The writer is associate professor of law at Beijing Foreign Studies University and author of ‘The Law and Governance of the Asian Infrastructure Investment Bank’
Last month, US President Joe Biden asked his G7 counterparts to back a worldwide infrastructure plan to rival China’s Belt and Road Initiative (BRI). This marked the beginning of his campaign for international co-operation in the area of high quality infrastructure, which may be viewed as a scaled-up, post Covid-19 version of the Trump-era Blue Dot Network. Nevertheless, Biden’s call produced few concrete results.
The G7 meeting did, however, promise to stop using government funds to finance new international coal power plants by the end of 2021. This commitment should be noted by the BRI, which has been severely criticised for its impact on the environment since its launch in 2013.
Coal power generation is the single biggest source of greenhouse gas emissions. If BRI made coal-free commitments similar to the G7, it would help meet the Paris Agreement target of keeping global temperature rises at 1.5C, as well as improve its own reputation.
The Second Belt and Road Forum, held in Beijing in 2019, set out a central plank of constructing high quality infrastructure that was both clean and green. A commitment of no more coal would surely help in fulfilling this ambition.
Banning coal would be consistent with China’s pledge of reaching a carbon peak by 2030 and carbon neutrality by 2060. The interval between these two timelines is already short. A coal ban would force major development financiers, such as the China Development Bank and China ExIm Bank as well as commercial banks, to adopt best practices. This in turn would accelerate the transition to a green future for those countries that borrow from BRI.
More than 30 major international institutions are official partners with BRI, including the United Nations, the IMF and the World Bank. These institutions prioritise international best practices. A coal-free BRI would help them to view the initiative’s investments in a positive light.
According to the UN, more than 110 countries have pledged carbon neutrality by 2050. A low-carbon economy represents the greatest business opportunity of our time. Those who move resolutely and fast in that direction will benefit the most.
The BRI should be particularly watchful of, and responsive to, the policy changes at multilateral development banks. For example, the European Investment Bank will stop financing fossil fuel energy projects (including oil, gas and coal) next year. The Asian Development Bank has not funded a coal power plant since 2013, and banned coal formally in an energy policy proposal last May. The Asian Infrastructure Investment Bank is following the same path, and is expected to update its energy strategy with a ban on coal power later this year.
One hundred and forty countries have expressly endorsed BRI so far. Even some western countries, including Australia, Canada, the UK and Japan, have chosen to benefit from the initiative through the so-called third-party market co-operation. By declaring itself coal free, we might expect more countries to join this cheering squad.
I am not suggesting that BRI has been criticised solely because of its low standards around coal. It is stigmatised mainly because the US feels threatened by China’s rise. By committing zero funding for new coal power plants, BRI can harvest good will from the west, in particular from western Europe. This will help undermine Biden’s strategy of trying to isolate China.
In order to make a better world for all of us, green standards must be realistic. Asia has the richest coal deposits, representing 38 per cent of world reserves. As it is cheap and accessible for many developing countries, coal constitutes some 40 per cent of energy consumption in Asia, much higher than the world average of 29 per cent. This fact must be acknowledged.
A coal-free BRI cannot mean no coal at all, nor an immediate cessation in its use. Instead, investments into “clean coal” technologies, such as carbon capture and storage, to make the dirty coal greener, should be encouraged for existing coal-power plants. This will enable them to phase it out gradually. And if there is to be an early coal-power retirement, alternatives must be available and attractive.
At a time of ever-increasing uncertainty and destabilisation, it is best to view BRI as a new corridor for China-west co-operation. Ending BRI’s use of coal makes this possible.
Source: Economy - ft.com
