May 3, 2019
By Jackson Ewing, Duke University
Last week leaders from around the world gathered in Beijing to discuss the future of China’s sprawling Belt and Road Initiative (BRI). The BRI’s mix of mystery and ambition make it a Rorschach test for evaluating international development trends and China’s international position. It is at once a vague umbrella covering dissimilar development projects that may have occurred anyway, and the most ambitious infrastructure program since the end of World War II – if not ever – which seeks nothing less than to connect the world.
Such ambition, regardless of the lens used, has inescapable environmental consequences. Road and rail will be built to connect people and markets, with impacts on biodiversity and ecological services that vary vastly across different projects. Chinese investment will lock in decades of coal pollution, create complex environmental tradeoffs in the hydro sector, and amplify renewable energy deployment – all at the same time. Shifting flows of goods will both open up more efficient consumption options and create new opportunities for resource plunder and environmental decline. Details.
April 15, 2019
By Jackson Ewing, Duke University
When blackouts roiled Pakistan in 2014-15, China stepped in to help the country build a coal sector from scratch.
At the time, Pakistan generated less than 1 percent of its electricity from coal. As part of its Belt and Road Initiative (BRI), China now steers major coal investment through the China-Pakistan Economic Corridor, which plans to grow Pakistan’s coal production from 190 to 15,300 megawatts. This will help Pakistan meet its electricity needs and fuel the development that follows. It may also lead to Pakistan’s greenhouse gas emissions quadrupling between 2015 and 2030.
Pakistan is no outlier. The International Energy Agency just reported strong greenhouse gas growth from energy production in 2018, with an emerging fleet of Asian coal-fired power plants leading the way.
Coal plants are being planned or constructed in 14 countries with no current coal power to speak of, and in 19 countries where new coal plants would more than double coal-fired capacity. These plants could bring more than 860 gigawatts of new capacity online in the next 15 years, and risk putting global climate targets truly out of reach.
While there are multiple drivers of coal investment, China is the pivotal player.
As its massive domestic coal sector is squeezed by a saturation of existing plants, economic transitions away from heavy industry and a ‘war on pollution,’ China’s powerful state-owned companies look abroad. The Shanghai Electric Group will build coal plants in Egypt, Pakistan and Iran with a combined capacity of 6,285 megawatts; that is nearly tenfold its planned constructions in China. The China Energy Engineering Corporation has no plans to build at home, but is constructing 2,200 megawatts of capacity in Vietnam and Malawi. Like Pakistan, the nascent coal sector in Malawi is being built essentially from zero.
Meanwhile, the China’s public Development Bank and Export-Import Bank have provided more than $43 billion in overseas coal financing since 2000. Other Chinese banks underwrite nearly 73 percent of global coal plant development. Eleven of the world’s 20 largest coal developers are Chinese, and firms are involved across project contracting, equipment export, equity, construction and direct bank loans.
The implications are clear: Coal plants help meet immediate electricity needs, but threaten to lock-in decades of conventional air pollution that will accelerate health care demands and have rippling direct and indirect social costs. Details.
A saying I have encountered several times since arriving in China is 要想富先修路 (yào xiǎng fù, xiān xiū lù). Roughly: if you want to get rich, first build a road.
While the proverb has broader implications—namely, that finding or creating the means to access opportunity is the first step toward achieving future success—it also reflects China’s recent trajectory in a more literal sense. The country’s dramatic economic growth over the past 50 years has been fueled in significant part by massive infrastructure and building investments domestically, as well as growth in the industrial sectors that produce the raw materials of this construction: steel, concrete, aluminum and more. But as the need for these new projects has slowed in China, production capacity in these industries has outstripped domestic demand.
To keep getting rich, then, perhaps one might build a road somewhere else. Many Chinese construction companies have turned to opportunities abroad in recent decades and are entering new markets at a rapid pace, seeking buyers for their products, accumulated expertise and raw materials. China is, of course, not the only country whose domestic firms have turned outward into the world, making forays into new markets far beyond their home borders—U.S., European and Japanese companies (among others) have been doing so for decades longer, operating cumulatively in far greater volumes of investment capital. But the speed of China’s entry into the realm of outward foreign direct investment (OFDI) has been unusually rapid, which has in turn created some problems for both Chinese companies and Chinese lending institutions (not to mention reports of problems in some of the countries receiving investment). The unusually close relationship between the Chinese state and many of China’s largest companies, as well as some other relatively unique features of China’s economic and political systems, have also made the country’s growing presence on the global OFDI stage a widely watched development, both by traditional FDI lenders and by countries where investments are taking place. Details.
The foundation of any meaningful and responsible attempt to influence the outcomes of a situation must be, first, to listen: to earnestly try to understand the bigger picture, in all its messy complexity, rather than charging forward to act on assumptions that don’t fully reflect reality. It’s not possible to care about factors we aren’t aware of, much less to correctly assess their weight compared to other issues. It is ironically easy, as an expert in any field, to miss critical pieces of knowledge that fall outside ones own specialization, and therefore develop a skewed view of what a good solution looks like.
The two days of panel sessions and talks at the start of the 5-day event provided an incredible overview of the different angles from which researchers, government officials, consultants, activists, business owners, students, and others see the tangled policy and scientific issues linked to environmental and social responsibility in project-level economic planning. It also laid the foundation to help each group understand the needs of the others and to start thinking about solutions to bridge those gaps. Panel sessions brought American experts in satellite mapping face to face with pollution activists and scholars from Kazakhstan. It allowed top consultants in country-level economic strategy to learn from biologists and political scientists. It enabled a high-ranking representative from the Chinese National Development and Reform Commission to directly hear from, and ask questions to, civil society organizers who advocate for the rights of communities closest to major development projects. Details .
A single weekend of shared perspectives is an important start to broadening stakeholders’ awareness of perspectives beyond their own—perhaps enough to help some decision makers and researchers who attended ask new kinds of questions as they embark upon their next project. But one meeting of minds alone is not enough. Truly sharing knowledge between sectors has to involve ongoing relationships and meaningful channels to keep communication open in the longer term.
The final three days of the event, in recognition of this, were an attempt to make sure that some of the conversations started over the weekend do continue into the future—and can be effectively directed toward the policy makers and others who most need to hear them. This workshop focused its efforts on the increasingly detailed sets of environmental and economic mapping data that researchers across different sectors of the stakeholder community have developed. A primary goal was to develop a shared sense of what kind of information is available, of who was working on what, and how to best coordinate the international efforts to get this information to the places it will do the most good.
In discussions of both global economics and international security, the health of the natural environment tends to take a back seat, as if it were only a secondary concern after the “real” business is settled. But all human plans and achievements depend on environmental factors. These include breathable air and accessible clean water, soil healthy enough to produce food, and forests and seas able to harbor diverse animals and plants that keep one another in a healthy, thriving balance. Policymakers and pundits focused on growth and geopolitics tend to take the natural capital of the world for granted, though it is the foundation and the raw material of all other economic activity. Details.