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Moving the Green Belt and Road Initiative: From Words to Actions

China’s Belt and Road Initiative (BRI) is investing in projects developing infrastructure worth $6 trillion across many of the world’s fastest-growing economies. The Chinese government has taken initial steps to incorporate environmentally sustainable, or green, strategies and objectives into the BRI. However, our review finds that most bank loans and cross-border investments in energy and transportation over 2014-2017 were tied to fossil fuel projects.

Aligning these investments with Nationally Determined Contribution plans expressed by BRI countries provides a massive opportunity for financing low-carbon development. We provide guidance on how this might be done, as well as suggestions for countries that could make it easier to facilitate low-carbon investments in their economies.

Key Findings

Executive Summary

  • Since the Chinese government proposed the Belt and Road Initiative (BRI) in 2013, Chinese investments have been increasing rapidly in the BRI countries. The trend will likely continue, supported by the Chinese government’s 2017 pledge of US$113 billion in special funds for investments in BRI.
  • The Chinese government has taken initial steps to incorporate environmentally sustainable, or green, strategies and objectives into BRI, but in very highlevel and conceptual terms.
  • This report provides an initial overview of the degree to which Chinese energy and transportation investments in the BRI countries from 2014 to 2017 align with the green priorities communicated in BRI countries’ Nationally Determined Contributions (NDCs). Our analysis is based on a comprehensive review of data on bank loans and cross-border investments by the Silk Road Fund and Chinese enterprises.
  • The data show that most Chinese deals in energy and transportation over the period reviewed were tied to carbon-intensive sectors and did not show a strong alignment with the low-carbon priorities included in the BRI countries’ NDCs.
  • Under the Paris Agreement, countries will be submitting revised NDCs in 2020, with a view to introducing greater ambition. BRI countries would benefit from updating their NDCs with sufficient granularity to provide clear signals to investors to enable a comprehensive assessment of investment needs.

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