Experts: How will the next decade of China’s ‘belt and road initiative’ impact climate action?

Later this month, China will mark the 10th anniversary of the “belt and road initiative” (BRI), its global infrastructure project, at a major international conference in Beijing.

The BRI is a global infrastructure project that aims to develop trade routes between China and the rest of the world. It has been criticised for supporting development of overseas fossil fuel infrastructure, particularly coal-fired power. Image: , CC BY-SA 3.0, via Flickr.

The summit, set to be attended by more than 110 countries, according to Chinese state media, will include “green development” as the focus of one of three high-level forums.

Yet the BRI has faced significant criticism in its first decade for supporting the development of overseas fossil-fuel infrastructure, particularly coal-fired power stations.

Although Chinese president Xi Jinping has pledged to end support for overseas coal power – and his country has signalled an intention to pivot its infrastructure initiative towards “high quality”, signifying, among other values, low-carbon development – questions remain over the BRI’s direction in its second decade.

Carbon Brief has asked leading experts what impact the BRI might have on climate action in the years ahead.

Energy projects and the BRI

The BRI is a global infrastructure project that aims to develop trade routes between China and the rest of the world. It has been criticised for supporting development of overseas fossil fuel infrastructure, particularly coal-fired power. 

China’s role in constructing BRI projects largely takes the form of Chinese commercial involvement in project development or loans provided by Chinese financial institutions. 

China’s policy banks have reduced their lending, with financing now provided by a broader range of actors, from the state-owned Bank of China to HSBC.

China rarely owns the assets it develops, with Sri Lanka’s Hambantota Port being a well-known exception.

Energy and transport infrastructure are the most common types of BRI project. In 2023 to date, for example, energy projects made up 36 per cent of BRI investment, while transport projects accounted for 28 per cent, according to the Green Finance and Development Center (GFDC).

GFDC found that cumulative investment across projects in all sectors exceeded US$1tn as of August 2023, according to its analysis of data compiled by the Chinese ministry of commerce, the American Enterprise Institute and by GFDC itself.

The Council for Foreign Relations found that “between 2014 and 2017, 91 per cent of energy-sector loans made by six major Chinese banks to BRI countries were for fossil-fuel projects”. 

China controls almost all parts of the green-energy supply chain – from critical minerals for batteries to wafer production for solar, from manufacturing wind turbines to the necessary financing. Without China’s cooperation, a green-energy transition is hardly achievable.

Prof Christoph Nedopil Wang, director, Griffith Asia Institute

From 2017, however, the Chinese government began encouraging the “greening” of the BRI. Then, in 2021, president Xi Jinping pledged that China “would not build new coal-fired power projects abroad”. 

Recent BRI projects developed with the aim of reducing carbon emissions include Indonesia’s “Whoosh” high-speed railway, the Noor Abu Dhabi solar plant in the United Arab Emirates and Sri Lanka’s Colombo International Container Terminal (see more below).

Researchers also found that, in line with Xi’s pledge, “no new investments in coal power plants have been recorded under the BRI”, China Dialogue reports, although “loopholes” have allowed some coal projects to proceed.

Below, Carbon Brief asks five leading experts the same question: China has stated an intention to pivot the BRI towards low-carbon energy development. How do you think the BRI could affect climate action over the next decade?

Their responses have been edited for clarity and length.

Prof Kevin P Gallagher, director of the Boston University Global Development Policy Center:

As the BRI moves into its second decade, China can solidify its pivot toward low-carbon development in the global south. According to our research at the Boston University Global Development Policy Center, in the early stages of the BRI the majority of China’s overseas energy finance was…in fossil fuels in general and coal-fired power plants in particular.  

Emissions from the operating Chinese-financed power plants around the world now emit upwards of 245m tonnes of carbon dioxide (CO2) annually, roughly the energy-related CO2 emissions from the entire country of Spain or Thailand annually.

In 2021, China announced it would not build new coal-fired power projects abroad and to step up support for low-carbon development. Moving forward, China could pledge to ramp up overseas financing for low carbon development and adopt a green project pipeline facility to ensure alignment with these directives. 

Prof Lin Boqiang, dean of the China Institute for Studies in Energy Policy, Xiamen University:

In some countries along the “belt and road”, despite the rapid growth of energy demand, the development of green energy is limited due to their relatively backward economic and technological level and the lack of advanced clean-energy technology and facilities. Through the construction of renewable energy projects, such as wind and solar power, China can provide technical, financial and experience support to host countries to promote the development and upgrading of their renewable energy industries.

By providing more clean-energy supplies to these countries…China helps them reduce their dependence on traditional energy sources and promotes energy transformation and green development. At the same time, some countries along the belt and road have problems such as unstable energy supply, energy poverty and low energy efficiency…Cooperation to develop renewable energy projects…will help these countries improve their energy security and promote sustainable development along the belt and road.

Yasiru Ranaraja, founding director of the Belt and Road Initiative Sri Lanka (BRISL):

China’s commitment to shift the BRI towards low-carbon energy development has significant implications for climate action in the coming decade. When we delve into the context of global climate efforts, we encounter a historical divide between developed and developing nations regarding climate justice and the debate over the common but differentiated responsibilities principle in climate action. 

While all parties to the United Nations Framework Convention on Climate Change (UNFCCC) acknowledge the importance of addressing climate change, the approach to climate action varies among member states. Many developing nations prioritise economic growth, poverty reduction, climate mitigation, and energy security over stringent top-down climate regulations. 

China, through the BRI, has emerged as a crucial player in advocating a three-phase approach to low-carbon development: funding, construction and operation. Under the BRI umbrella, numerous infrastructure projects…are dedicated to green development…For example, in Sri Lanka, the Colombo International Container Terminal (CICT), which is an investment development project under BRI, has embraced green technology since its inception in 2014. 

This terminal has witnessed a remarkable increase in cargo volumes over the years while prioritising environmental sustainability. The shift to electric cranes has resulted in a 45 per cent reduction in CO2 emissions and a 95 per cent decrease in diesel consumption…Additionally, more than 80 per cent of the terminal’s electricity comes from solar technology. The terminal’s success story…exemplifies how commercial prosperity and environmental protection can coexist harmoniously. 

Prof Christoph Nedopil Wang, director of the Griffith Asia Institute, Griffith University:

China controls almost all parts of the green-energy supply chain – from critical minerals for batteries to wafer production for solar, from manufacturing wind turbines to the necessary financing. Without China’s cooperation, a green-energy transition is hardly achievable – whether in the BRI or beyond…BRI countries, meanwhile, must improve their energy planning, energy policy and power markets to be able to attract sufficient Chinese investments in green energy. This should include a phase-down of fossil subsidies and better utilisation of blended finance to reduce financing cost for green energies, as well as longer-term green energy PPAs (power purchase agreements). 

A big question remains on the accelerated phase-down of Chinese sponsored coal-fired power plants and replacement with green energy. A recent study by the Green Finance & Development Center and Climate Smart Ventures shows significant financial benefits for Chinese sponsors of plants in Vietnam and Pakistan when accelerating retirement and replacement.

Guo Hongyu, deputy director of Greenovation Hub

Most BRI partner countries are developing countries whose social, economic and ecological systems are disproportionately affected by climate change impacts. These further undermine their efforts to achieve the UN sustainable development goals. Building on existing guidelines on greening the BRI and the pledge to increase the support for green and low-carbon energy development in developing countries, BRI cooperation could help scale up climate solutions, build climate resilience and mobilise innovative financing while minimising climate-related risks to BRI projects and local communities in this critical decade. 

[Options to achieve this include:] Firstly, share good practices and encourage cooperation with BRI partner countries on renewable energy, especially distributed solar in rural development and poverty alleviation, synergies between air pollution control and CO2 emission reduction, as well as green finance policies and innovative financial products. Secondly, enhance climate and nature-related environmental risk management and disclosure requirements for overseas investments. Lastly, share knowledge on planning, early warning systems and assessments of climate-related risks and their impacts, to support BRI countries to formulate national adaptation plans based on national circumstances, and to identify gaps in adaptation financing. 

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