UM lecture ignites China–US climate and EV debate with Nobel laureate

[Photo: Ricaela Diputado]

A lecture at the University of Macau (UM) on climate change turned into an exchange over the widening climate and technology divide between China and the United States, as a professor and a banking executive pressed Nobel Prize-winning economist Robert F. Engle earlier this week on the U.S. lag in electric vehicle (EV) adoption and prospects for closer cooperation.

The exchange took place during a talk delivered by Engle, the 2003 Nobel laureate in Economic Sciences, titled “Can We Stop Climate Change?”, and served as a lead-up to the annual meeting of the Society for Financial Econometrics, which Engle co-founded and is being held in Macau this year.

Professor Jacky So, a longtime academic at UM and former dean of its Faculty of Business Administration, took part in the Q&A session following the lecture.

Before posing his question, he shared a personal account that grounded climate risk in Macau’s lived experience.

“I used to live in the graduate faculty apartment,” So recalled. “We don’t have earthquakes, but we have typhoons. That day, the building moved. Water came through the window. No power, no water for three days. Over ten people were killed in a downtown (Macau) parking garage.”

With that context, So asked Engle: “Given America’s technological prowess, why has it failed to embrace EVs at China’s scale?” He noted that China’s EV adoption has reached 80 to 90%, while the U.S. lags at roughly 15%.

“In China, we don’t have much gas or oil,” So said. “Let’s do it better. It’s a sunk cost. It’s an endowment. I wish the two countries would understand we’re not trying to fight each other. Let’s work on it, and let’s trade.”

Patrick Huen, vice-chairman of ICBC Macau and a member of UM’s University Council, then posed his question. He noted that the rapid expansion of artificial intelligence (AI) is driving significant new electricity demand that could offset climate gains.

“China is doing well,” Huen said. “What further advice would you give to China to improve its energy renewal effort?”

Engle praised China’s green investment as “very impressive,” noting that Beijing has turned decarbonization into an export opportunity, with strong global demand for its solar panels, batteries, and EVs. However, he also offered criticism.

“I think some of the state-owned enterprises are inefficient,” he said. “China could move away from that. They could be more supportive of technology developed outside state-owned enterprises.”

He also raised concerns about education becoming too narrow, saying, “They don’t learn about Chinese history, let alone the rest of the world’s history or culture.” For Macau’s higher education sector, which emphasizes its blend of Chinese and Western heritage, the comment carried particular resonance.

Markers of a transition

Engle offered a counterpoint to So’s question about U.S. EV adoption, saying, “Despite political rhetoric, American oil companies are not behaving as if they see a long-term future in fossil fuels.”

He pointed to a recent auction of drilling rights in Alaska’s Arctic wilderness, where roughly 500,000 square miles were offered but attracted only two companies, which together bid on just 10% of the land.

“These companies are not seeing a rosy future,” Engle said. “They talk the way you say, but they’re not acting the way you say. It takes 20 years or more before you get anything out of that. They don’t believe the price of oil is going to stay up there.”

He added that even Middle Eastern producers are aggressively diversifying into tourism and aviation. “Termination risk is a risk for all of them.”

Implications for Macau

Engle also demonstrated risk-monitoring tools that track banks’ exposure to climate-related losses, systems already used by central banks globally.

For Macau’s financial sector, he suggested, climate transition is already affecting asset pricing, and similar tools could help regulators manage future risks.

Engle, who earlier described the United States as a “free rider” on global climate efforts, ended on a cautiously optimistic note.

“The falling cost of renewable energy makes decarbonisation an opportunity rather than a cost,” he said. “The U.S., by not pushing renewable energy, is going to end up using inefficient sources.”

He showed a photograph of three of his five grandsons. “They’re very worried about the future. If we can tell them we’ve got this solved, they’ll be very happy.”

For Macau, still charting a path beyond gaming, he suggested the road forward lies in deeper integration with China’s green transition and a clearer understanding of emerging risks.