The Belt-and-Road Initiative (BRI) has reached the ripe old age of 10 this month. Those 10 years have seen a lot of change, including on topics like the relative focus on clean energy versus fossil fuels and the interest in and incentives for applying ESG criteria to BRI investments. Today we are joined by frequent guest and longtime friend of the pod, Professor Christoph Nedopil-Wang. This year he became the Director Griffith Asia Institute and is also Professor at Griffith University in Brisbane, Australia. Previously, he was Associate Professor and Director of the Green Finance & Development Center, Fudan University. He previous worked in Beijing at the International Institute of Green Finance (IIGF), as well as at GIZ.
Cheat sheet:
- Q: Was the 1H 2023 really the greenest ever, as Reuters summarized? (A: Reuters focused on energy sector, where change most evident, though oil & gas investments are big and lumpy, so can't just look at 1H. "Small and beautiful" green investments becoming more common.)
- Q: Is energy becoming greener just because fossils falling, but renewables not picking up as much? (A: Both declining coal share and growing renewables, but renewables need much stronger growth.)
- Q: Why is state-owned sector declining and private sector going up? Is that due to SOEs focusing on domestic investment to respond to downturn? (A: Perhaps, but also because private firms now much stronger, and battery-related giants investing in big projects.)
- Q: What about mining for battery materials, is there more investment in value-creating parts of that supply chain in Africa, or is it all being processed elsewhere? (A: Yes, but need to be cautious on environmental impact of local processing and whether local firms or communities actually capture value.)
- Q: What is the situation with Chinese basic ESG principles (disclosure, community involvement) being applied on the BRI, as opposed to just meeting minimum local standards? (A: Not so good, for the power sector case studies they looked at.)
For further reading:
Christoph Nedopil Wang, ‘China Belt and Road Initiative (BRI) Investment Report 2023 H1,’ Green Finance & Development Center, Fudan University, 1 August 2023, at https://greenfdc.org/china-belt-and-road-initiative-bri-investment-report-2023-h1/
Cecilia Springer et al., ‘Elevating ESG: Empirical lessons on environmental and social governance implementation of Chinese projects in Africa,’ Boston University, 30 August 2023, at https://www.bu.edu/gdp/2023/08/30/elevating-esg-empirical-lessons-on-environmental-social-and-governance-implementation-of-chinese-projects-in-africa/
Andrew Hayley, 'China's Belt and Road energy projects set for "greenest" year, research shows,' Reuters, 2 August 2023, at https://www.reuters.com/business/energy/chinas-belt-road-energy-projects-set-greenest-year-research-2023-08-02/
Environment China