Oil is the blood that flows through the global economy. Due to its plethora of uses from production to transportation, black gold has a heavy hand in moving inflation and input prices. However the unfortunate reality is that a small group of highly clandestine ministers control output and effectively the price of oil. The Organization of the Petroleum Exporting Countries (OPEC) is a cartel of oil producing countries with the primary goal of driving up oil prices through collusion, allowing them to secure a steady income and exercise political leverage. Partially because of the OPEC cartel, energy hungry states - primarily in the West - are in a precarious position where much sweat, resources, and blood has been siphoned towards obtaining oil. Some would even go as far as arguing that much of American foreign intervention is underlined by energy aspirations flying under a novelty humanitarian banner.

OPEC ministers will be meeting in Geneva this week to discuss limiting oil production after per barrel prices fell below the illusive $90 mark. If a decision is reached to cap daily production, the already fragile global economy will suffer from rising prices across the board. Such unpredictable and politically charged decisions by OPEC members (especially Iran and Venezuela), and megalomaniacs á la Putin have provided the impetus for a shift in U.S. energy policy.

In the last decade there has been a massive departure from foreign petroleum towards procuring alternate means of energy. The U.S. presently obtains the majority of its petroleum from North America — primarily Canada, Mexico, and domestic oil fields. Today only 40% of U.S. oil is imported. Part of Obama’s non-interventionist foreign policy is cutting off messy ties with Middle Eastern sheiks and extremist authoritarian regimes. Rather than cozying up to dictators, the goal is for the U.S. to be petroleum self-sufficient by around 2030. With American oil barred from export, the fracking revolution in full throttle and refineries being erected across the West Coast, the Gulf of Mexico, Texas, Alberta, Alaska, and etc.— the pieces seem to be in the right place.

Yet petroleum self-sufficiency isn’t the end game. Oil is a futile investment in the long run, and the need for a viable alternative energy source is going to be a reality once fields begin to run dry. Halfway across the globe, China recognizes this impending predicament. Having averaged around 10% percent growth for the past decade, China’s environment has taken a severe battering in the process. As the world’s largest factory, China is responsible for a third of the world’s greenhouse gas emissions, and is the leading consumer of coal. Life expectancy in certain cities has fallen by a whopping 6 years, and public opinion regarding the environment has taken a highly aggressive stance. With an authoritarian regime, the Chinese Communist Party (CCP) heavily relies on surging standards of living in order to appease the public disconnect from policy intervention. Paradoxically, China’s frenzied growth is the result of lax environmental standards buttressing the production of low-cost goods.

With wages already rising rapidly in China, new environmental standards serve to merely increase the cost of production. This creates a pressing need to reallocate resources away from manufactured goods and on to more high-value services. Thus far however, Chinese innovation has been subpar. While it is often news that China is filing for patents at a tremendous rate, the majority of these registrations are tweaked up and modified versions of Western products — a headache for party officials desperate to not let China collapse into a middle income trap.

In an attempt to kill two birds with one stone, the CCP cushions domestic solar energy companies and provides generous grants with hopes of triggering technological breakthroughs. Not only does this help quell domestic environmental concerns, it also pushes China to the vanguard of energy innovation and self-sufficiency. Today, China is both the world’s largest market and producer of solar products — an immense feat accomplished by a 232% increase in domestic installations over the previous year. Solar energy is now the fastest growing energy technology in the world, with an average of 50% yearly increase in installed capacity.

Expectedly, Chinese solar products have come under fire from competing international firms who cite dumping concerns, and competition with the Chinese government instead of Chinese companies. Earlier this fall, the U.S. government slapped a duty on Chinese solar products in an attempt to bulwark dumped panels from flooding the market and destroying U.S. competitors. However this is only part of the greater narrative at hand; in an unstable system the long-term importance of having a strong renewable energy sector outweighs cheaper panels in the short-run. Furthermore, if Chinese energy companies successfully squeezed out international competition via cheaper products, a solar-energy oligopoly would ensue — broiling future problems similar to that with oil. Aside from just price setting, Chinese companies would have a first-mover advantage, specialization and productivity gains, patent rights, economies of scale and more. Contrary to popular wisdom, this may soon be a reality; Chinese firms already dominate production of solar modules, solar cells, thin film, and polysilicon.

Ultimately it is the consumer that loses out from duties and it is environment that has to further sustain degradation. Some adamantly argue that if the CCP wants to provide the world with cheap goods and that they are doing both the Western markets and the environment a favour. The idealist in me wants to agree but the realist understands that this is a fundamentally shortsighted and shallow analysis. While global laissez-faire of renewable energy products would be a noteworthy boon for both the economy and our environment, history has taught states better than to be over reliant on others for energy. Protectionism of renewable energy products will only intensify in the coming years as the shift away from petroleum becomes a sobering truth.