In an effort to clear up domestic pollution and meet climate agreement goals countries are outsourcing emissions and investing in coal projects abroad. A report on the global carbon trade in 2018 estimated that 25 per cent of the world’s total carbon emissions are outsourced in this way. The report calls this a “carbon loophole” and it remains a key issue of climate policy.
China, for example, has made significant strides in cutting dependence on coal domestically and leads the world in funding renewable energy projects. Yet its activities overseas tell a different story. China remains the world’s largest producer of carbon dioxide emissions and is currently investing billions in overseas coal plants through its Belt and Road Initiative (‘BRI’).
The BRI was launched by President Xi Jinping in 2013 to create corridors of economic growth and trade throughout Eurasia, Africa, and Oceania. Beijing plans to pour more than USD$900 billion into infrastructure and development projects.
At the first BRI forum in May 2017, President Xi Jinping touted the initiative as “a vision of green development and a way of life and work that is green, low-carbon, circular and sustainable.” During this time, however, China invested in an estimated 140 coal plants in countries including Egypt and Pakistan, which previously burned little to no coal.
China’s projects now account for over 40 per cent of the world’s total planned coal-fired power plants according to the Global Coal Exit List database.
A report published by Tsinghua University has analysed the potential carbon scenarios of infrastructure projects planned in BRI countries. It argues that Chinese coal plant developers are propping up the coal industry and driving overseas investments. The projects planned are set to generate emissions well above the level needed to keep global warming to 2 degrees Celcius, rendering China’s commitment to the Paris Agreement goal unattainable. If current practices continue, pollution will inevitably worsen globally.
Simon Zadek, a visiting fellow at the Tsinghua Centre argues that because of the sheer scale of the BRI "if you get the carbon wrong in a way it doesn't matter anymore what anyone else does". Currently the 126 countries involved in the BRI account for 28 per cent of man-made global emissions. The report predicts this will rise to 50 per cent by 2050.
One key driver of overseas coal projects is the tightened environmental regulations in China. Firms have responded by moving their operations overseas to countries with fewer environmental safeguards and less government transparency which are thus able to fund dirty and inefficient technologies with little consequence.
For low-income countries with infrastructure deficiencies and resource shortages, the BRI is an attractive option for development. However, advanced industrial economies are more critical of China’s growing strategic influence and the lack of safeguards.
For China, air pollution has been seen as a blight on its reputation as a major power and causes an estimated 1 million premature deaths per year. Consequently, during important political events including the Beijing Olympics and the 2014 Asia-Pacific Economic Cooperation Summit, scientists were tasked with reducing air pollution to ensure clearer skies and therefore, to present a better public image to the world. The BRI can similarly be seen as a smokescreen.
If China wants to be seen as a global green leader it needs to “apply the same environmental standards to overseas infrastructure projects as it does to its domestic projects” said the United Nations environment chief Joyce Msuya in June. Conservation and environmental impacts should not be an afterthought of projects. Such considerations need to be implemented in the planning processes.
China could use its influence and vast resources to make renewable, less carbon-intensive energy sources the norm in BRI countries. According to a report released by the International Renewable Energy Agency (IRENA), “no country has put itself in a better position to become the world’s renewable energy superpower than China”.
But China clearly has a long way to go if it is to be considered a true climate leader.
Alexandra Smith is the East Asia Fellow for Young Australians in International Affairs.