By Bibhuti Pati
The commercial activities including the much publicised Belt Road Initiative (BRI) that China has undertaken all over the world are accused of releasing high emissions creating grave environmental concerns as most of power plants financed by China are based on fossil fuel.
China has been indulging in gross violation of international environmental norms despite the declaration by its President XI Jinping that all projects must be green and sustainable and formulating policies that are aimed at green transformation of China’s economy.
The environmentalists and experts have expressed serious concern over China’s developmental activities in infrastructure and power sectors particularly in BRI because what it is providing to the countries that are part of the BRI is contrary to what its leaders preach.
The China Development Bank and China Export-Import Bank, two overseas state-run arms, have financed power plants in 38 countries in the span of last six years, and half of which are fossil fuel-based. Most Chinese-financed, coal-fired power plants built overseas use low-efficiency, subcritical coal technology, which produce some of the highest emissions of any form of power generation, resulting in increased emission levels.
For instance in Pakistan that will be the main beneficiary of BRI, China has pumped in massive amounts of BRI spending through the China-Pakistan Economic Corridor, China has financed so many coal-fired plants that the country’s power investments are more than twice as emissions-heavy as Pakistan’s electric grid was in 2012. The much of the BRI pass through ecologically sensitive areas. Instead of installing solar projects and constructing hydroelectric dams, China has opted for fossil fuel-based power projects that are all set upset ecological balance in the region.
The environmentalists’ world over hardly rate the US as best guardian of the world’s environment, but it can also not be called as one who constructs infrastructure that is inconsistent with its own environmental standards. What Beijing is doing is keeping its development banks, commercial banks, construction firms, and engineering firms busy while exporting a lot of unfeasible environment unfriendly technologies in the process resulting in spreading of “debt trap diplomacy”
Various outfits that deal with the issues of safe environment are of the view that Beijing is leveraging environmentally and socially harmful infrastructure projects to counter the military presence of the US in India-Pacific region, while attempting to give itself a competitive advantage over the US in important emerging markets.
Beijing-backed coal projects are, for instance, enabling the CCP to broaden its defense cooperation with Islamabad while simultaneously helping to degrade its environment. Pakistan’s leaders—and leaders in other developing countries where Beijing is doing the same thing—either do not see the connection, or are too addicted to Chinese investment to object to Beijing’s approach to crafting a strong bilateral relationship.
The BRI has an Ecological and Environmental Cooperation Plan which states that cooperation on environmental protection is a basic requirement for the BRI, and that such cooperation is vital for a green transformation of China’s economy. The plan asserts that it is crucial that BRI-related projects comply with the environmental standards that China aspires to back home.
In 2017, the Chinese government came out with policies designed to promote BRI sustainability, such as “Guidance on Promoting Green Belt and Road” and “Vision and Actions on Energy Cooperation in Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road”. These documents specifically state that BRI projects will be used to advance the Paris Accord and the UN’s 2030 Sustainable Development Goals.
At the Second Belt and Road Forum, in 2019, participants from representing world community issued a joint statement that focused on promoting green and socially sustainable development through BRI projects. A series of initiatives were launched, including two focused on maximising the efficiency of lighting and cooling to reduce energy use, and on building sustainable cities. All these ideas are yet to be converted into reality.
Some 38 BRI countries have a target of installing 644 gigawatts of renewable energy between 2020 and 2030, which could require up to $644 billion in investment. Chinese banks and state lenders have proposed funding up to 120 of those gigawatts with new coal-fired power plants, accounting for up to 26 percent of global coal capacity under development outside China. Ninety one percent of loans made by six major banks in China to BRI energy projects were used to finance power projects that use fossil fuels for a period from 2014 to 2017.
A new coal plant has an average economic life of more than 30 years. Constructing such plants commits developing nations to increased emissions and high levels of air pollution for decades into the future. Coal-fired power plants are also at high risk of becoming stranded assets as the price for renewable energy kept declining.
However, BRI is not solely a conveyor belt for coal. China is also exporting renewable sources of energy to other countries, its commercial banks have become active in the space, and it has provided the financing, engineering, construction, and/or equipment for several of the largest solar projects in the world.
Apart from increased financing costs because of high perceived risk in many of the countries of the BRI, there is also an absence of policy support to encourage much of the required renewable energy investment. A big part of the reason why wind and solar have taken off in China is the subsidies the government provides to make renewable energy prices competitive with coal. Many of the countries in the BRI do not have the tariffs, carbon credit markets, or other financial mechanisms required to achieve a viable renewable market place.
Given the resources and sophistication required to create such a market place that is likely to remain an unachievable goal for many developing countries for a long time to come. If China was smart, it would work with the Multilateral Development Banks to create the enabling environment to support such domestic environments as part of the BRI grand plan. Currently, any such ambition will remain exclusively in the domain of Chinese financial and developmental institutions.
An ambitious plan unveiled by Chinese President Xi Jinping in 2013 to boost connectivity in over 70 countries, the world’s largest ever infrastructure project includes the financing and building of everything from roads to airports and is estimated to cost anywhere from US$4trillion to US$8 trillion.
A study titled ‘Greening the Belt and Road Initiative’ released by the World Wildlife Fund and HSBC last month revealed that apart from the lack of information on sustainable and green investment opportunities, getting the BRI to “go green” has not gained the proper attention of the financial fraternity nor the wider private sector. Rich in biodiversity, Southeast Asia’s fragile ecosystems and the many communities which depend on them for survival are especially at risk due to the BRI’s ever-expanding list of infrastructure projects. Biodiversity at risk
Chinese-backed hydro power projects along the Mekong River – which spans Cambodia, Lao, Myanmar, Thailand and Vietnam – have seen dams cause river flow changes and block fish migration, leading to a loss of livelihood for communities there which live-off the river. Fish stocks have declined in recent years due to hydropower dams built upstream in Cambodia and neighbouring countries.
According to the Fisheries Action Coalition Team, a group which promotes sustainable resource management Cambodia and neighbouring countries. Apart from the loss of flora and fauna, deforestation in areas such as the Pan Borneo Highway – which spans Malaysia, Indonesia and Brunei – also causes landslides, floods and other disaster mitigation concerns. Failure to protect the environment means that local communities will have to find other ways to provide ecosystem services such as clean water and air.
The WWF has listed over 1,700 critical biodiversity spots and 265 threatened species that will be adversely affected by the BRI.