QI HANG CHEN tackles the sprawling environmental implications of China’s Belt and Road Initiative.

China’s Belt and Road Initiative (BRI) has the prerequisite elements for a massive environmental and climatic disaster. China’s pivot to green domestic policies has obscured the exportation of its environmentally damaging excesses abroad, in what is known as “shadow ecology”. While we must acknowledge China’s efforts to “green” the BRI through legal and economic frameworks, as well as the opportunities that the BRI may generate, particularly in green infrastructure and renewables, it is difficult and irresponsible to overlook its resulting environmental damage that might prove to be too much to mitigate in the future.

From an environmental perspective, the BRI is very mixed in terms of risks and benefits; there is no consensus on whether one will outweigh the other. Time is the main factor for this uncertainty. As the BRI was only proposed in 2013, much of what is part of the plan – and what is not – has yet to come. Literature on the BRI is sparse, and often not from peer-reviewed sources, subjecting the little available literature to biases, particularly those coming from within China itself. Additionally, not enough time has elapsed for studies to make meaningful and long-term conclusions. The evolving nature of the project makes it even more difficult to extrapolate into the future.

Still, it is imperative to actively consider the environmental risks and costs that are already happening due to the initiation of the BRI, as well as projected costs and risks leveraging given past environmental theories and case studies. A 2018 paper jointly published by the World Wildlife Fund and HSBC provides a useful framework for considering seven different parameters of BRI’s environmental impacts – in terms of the project’s (a) inputs, which include (1) ecosystem use, (2) water use, (3) use of other resources, and (b) outputs, which include (4) greenhouse gas (GHG) emissions, (5) non-GHG emissions, (6) water pollutants, and (7) solid waste. An eighth element that should be under consideration as well is the (8) increase in overall population in BRI corridors because of the project, that will compound upon the seven factors. The WWF-HSBC report has set out parameters beyond the conventional wisdom limited to just carbon emissions, to prime the public in thinking more broadly about the environmental impact of the BRI. While this article does not seek to analyze every single parameter, it does aim to invoke the report’s comprehensive and wide-ranging analytical approach to discussing the BRI.

Non-renewables: the short-term culprits

To begin, perhaps the most contentious element of the BRI – and most conventionally scrutinized – is the export of coal-fired power plants to under-electrified, developing BRI partners. In fact, infrastructure and development projects along the BRI will remain predominantly powered by coal-fired plants in the foreseeable future, despite China’s commitment to UN Sustainable Development Goals and the Paris Climate Accord and to a vision of a “green, healthy, intelligent and peaceful Silk Road”. These guidelines are largely non-binding and present no viable punition for a China that wishes to deviate from such a vision.

China is already the world’s largest exporter of coal-fired plants, and the BRI will only entrench this status. A Global Environmental Institute report shows that some 240 coal-fired power plants had been built along the BRI by the end of 2016. The immediate impacts are clear: the shadow ecology behind the BRI means that while China pivots sharply towards sustainable development and green, clean policies domestically, the overall perturbation to planetary systems will not decrease, and in fact, may even increase. China is merely shifting its carbon footprint to other smaller and weaker countries along the BRI, and China’s domestic efforts at going green has not translated into green investments and development abroad.

Natural gas and oil, supplementary forms of energy to coal, are also potentially problematic for the environment. One of China’s principal goals for the BRI is to ensure energy security, and its partnership with the Central Asian countries rich in oil and gas resources will mean that it can transport its energy more safely without being vulnerable to controversies in the South China Sea and U.S. hegemony in the area. The building of pipelines in Central Asia has already had effects on local environment; the North Caspian Operating Company, for example, had to replace its pipelines in 2014 due to leaks. China’s BRI has not represented any substantive decoupling from non-renewable energy resources; import of Russian crude oil has doubled from 2012 to 2017.

Renewables: not a silver bullet

While the opening of coal-fired plants abroad will be the center of controversy, other forms of energy will also have significant environmental impacts. Even renewable energy resources, such as hydroelectric, solar, and wind power, have consequences as well. Hydroelectric energy generation will disrupt aquatic ecosystems, divert rivers, change flows and distribution of water resources, and force relocations. The BRI is already seeing impacts in the Mekong Delta, where dam investments are putting potentially 64 species in danger.

The production of solar panels is also known for its highly toxic discharge. The perturbations to biotic systems along the BRI from an environmental science perspective seems inevitable. It is merely a matter of how to minimize it, or to make net environmental gains in the long run. To make matters worse, solar and wind power, with their relatively low environmental costs, are also sidelined within the BRI with limited commitment and attention. Once again, this reflects the disconnect between green domestic policies in China and a lack of commitment to hard environmental regulations abroad; China is actually the world’s largest manufacturer of wind turbines and solar panels, but this has not translated into commitment to solar and wind power in the BRI. In the short run, there is unlikely to be a dramatic pivot from coal power to more low-impact renewables.

Hidden feedback loops

The BRI has some serious hidden side effects that might be amplified through feedback loops. For one, the increase in economic activities along the BRI will on its own result in faster depletion of available water resources, and the increase in population engendered by prospective economic booms will further exacerbate water scarcity. This is in particular a very real threat in the first stage of the BRI – the Central Asian corridor. Kazakhstan and Mongolia, China’s immediate neighbors, and two important allies in the BRI, are located in an arid geographic region which cannot sustainably support massive increases in water use, be it for manufacturing and production, energy generation, or human consumption. Many of these activities will also pollute existing water resources beyond the point of sanitary and safe human consumption and support for local ecosystems. This will be particularly problematic from a population perspective – there are already 3 billion people living along the BRI and with the expected economic boom, the number will only increase. Depletion of water resources can also have larger impacts, such as the change in regional climate, diminution of natural habitats, and the disruption of local ecosystems and biodiversity.

Apart from environmental impacts specific to localities, the BRI has systemic environmental impacts as well that might also be potentially amplified through positive feedback loops. With increased economic activities comes an increased carbon footprint as studies have shown that there exists a direct correlation between economic growth and carbon dioxide emissions into the atmosphere. One mechanism in which this relationship manifests in is the transportation of goods and services, specifically in emissions from shipping and land transport. Cement production, a key step in the massive infrastructure development scheme that is the BRI, produces large quantities of toxic waste, greenhouse gases, toxic gases, and also requires large amounts of water resources and energy, presumably generated by coal-fired plants. Another mechanism is that with economic growth, consumption of goods and services increase, which results in a larger carbon footprint.

Defying conventional wisdom

Some, however, have argued that based on the Environmental Kuznets Curve (EKC), the initial degradation of the environment due to economic growth will be mitigated by future economic growth and development in scientific and technological innovations. Within the environmental scientific community, there is no consensus on whether the EKC will hold true for the BRI, or in general at all, for that matter. As previously discussed, economic growth is positively correlated with environmental degradation, and whether or not the innovations that come along with growth can mitigate the increase in consumption, production and pollution, is unknown. For this reason, there is much anxiety, ambivalence, and ambiguity about the current impacts and future environmental consequences of the BRI.

It should also be noted here that the within the environmental science discipline, using carbon dioxide emissions as a proxy for measuring environmental degradation has become almost a predominant paradigm. Discourse, at the very least those on the BRI, tends to have a much more diverse set of dependent variables. For example, disruption of natural habitats and local ecosystems, loss of biodiversity, over-extraction of water resources, land erosion, are also negative perturbations to planetary systems that are equally important foci and have been given the appropriate concern and attention. Much attention in recent years, for example, has been given to endangered species threatened by the BRI, such as the Amur Tiger and the Far Eastern Leopards, whose natural habitats are being increasingly fragmented by the construction of railway corridors between China’s Rust Belt in the Northeast and Siberia.

Opportunities abound? China’s will and might

What is certain though, is that risks and benefits will both exist, even if prospects might seem grim in the short run. Potential areas for environmental protection and improvement include sustainable energy infrastructure particularly in solar and wind, better transportation infrastructure, transfer of sustainable development technologies and further development of green financing, as well as increased economic wealth that can facilitate transitions into green education, policies and economies.

China’s potential in engendering change is undeniable. Its four major state-owned commercial banks account for 83% of BRI’s financing, while state-owned enterprises (SOEs) account for 52% of construction. Chinese SOEs have great influence and sway over the type of environmental standards to be upheld in BRI projects. Furthermore, China has also shown not merely the capacity to act but also the willingness to act. It is well within Chinese interests to start acting like a global leader on environmental and climate sustainability, to remain not only accountable to its beleaguered domestic population, but also an international community from whom China needs lasting support and adoration from. Since the 2011’s Twelfth Five-Year Plan, China has fully integrated low-carbon and low-pollution strategies into its core economic plan. Chinese leaders prioritize domestic sustainable development to significant results, having already hit 2020 emissions reduction target of 46%.

China has voiced strong commitment to international standards, like the Paris Agreements and the UN Sustainable Development Goals. President Xi has also emphasized sustainability and co-prosperity as the key tenets of BRI at the 2017 Belt and Road Forum. China has begun to concretize rhetoric in policy, partially driven by economic interests and international leadership ambitions. In recent years, renewable energy has become more than a normative cause for China, but also a nascent driver of economic growth. By 2012, China accounts for manufacturing 71.4% of the global photovoltaic cell supply, having exported US$8 trillion in solar equipment, partially through the BRI. China has also accounted for some 50% of global solar energy demand. These numbers will only increase as China seeks to further dominate and profit the sunrise industry. China was the largest issuer of green bonds in 2016, directing some US$11.2 billion in funding to sustainable infrastructure development and renewables development, particularly in solar and wind.

Greening the BRI: ESG investments and green finance

In recent years, China has placed greater emphasis on ESG– environmental, social and governance – factors within BRI projects. The goals are to reduce costs and identify, value, and de-risk investments, ensuring greater commercial viability for partner countries in the long run. With stringent ESG considerations, BRI infrastructure projects in ASEAN can achieve better bankability for investors and host countries alike. Myanmar’s US$3.6 billion Myitsone Dam, for example, was shut down in 2011 due to backlash over environmental and social concerns, incurring a loss of US$800 million for Chinese stakeholders, and costing Myanmar a renewable energy source, US$18 billion in potential, and in forcible relocations and disruptions to water and ecosystems.

The incentives for China to commit to green finance and sustainable development along the BRI are clear – and the incentives are not only Chinese economic benefits, but also to avoid environmental disasters in partner countries with weaker environmental regulations. As a framework meant to increase Chinese reach through the expansion of its soft power and positive influence and image, the BRI becomes immediately self-defeating should smaller, emerging partners along the BRI be environmentally damaged – or at least perceptibly reaping more harm than good.

We should sound the alarms on the BRI in the short run, due to the current risks and negative impacts on the environment and climate – and trendlines are indeed worrying. Economics and local domestic needs of BRI partners mean that in the short run, expansion of coal-fired power plants and other damaging technologies will not reverse course. The BRI, however, has also great potential for good. We do not know if these future benefits will outweigh the current risks and costs, or if China will continue signaling goodwill and intent to green the BRI, or go beyond signaling to establishing concrete legal and economic frameworks. What we must not do fundamentally, is to discourage China from doing so – by dismissing the green policy efforts of a rising power concerned with its increasingly negative image as paying mere lip service.

Qi Hang can be contacted at qihang@u.yale-nus.edu.sg.