world needs by 2030, one of the key climate goals we need to achieve this decade.

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Besides, more than 17 million EVs were sold worldwide last year, meaning more than one in every five new vehicles sold worldwide was an EV. China accounts for more than 70 percent of the global EV production, primarily meeting the demand at home. Also, the global market for EVs increased by 20 percent last year, with China exporting almost 1.25 million EVs, or about 40 percent of the global total, in 2024.

The production of solar panels in China reached a record high in March 2025. Measured by value, 44 percent of Chinese-made solar panel exports were destined for emerging market economies and developing countries in 2023. Many emerging market economies and developing countries imported record levels of Chinese solar power technology in 2024.

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Nick Robins is chair of the Just Transition Finance Lab at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science; and Bob Ward is policy and communications director of the same institute. The views don’t necessarily reflect those of China Daily.

Read more: https://www.chinadaily.com.cn/a/202508/09/WS68969bd7a310724b60020be9.html

As someone who runs a small business, I can confidently report that it is possible to create a business without receiving money from the government. I know this might seem an alien concept to LSE professors like Nick Robins, the author of the article above, but sometimes it is possible to identify business opportunities which don’t require vast injections of taxpayer capital to cover the loss of manufacturing goods nobody actually wants.

In the article Nick makes a big deal of Chinese EV sales. But there is substantial evidence those EV sales are fake, in the sense that the real source of income is a Chinese government funded Ponzi scheme – fiddling the books to cash in on government subsidies, to create the illusion of solvency, rather than genuine growing profits from sales.

Exclusive: China EV brands Zeekr, Neta inflated car sales using insurance scheme

By Reuters
July 22, 20258:06 AM GMT+10Updated July 22, 2025

• Neta inflated sales of over 60,000 cars between Jan 2023-March 2024-documents
• Scheme enabled companies to book sales early to meet aggressive targets
• China’s auto industry has been roiled by cutthroat competition, prompting regulatory concern

July 20 (Reuters) – Chinese electric vehicle brands Neta and Zeekr inflated sales in recent years to hit aggressive targets, with Neta doing so for more than 60,000 cars, according to documents reviewed by Reuters and interviews with dealers and buyers.

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Neta booked early sales of at least 64,719 cars through this method from January 2023 to March 2024, according to copies of records it sent to dealers, seen by Reuters. That was more than half the sales of 117,000 vehicles it reported over the 15 months. Neta’s effort to book sales early has not been previously reported.

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Vehicles booked as sold before reaching a buyer are called “zero-mileage used cars” in the Chinese auto industry. The practice has emerged out of cutthroat competition for sales in the world’s largest auto market, which is reeling from a brutal, years-long price war caused by chronic overcapacity.

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Read more: https://www.reuters.com/business/autos-transportation/china-ev-brands-zeekr-neta-inflated-car-sales-using-insurance-scheme-2025-07-20/

Why would Chinese EV manufacturers want to allegedly book sales before the vehicles are actually sold? Besides pumping their company share price with fake sales growth reports, if the vehicle is registered as sold and ticks a few other boxes, there is a good chance those Chinese manufacturers will be eligible to receive a cash payment of $2,728 from the Chinese Government.

Beijing renews EV subsidy to spur sales, keeps size of incentive unchanged from 2024

NDRC says buyers of electric cars for replacement purposes would receive US$2,728 this year

China renewed a trade-in subsidy that spurred electric vehicle (EV) sales last year, keeping the size of the incentive unchanged to support carmakers from Tesla to BYD.

On Wednesday, the National Development and Reform Commission (NDRC) said buyers of electric cars for replacement purposes would receive a 20,000 yuan (US$2,728) cash award this year. Consumers who buy petrol cars fitted with an engine smaller than 2 litres to replace their vehicles would be given 15,000 yuan.

“A renewal of the subsidy has been anticipated by dealers and car buyers,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a consultancy. “The official announcement came earlier than expected and it would help boost sales in January when [EV] buying interest appears to be low.”

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Read more: https://www.scmp.com/business/china-business/article/3293949/beijing-renews-ev-subsidy-spur-sales-keeps-size-incentive-unchanged-2024

A business model where the company intentionally makes a loss but fiddles the books to qualify for enough subsidies to appear solvent might seem insane, but there is method in this madness. In China well connected executives can win, even when they run their companies into the ground – especially if they are also burning the life savings of ordinary people who were lured in by the fake growth reports.

If I am right, the Chinese renewable industry is a replay of the Chinese housing industry disaster. It was well meaning Chinese government attempts to gently ease the housing bubble which led to the collapse of the Chinese construction industry. To his credit dictator Xi Jinping realised there was a problem, and tried to do the right thing, but Chinese construction companies were so insanely stretched, even a slight wobble in demand was enough to cause financial collapse.

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Shadow banking and the related risks to financial stability proved to be a painful headache for Chinese regulators. Xi Jinping first attempted to regulate the property market’s excessive leverage in mid-2017. This proved counterproductive as it once again pushed real estate developers to find alternative sources of funding, leading them to the offshore bond market in Hong Kong and to using pre-sales from Chinese households. Chinese households’ savings and wealth became increasingly intertwined with a bloated real estate sector which was four times as big – in terms of developers’ assets – as anywhere else in the world. 

The fragilities of China’s real estate sector were buried over the years thanks to ample liquidity in the financial sector and high economic growth. These suddenly became visible when Chinese regulators began to react to the ever-increasing housing prices and the related deterioration of housing affordability and income distribution. 

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Read more: https://www.bruegel.org/newsletter/boom-bust-and-future-chinas-real-estate-sector

The Chinese government panicked when the their gentle adjustment caused the building industry to implode, and tried to restore order with billions of dollars of stimulus packages, but it wasn’t enough – once the balloon popped, there was no putting it back together.

I believe the Chinese EV and renewable energy manufacturers might be betting on the same scenario playing out for their industry. If they can employ enough people, capture enough life savings from ordinary people, it doesn’t matter if their companies are so in debt they have no genuine capital value, so long as they can fiddle the books and conceal the magnitude of their problems. When it all falls apart the problems will be so great, the state will step in and subsidise them.

Author Nick Robins is pushing a Chinese style model of state investment in renewables as a recipe for success. But if I am right, such schemes are not victimless crimes. The ultimate victims of what I believe is a corrupt state sanctioned renewable Ponzi scheme are ordinary people who pour decades of savings into the hands of these high wire artists, only for the state to take even more of their money in a frantic effort to prop everything up when the proverbial hits the fan.

Charles Rotter

The Environmental Protection Agency’s decision to stop updating its “Supply Chain Greenhouse Gas Emission Factors” database marks a turning point away from the ritualized burden of corporate “climate confessions” toward a more streamlined, reality-based approach to governance. Under the Trump administration, this shift reflects an overdue rebalancing of priorities—away from the endless accounting of speculative environmental sins and toward focusing on the agency’s core mission of protecting health and the environment with proven, relevant science.

Naturally, The New York Times treated the decision as if it were the collapse of civilization itself. The tone of their coverage was pure caterwauling—lamenting a “major setback for corporate climate action” and wringing hands over the supposed loss of “one of the most important data sets available” for estimating value chain emissions. Readers could almost hear the background violins as the paper mourned the plight of corporations now deprived of an EPA-maintained moral scorecard for their supply chains.

The USEEIO model, developed by Wesley Ingwersen, was essentially a carbon confessional booth for corporations. Companies could input their expenditures on wood, metal, shipping, or other supply chain components and receive an estimate—laden with assumptions—of their greenhouse gas “footprint.” This exercise was not voluntary for many; European Union regulations and California’s forthcoming 2027 reporting mandate ensured that businesses had to play along or face penalties. In practice, this meant businesses were pressured to adopt costly changes in operations, not because of concrete, measurable harm, but because a statistical model said so.

The model’s popularity was undeniable—it ranked as the third most-viewed dataset on Data.gov. But popularity is not proof of accuracy or necessity. Like a bestselling fad diet, the USEEIO system appealed because it promised a tidy way to quantify virtue—or the lack of it. The problem is that climate accounting of this kind is riddled with uncertainties. It assumes, for example, that entire supply chains exist wholly within the United States, ignoring the reality that many goods are imported from countries with vastly different production profiles. This means the output is, at best, an approximation, and at worst, a misleading guide for costly policy and business decisions.

Seen in the larger context, the system also fed directly into a global investment machinery that has grown around the “climate crisis” narrative. Partnerships like the one formed in 2007 between Al Gore’s Generation Investment Management and Silicon Valley venture capital giant Kleiner Perkins Caufield & Byers were designed explicitly to channel capital into businesses positioned to profit from regulations, subsidies, and market shifts created by climate policy. Their joint focus included renewable energy, building efficiency, “cleaner” fossil energy, sustainable agriculture, and carbon markets—all sectors that benefit from the kind of compliance burdens the USEEIO database helped enforce.

The Times framed the departure of Dr. Ingwersen—suspended after signing a politically charged letter accusing the administration of undermining the EPA’s mission—as the martyrdom of a noble scientist. But the EPA made clear it will not tolerate career bureaucrats using their positions to “undermine, sabotage, and undercut the will of the American public” as expressed at the ballot box. Science should inform policy, not serve as a shield for political activism conducted on taxpayer time.

Critics like former EPA official Paul Anastas warn that shifting research to the private sector could reduce credibility. Yet in this case, a private consortium—including Stanford University and environmental analytics firms—has already pledged to maintain and even improve the dataset, keeping it free to the public. That arrangement underscores the point: when a project has genuine value, private actors will sustain it without forcing taxpayers to foot the bill indefinitely.

By eliminating the constant churn of updates to a speculative emissions database, the administration has cut a layer of bureaucratic fat that was masquerading as moral necessity. The companies that genuinely want this data—either for public relations purposes or to meet foreign regulatory demands—can still access it, now funded by those who find it indispensable. For the rest, it’s one less mandatory climate confession, and one more reminder that federal agencies are not in the business of enforcing faith in models, but of safeguarding the public interest with sound, verifiable science.

If anything, this move should be seen as an example of governance sanity—removing the compulsion to genuflect before uncertain numbers, deflating the kind of NYT melodrama that mistakes a data management decision for an attack on civilization, and slowing the seamless conversion of taxpayer-funded “climate data” into private investment opportunities. The private sector can handle virtue-signaling exercises for those who want them. Washington, meanwhile, has more pressing and tangible environmental concerns to address.