Green energy is the new focus of China’s one-of-a-kind Belt and Road Initiative, or BRI, which aims to build a range of infrastructure projects from Asia to Europe.
The eco-friendly version of the BRI has attracted the attention of some 70 other countries that are receiving new infrastructure from the Asian economic superpower in exchange for expanding trade.
The reset on China’s eight-year-old $1.2 trillion effort comes after it left a frightening layer of haze in parts of Eurasia, where those projects operate.
Now the county, which is already home to pollution conscious, is building a new BRI that will focus on green projects rather than polluting coal-fired plants. It would still further China’s goal of widening trade routes across Eurasia through the initiative’s new ports, railways and power plants.
The second Belt and Road, announced in China on 18 October, coincides with the 2021 United Nations Climate Change Conference, or COP26, which runs from Sunday to 12 November in Glasgow, Scotland. China can use the platform to elaborate its plans.
Rajeev Biswas, chief economist for Asia-Pacific at market research firm IHS, said: “The shift in China’s policy toward a more green BRI reflects China’s commitment to reaching net zero carbon emissions by 2060 and the green transition within China’s domestic economy. Demonstrates efforts to implement.” Market.
“In addition, the change in China’s policy … also reflects the increasing policy preference towards renewable energy and sustainable development policies by most of China’s BRI partner countries,” he said.
The Belt and Road helps to lift the economies of developing countries from Kazakhstan to modern countries like Portugal. The BRI also upsets China’s superpower rival, the United States, which has no comparable program.
History of focus on fossil fuels
The US research group Council on Foreign Relations said in a March 2021 study that China has a history of investing billions of dollars in fossil fuel projects in other countries since 2013.
From 2014 to 2017, it says, nearly 90% of energy sector loans to BRI countries by major Chinese banks were for fossil fuel projects and China was “involved” in 240 coal plants in just 2016. In 2018, the study said, 40% of energy loans went to coal projects. Those investments, the group says, “promise to make climate change mitigation more difficult.”
The Beijing-based research center Global Environmental Institute says South and Southeast Asia are the main destinations for coal-fired projects, accounting for 80% of the total Belt and Road portfolio.
Global shift towards green energy
Chinese President Xi Jinping said last year that China would try to peak its carbon dioxide emissions before 2030. The second calls for working with the Belt and Road partner countries on an “energy transition” toward more wind, solar and biomass, the National Energy Administration and Shandong Provincial. The government said in a statement on October 18.
Jonathan Hillman, Senior Fellow in the Economics Program at the Center for International and Economics, said some countries are pushing China to offer green projects because of environmental pressures at home, although some foreign leaders are quick to prove achievements in office, Prefer cheaper, more polluting options. Strategic Studies Research Organization.
“There was a period in the first phase of the Belt and Road where projects were being pushed out the door and not enough attention was paid to the quality of those projects,” he said.
Poor countries are now under pressure to meet people’s basic needs against environmental issues, said Song Seung Woon, an economist at the private banking arm of Malaysian bank CIMB. The basics still “take priority,” he said, and new coal-fired plants help.
“While I would say that environmental issues (are) important, I think a lot of people don’t realize how much more efficient these more modern coal plants are, so I think we have to have a balance,” Song said. said.
However, over the years, the cancellation rate of coal-fired projects has exceeded new approvals, Hillman said. “The action has honestly come from the participating countries,” he said. “They’ve decided that’s not the direction they want to go.”
In February, Chinese officials told Bangladesh’s finance ministry that they would no longer consider coal mining and coal-fired power stations. Hillman said Greece, Kenya, Pakistan and Serbia have asked China to dial back on polluting projects.
“The next decade will show the extent to which the Belt and Road will drive green infrastructure,” says London-based policy institute Chatham House in its September 2021 report.
Belt-and-road renewable energy investment for energy projects reached a new high of 57% in 2020, according to IHS data.
New promises in COP26?
Biswas said the COP26 is expected to showcase the environmental achievements of the participating countries as they strive to meet the UN Paris climate change commitments.
China’s statements so far before the conference differ little from previous statements. But China’s Energy Administration said on October 18 that its second Belt and Road “emphasizes the need for increased support for developing countries” in terms of funding, technology and the ability to complete green energy projects.
Chinese companies on BRI projects may eventually need to mitigate environmental risks, Biswas said. Those companies, in turn, will follow principles issued in 2018 to ensure that their projects generate less carbon. A year later, as international criticism mounted, Chinese President Xi added a slate of Belt and Road mini-initiatives, including some that touched on green projects.
But the plans for 2019 were non-binding and transparent, Hillman said. At COP26, he said, “I would take any major announcement with more than a grain of salt.”