Going Green is just good business for China’s Belt and Road Initiative
Though green standards are not a specific goal of the BRI, the Chinese state-owned companies undertaking many of the initiative’s construction projects have several incentives to limit their environmental impact
Written by Quartz Creative on behalf of HSBC
Though green standards are not a specific goal of the BRI, the Chinese state-owned companies undertaking many of the initiative’s construction projects have several incentives to limit their environmental impact.
The most important incentive, according to Joshua Yau, a Hong Kong-based strategist at PwC who specializes in the BRI, is simply that pursuing green practices makes good business sense, especially as the world awakens to the imperative to reduce greenhouse gas emissions following the Paris Accords of 2015.
China’s own energy market is rapidly shifting towards renewables, says Yau, and BRI projects can provide Chinese companies with an incentive to invest in and eventually acquire advanced green technologies in some of the BRI’s more developed countries, like Germany and Australia. Those technologies can in turn be rolled out domestically to meet aggressive new environmental standards enshrined in China’s 13th Five-Year Plan, which covers the period until 2020. Chinese companies can then implement the technologies in other BRI countries.
Yau also retains hope that stakeholder organizations like the World Bank – as well as the Asian Infrastructure Investment Bank, which is expected to establish standards comparable to the World Bank’s for their environmental assessments – could provide financial incentives, grants, or guarantees to ensure that BRI projects be developed sustainably.
“The world is changing,” says Yau. “China itself, domestically, is very much leading the world in renewable energy investments. So in the future they might hold up standards for other people.”
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