Will China’s plan for a ‘green silk road’ live up to environmental promises?

Show caption A BRI-financed rail line running from China to Laos has led to deforestation and the eviction of thousands of families. Photograph: Wang Guansen/AP China Will China’s plan for a ‘green silk road’ live up to environmental promises? China has pledged to make its Belt and Road initiative greener, but critics say environmental guidelines ‘nonexistent’ John Vidal for Ensia Tue 20 Sep 2022 18.35 BST Share on Facebook

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In July 2019, China rolled out the red carpet for the Bangladeshi prime minister, Sheikh Hasina. Flown to Beijing by the Chinese government, she was greeted with an honour guard and banquet and received by the president, Xi Jinping, and the prime minister, Li Keqiang. Three days later, she returned to her capital, Dhaka, with nine agreements worth billions of dollars to build power plants and provide other development assistance.

Hasina’s short visit benefited both countries. Big new infrastructure projects would help lift living standards in Bangladesh, but also enable China to strengthen its influence on its fast-growing neighbour of more than 160 million people.

Those loans and agreements made up one very small part of China’s Belt and Road Initiative (BRI) – the world’s largest infrastructure programme since the US Marshall plan helped rebuild Europe after the second world war. Launched as a Xi flagship project in 2013, it involves China flooding the world with investments to construct a trillion-dollar-plus modern Silk Road network of many thousands of individual projects along major transcontinental corridors spanning Asia, Africa and eastern Europe.

But while many world leaders have welcomed the BRI as a way to raise cheap loans and receive grants not available from the World Bank or wealthy countries, they are becoming more cautious as the full environmental and social costs of China’s loans become apparent and their countries risk being swamped with debt.

Biodiversity threats

Many BRI projects have involved pushing roads and rail freight lines through some of the world’s biologically richest places. In one study, the World Wildlife Fund and HSBC warned that the BRI could impact many critical biodiversity spots, endangering 265 threatened species such as Amur tigers, oriental white storks and giant pandas.

The University of Queensland researcher Divya Narain, the lead author of a study published in Nature about biodiversity safeguards for the BRI, says the initiative is potentially the “riskiest environmental project in history”, poised to transform global transport and trade.

“It will have extraordinary impacts on the environment as its corridors and other projects crisscross some of the most pristine and vulnerable ecosystems in the world,” she says.

Narain has calculated from the World Bank BRI database of projects that 33 transport mega projects, including 9,500 miles (15,000km) of rail and road, are proposed or planned, and that 48 major hydropower dams are planned or under construction under the BRI. And many finished projects have already been hugely damaging, Narain says.

Much damage has been done because Chinese funds for BRI projects, unlike loans attached to World Bank or most rich countries’ aid programmes, lack restrictions meant to protect biodiversity, says Narain. Chinese companies and financial institutions working abroad have only to adhere to the “host country principle”, which means they often only have to comply with local environmental and social regulations.

Narain found that just one of 35 Chinese financiers identified as backing a series of projects demanded any safeguards to protect nature. She concluded that, unless this changed, BRI infrastructure projects would remain damaging.

A major study of 13,427 China-funded projects published by AidData at William & Mary university in Williamsburg, Virginia, found that more than one in three projects had encountered “major implementation problems” such as corruption or environmental protests. A growing number of projects, the study reported, have been cancelled, downsized or mothballed, including a new airport in Sierra Leone and large port expansions in Tanzania and Myanmar.

Strong backlash to the BRI has come from critics in wealthy countries, who point out that China is the world’s largest funder of heavily emitting coal power stations. According to a 2019 report by the Ohio-based Institute for Energy Economics and Financial Analysis, China was funding via its BRI projects more than a quarter of all new coal power plants being developed elsewhere – even as the World Bank and wealthy countries were pledging to end virtually all coal financing.

Green silk road

Stung by criticism that the BRI threatened UN climate goals, China has announced a flurry of new initiatives to rebrand it as a “green silk road”. In April 2019, Xi stated that the BRI must embrace sustainability “to protect the common home we live in”. In 2020, he said that China would aim to peak carbon emissions by 2030 and become carbon neutral by 2060.

In 2021, at the UN general assembly, Xi pledged to end support for new coal power projects abroad. This was followed in March 2022 with a new directive from China’s National Development and Reform Commission that appeared to commit Chinese banks and developers to raise construction and financing standards. A “green” BRI should be in place by 2030, while by 2025 the environmental risk prevention of BRI projects would significantly improve, the new directive said.

But analysts like Narain point out that the new guidelines mean little as the BRI is not governed centrally and no Chinese bank that is financing BRI projects has any binding requirements to protect biodiversity or lower emissions overseas. “These guidelines remain aspirational and do not require banks to put mandatory environmental standards in place,” she wrote in an email. “Unfortunately, this is still the case.”

Additionally, the BRI’s vast scale and reach, and the ease with which loans for major projects have been approved by Chinese state banks, have led to accusations that it is a geopolitical instrument of foreign policy meant to make China the most powerful country in the world under the pretext of infrastructure construction.

Sources in China accept that BRI projects often bypassed environmental regulations and damaged local biodiversity, especially in the early days. But as rivalry with the US over climate and global leadership has grown, China has become increasingly attentive to green standards.

“At the BRI’s peak, China was running around signing [memorandums of understanding] on projects that should never have been constructed,” says Scott Morris, a senior fellow at the Center for Global Development in Washington and the author of a report on a major China-Laos BRI rail project. “Now I think that China, at a serious level, is doing a rethink. They are facing political backlash and financial risk associated with environmental harm. A lot of local communities [around the world] are unhappy. They are rethinking the BRI model,” he says.

“Issuing new guidances will not translate immediately into green practices,” says Christoph Nedopil Wang, founding director of the Green Finance & Development Center and associate professor at Fudan University in Shanghai.

“Guidance is not the same as law, and developers do not necessarily understand. [Nevertheless] China is genuinely trying to bring its construction and financing standards up to another level,” he says. “I am 95% certain that no more coal power plants will be built by China. There will be exceptions, but globally there is no support now for coal. All fossil fuel [projects] are being phased out. Hydro dams will be phased out. Renewable energy is moving from the fringe to the core of BRI. It is accelerating.

But biologist William Laurance, director of the Centre for Tropical Environmental and Sustainability Science at James Cook University in Cairns, Australia, remains skeptical. “BRI will still have a major impact on ecosystems: China has said that it will be low-carbon, green and sustainable, but it is anything but that,” he says. “New roads will still decimate forests, transport routes will still destroy biodiversity on a grand scale. China says it will follow environmental guidelines, but history has shown these protections are nonexistent.”

Despite such suspicions that most Chinese projects will barely be affected by the “greening” of the BRI, the country has not financed any new foreign coal plants under the BRI since the beginning of 2020 and many projects have been canceled or suspended, says the Finland-based Centre for Research on Energy and Clean Air (Crea).

According to a briefing paper by Crea analyst Isabella Suarez, 15 coal plants that would have produced about 12.8 gigawatts of electricity have been cancelled so far, but 18 projects with a combined capacity of 19.2 gigawatts might still proceed because the backers have already secured the permits and financing or they are tied to industrial development. “China may continue to fund or build new coal projects under the BRI because a loophole means that some projects already planned may go ahead,” she says.

Rival plan

Earlier this year, the US and other G7 countries, fearing that the BRI has enabled China to take the global geopolitical lead by financing hard infrastructure projects in poor countries, launched a rival plan that aims to invest $600bn in the next five years alone.

Details of what is called the Partnership for Global Infrastructure and Investment (PGII) are still vague. But rather than loan countries money to build roads, railways, ports and dams, early indications suggest it will try to counter China’s influence in developing countries by financing “soft” projects such as industrial-scale solar plants, a vaccine manufacturing centre in Africa and digital infrastructure linking Asia and Africa. So far, the US and EU have pledged to raise $200bn and $317bn, respectively.

For now, the PGII promises to be less likely to damage the environment than the BRI. But with geopolitical rivalry between global power blocks intense and growing, the fear is that the PGII – even with higher construction standards – will seek to rival the BRI in scale, with an inevitably massive influence on the global environment.

This article was originally published by Ensia