The United States can assert its energy dominance over China by expanding energy development, supporting the innovation pipeline, and improving the grid.

In a recent meeting with top oil executives, President Trump emphasized the importance of his energy dominance agenda. Policy priorities included lowering energy costs, bolstering the grid, and out-competing China in the artificial intelligence race. The key to all three is unleashing American energy innovation. The administration’s National Energy Council should put forth an agenda that opens access to investment and supplies, modernizes permitting and outdated regulations, and leverages the Department of Energy (DOE) to develop emerging technologies. 

China’s Energy and Environmental Reality

Policymakers must be realistic about China on multiple fronts. China is no green energy darling. The country produces and consumes massive amounts of fossil fuels, particularly coal, without adequately deploying pollution control technologies. The latest International Energy Agency report found that global coal consumption reached a record high in 2024, with China accounting for one out of every three tons of coal burned. China has built over 1,000 coal-fired plants in the last thirty years, has more than five times the number of coal plants as the United States, and has accounted for 95 percent of new coal construction in 2023.

China is by far the world’s largest carbon dioxide emitter. It produces more than double the United States’s carbon emissions, accounting for nearly one-third of global emissions. In addition to being the world’s largest greenhouse gas emitter, China has a terrible environmental record. Its centrally managed industrial policy, without serious concern for the environment and people’s health, has resulted in harmful air pollution, soil contamination, and poor water quality.

China’s Strategic Clean Energy Expansion

At the same time, China has strategically positioned itself to dominate clean energy markets by whatever means possible. The People’s Republic of China (PRC) has methodically and relentlessly built its clean energy industries through massive state subsidiesand forced labor. Whether in solar photovoltaics, critical minerals processing, or nuclear energy, China has aggressively built out clean energy capabilities and is expanding investments worldwide. China is a well-known dominant player in the critical minerals supply chains, particularly in processing. 

The PRC is rapidly expanding its dominance of the electric vehicle (EV) market. In October 2024, hybrids, battery electric vehicles, and plug-in hybrid electric vehicles made up more than half of all auto sales in China. With massive government spending and subsidies for EV buyers, China has more than one hundred EV brands offering lower sticker prices than the United States, and China has built ten million charging stations in the last fifteen years. As CBS News stated, “The United States blinked, and China built an electric vehicle empire.”

Yet another area of rapid growth for Chinese clean energy production is commercial nuclear energy. In the last decade, China added thirty-four gigawatts of nuclear capacity. The country has fifty-five reactors online, with another twenty-three under construction. The U.S. Energy Information Administration points out that “The United States has the largest nuclear fleet, with 94 reactors, but it took nearly 40 years to add the same nuclear power capacity as China added in 10 years.”

Moreover, China’s total research and development (R&D) budget grew from $246.5 billion in 2011 to $668 billion in 2021, and by 2027, Chinese R&D spending will likely surpass that of the United States. The United States is currently at a tax disadvantage concerning Chinese R&D. The lapsing of immediate expensing in 2024, or full expensing, which allows companies to deduct the totality of research expenses in the year they occur, has already decreased American R&D investment. 

A Pro-Growth, Pro-Energy Strategy for the United States

The United States will not beat China by being like China but by having policymakers embrace an energy and environment policy agenda rooted in economic freedom. Policy should liberate energy markets and unleash human ingenuity to develop and supply all forms of energy, and policymakers should recognize that:

1. Oil and natural gas produced here have a better environmental record and emissions profile than most other countries. Recognizing that these resources will continue to be the largest share of future global energy consumption for decades, there are economic, geopolitical, and environmental advantages to using energy developed in the United States and exported to other countries. To do otherwise is to cede grounds to oil and gas-producing countries whose interests are hostile to the United States. Not only will this disadvantage the United States’s economic and national security interests, but it will also hinder both U.S. and global environmental ambitions. 
2. The United States should not concede the innovation ground to China and other countries that threaten it. American companies can be leaders in nuclear, geothermal, carbon capture, and battery storage. We can expand wind and solar without dependence on subsidies and mandates. Other countries should not have to rely on Russia and China for their energy needs but should embrace American technologies, including its vast reserves of natural gas and minerals.
3. Economic isolation is the road to poverty. Opening markets to trade, leveraging partnerships with allied countries, and expanding opportunities to export innovative American technology will help lower prices at home and expand democratic influence abroad. 

The United States must get out of its own way through a pro-growth, pro-environment, and pro-energy policy agenda. To that end, Congress and the Trump administration prioritize: 

• Opening access to energy development and delivering on permitting reform. Administrations from either party should refrain from politicizing energy development and energy projects. Open, competitive markets and public policy should allow for access to energy development, whether it is a solar project on federal lands or a liquefied natural gas export project. If a project is financially viable and meets rigorous environmental standards, the federal government should not arbitrarily stand in its way. 
• Expanding immediate expensing. Congress should resist any inclination to increase the corporate tax rate and make good on the president’s campaign promise to lower the rate to 15 percent. Furthermore, Congress should remove biases against investment by making full expensing permanent (including for R&D expenses) and neutral cost recovery. Such pro-growth tax reforms would drive investments in innovative and more efficient technologies, cleaner energy development, and minerals processing and incentivize more research and development. 
• Supporting and strengthening the energy innovation pipeline. In addition to restoring immediate expensing for R&D, Congress should expand opportunities for the private sector to de-risk and scale up promising energy technologies. Programs such as the Advanced Research Projects Agency-Energy, the Advanced Reactor Demonstration Program, and the Milestone-Based Fusion Development Program advance early-stage technologies that would otherwise not be profitable or receive private financing. To the extent allowed by law, Energy Secretary Chris Wright should streamline, reform, and standardize the processes and improve the coordination and efficacy of DOE’s basic and applied programs. 
• Ensuring a resilient and reliable grid. The United States needs a reliable grid to meet the needs of energy-intensive artificial intelligence. Critically, a resilient grid is vital to keep the lights and heat on for American families, to power our hospitals, and to run the economy. Permitting reform should include transmission and distribution to improve affordability and reliability at the lowest possible cost while ensuring that those who receive the benefits of transmission expansion and upgrades are the ones who pay for it.
• Removing China’s status as a developing economy from the United Nations environmental treaties. President Trump has again withdrawn the United States from the Paris Climate Agreement. In his first speech, Trump said, “The United States will not sabotage our own industries while China pollutes with impunity.” Regardless of what one thinks of the efficacy of the Conference of Parties (COP) and the need for American engagement, President Trump is right. One reason China pollutes with such impunity is that the country still receives preferential treatment as a developing country under the United Nations Framework Convention on Climate Change. Yet, China is the world’s second-largest economy. The World Bank classifies China as an upper-middle-income country, and it will soon become a high-income country. The U.S. House of Representatives unanimously voted to change China’s classification. While it will take more than reclassification to hold China accountable for its environmental calamities, it is an essential step in the right direction. Working with its allies, the United States could enact measures with more teeth to force China’s hand on curtailing its pollution.

An “America First” energy policy should avoid technological and resource biases. America will continue its energy dominance in oil and natural gas, but there are tremendous economic opportunities for emissions-free energy domestically and internationally. Developing a full range of energy sources that can compete in the market and building the necessary pipeline and transmission and distribution infrastructure will lower energy bills, drive the deployment of cleaner technologies, and improve America’s energy security and global leadership.

Nick Loris is the Vice President of Public Policy at C3 Solutions. He writes and regularly testifies before Congress on energy, climate, and environmental issues.

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