"A Decade of Environmental Change", 26 September 2023 in Global China Pulse, Volume 2, Issue 1, 2023

...As the BRI marks its tenth anniversary this year, it is crucial to examine the initiative’s environmental consequences, considering both positive and negative impacts...In this commentary, we explore the changes in BRI financing trends and their environmental implications, the evolution of BRI environmental regulations, and efforts towards a greener BRI.

Changes in BRI Investment Trends and Environmental Impact

...Based on existing research (Ascensão et al. 2018), the BRI’s environmental impacts can be divided into the following:

1. impacts on the atmosphere, such as contribution to greenhouse gas emissions and air pollution through direct and indirect fossil fuel consumption for infrastructure development;
2. impacts on the biosphere, such as harm to biodiversity and deforestation from land-use change caused by physically large projects;
3. impacts on the hydrosphere, such as water pollution and depletion of water resources;
4. impacts on the human sphere, such as potential risks to Indigenous lands, community relocation and compensation, and labour relations.

The magnitude of the BRI’s environmental impacts has been driven by the scale of China’s overseas infrastructure financing...In 2020–21, the Boston University Global Development Policy Center’s Chinese Overseas Development Finance (CODF) Database recorded 28 loan commitments for a total value of 10.5 billion USD—the lowest level in recent years.

Along with the changing trends in the scale and scope of development finance supporting the BRI are shifts in project size, monetary value, and geographic footprint—emblematic of a more recent ‘small is beautiful’ approach...

The decreasing physical footprint has implications for the environment. In the most recent phase of the BRI (2018–21), the geographic footprint of projects supported by Chinese development finance has become less likely to overlap with sensitive territories. In this period, 66 per cent of project finance had no overlaps with critical habitats, Indigenous peoples’ lands, or national protected areas...

Evolution of BRI Environmental Regulations

Policies to regulate the BRI’s environmental impacts have also evolved over time. China’s regulatory approach for overseas investments shifted from ex-ante review to management of the overall outbound investment process, inclusive of interim and ex-post monitoring and supervision, providing more channels for assessing environmental impacts in project and Initiative-level assessments...

However, program evaluation is in its infancy for most BRI projects and the investment review process largely relies on self-disclosure by Chinese firms...

until recently, the Chinese authorities’ environmental policies governing domestic investments were more stringent than those regulating overseas investments. Environmental policies on BRI investment are mostly voluntary as long as firms comply with host-country regulations...

Towards a Green BRI

...recent policy announcements underscore the Chinese Government’s growing commitment to greening the BRI, starting with the energy sector.

...Official guidance in March 2022 added specificity to the announcement and the types of clean energy to be supported, showing promise for how China could play a more constructive role in host countries’ efforts to achieve sustainable development...