Several Chinese suppliers to major tech companies and processor manufacturers such as Apple, Intel, Nvidia, and Tesla are having their power cut off for several days each month by local government officials in order to comply with a Chinese government directive to reduce power consumption in the country in order to reduce carbon emissions.
Eson Precision Engineering, a subsidiary of Foxconn, the world’s largest iPhone assembly contractor, has suspended production of key mechanical parts for Apple and Tesla at its Kunshan facilities for six days, beginning this past Sunday. According to a report in Nikkei Asia, the company stated that the outage was caused by the city cutting off electricity supply for industrial use.
“The company will leverage its inventory to maintain the operation while production is halted,” Eson said in a recent filing to the Taiwan Stock Exchange. “We expect to schedule production on weekends or during the upcoming holidays to meet the needs of our customers.”
Other major suppliers, such as Concraft Holding, will rely on existing inventory stock to get them through a production halt, while others, such as iPhone assembler Pegatron, are preparing generators in case they receive notice that power will be cut off. The new energy consumption restrictions come as Beijing begins to crack down more aggressively on local provincial governments, such as those in Jiangsu and Zhejiang, that fail to meet lower energy consumption targets.
The Chinese government is setting such aggressive power consumption targets in response to a number of ongoing issues, including a surge in coal and natural gas prices, as well as its efforts to reduce carbon emissions and reduce energy demand, which is driving up energy prices.
The impact on major technology suppliers throws another kink in the global supply chain, which is already dealing with a semiconductor shortage and ongoing covid-19 outbreaks in countries such as Vietnam and Malaysia, where many technology components are produced to take advantage of low wages and fewer regulatory restrictions.
You might think that the Chinese government’s recent actions are a draconian approach to dealing with climate change, and you would be correct. These are bold steps, but they are where we find ourselves after nearly three decades of attempting to ignore the problem of climate change.
The most recent UN Intergovernmental Panel on Climate Change report, published last month, concludes that 1.5 degrees Celsius of warming over the next two decades is essentially unavoidable, because climate changes are a delayed response to past carbon emissions.
Today’s climate crisis, from arctic wildfires to major flooding in Europe to the depletion of vital aquifers around the world, is the result of carbon emissions we produced two decades ago, so the next two decades will see an acceleration of these crises commensurate with the soaring carbon emissions produced in the previous two decades.
It’s not that the world didn’t know this was happening; it’s just that major industrialized countries like the United States and Western Europe were unwilling to make the necessary changes to prevent it, because doing so would have meant slowing economic growth and lowering the standard of living for its wealthiest and most influential citizens.
China isn’t immune, but its more aggressive approach to reducing carbon emissions is pretty much the bare minimum we all need to be doing to ensure that the decades after 2041 aren’t as bad as the two decades before them.
If we continue to prioritize the global supply chain over the environment, the costs of the actions we’ll need to take in 20 years to avert disaster will make shutting down major industrial centers for a couple of days a month look like a steal.
