06.07.2021 – 09:42
* The writer is an associate professor of law at Peking University of Foreign Studies and author of ‘Law and Governance of the Asian Infrastructure Investment Bank’
Last month, US President Joe Biden urged his G7 counterparts to support a worldwide infrastructure plan to rival the China Roads and Belts Initiative (BRI). This marked the beginning of his campaign for international cooperation in the field of high-quality infrastructure, which can be seen as a scaled-down version, posted by Covid-19 of the Trump-era Blue Dot Network. However, Biden’s call yielded some concrete results.
However, the G7 meeting promised to stop using government funds to finance new international coal-fired power plants by the end of 2021. This commitment should be emphasized by BRI, which has been sharply criticized for its environmental impact from the outset. his in 2013.
Coal energy production is the single largest source of greenhouse gas emissions. If BRI were to make coal-free commitments similar to the G7, it would help meet the Paris Agreement target of keeping global temperature rising to 1.5C, as well as improve its reputation.
The Second Belt and Road Forum, held in Beijing in 2019, set out a central plan for building high-quality infrastructure that was clean and green. A commitment to no more coal would certainly help fulfill this ambition.
The coal ban would be in line with China’s promise to reach a carbon peak by 2030 and carbon neutrality by 2060. The interval between these two timelines is already short. A coal ban will force major development financiers, such as the Development Bank of China and China ExIm Bank, as well as commercial banks, to adopt best practices. This in turn will accelerate the transition to a green future for those countries that borrow from the BRI.
More than 30 major international institutions are official partners with BRI, including the United Nations, the IMF and the World Bank. These institutions prioritize international best practices. A charcoal-free BRI would help them view the initiative investments in a positive light.
According to the UN, more than 110 countries have promised carbon neutrality by 2050. A low-carbon economy represents the greatest business opportunity of our time. Those who move resolutely and quickly in that direction will benefit the most.
The BRI needs to be particularly vigilant and responsive to policy changes in multilateral development banks. For example, the European Investment Bank will cut funding for fossil energy projects (including oil, gas and coal) next year. The Asian Development Bank has not funded a coal-fired power plant since 2013 and formally banned coal 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 coal-energy ban later this year.
One hundred and forty countries have explicitly supported the BRI so far. Several Western countries, including Australia, Canada, the United Kingdom and Japan, have also chosen to take advantage of the initiative through so-called third-party market cooperation. By declaring itself charcoal-free, we can expect more countries to join this cheerleading team.
I am not suggesting that BRI has been criticized just because of the low standards around coal. It is stigmatized mainly because the US feels threatened by China’s rise. By conducting zero funding for new coal-fired power plants, BRI can reap goodwill from the west, especially from western Europe. This will help undermine Biden’s strategy to try to isolate China.
In order to make a better world for all of us, green standards need to be realistic. Asia has the richest coal deposits, representing 38 percent of world reserves. Because it is cheap and accessible to many developing countries, coal accounts for about 40 percent of energy consumption in Asia, well above the world average of 29 percent. This fact must be accepted.
A charcoal-free BRI can mean no charcoal at all, nor an immediate cessation of its use. Instead, investments in technologies “Clean coal”, such as carbon capture and storage, to make dirty coal greener, should be encouraged for existing coal-fired power plants. This will enable them to remove it gradually. And if there is to be an early coal energy pension, alternatives must be available and attractive.
In a time of growing uncertainty and destabilization, it is best to look at BRI as a new corridor for China-West cooperation. Ending the use of coal by BRI makes this possible.
Translated and adapted for Konica.al by Financial Times
