China is more assertive than ever about its climate leadership ambitions, as 195 countries head to Bonn for the annual UN summit.
At a five-yearly party congress in mid-October, president Xi Jinping for the first time spelled out China’s ambition to take up “the driving seat” of international debate on climate change.
Many are looking to the world’s biggest emitter to fill the leadership role that Donald Trump’s US has vacated. Chinese officials take pride in the country’s contribution to cementing the Paris climate accord and its shift towards less carbon-intensive growth.
“Xi’s high profile announcement at the party congress, the most important political gathering, effectively ends domestic debates about whether China should step up,” says Greenpeace senior advisor Li Shuo.
Yet the country’s biggest influence over global affairs comes with its trillion-dollar overseas investment plan, known as “belt and road”. This has a huge carbon footprint, experts warn.
Hailed by Xi as the “project of the century”, the strategy spans 69 countries, rolling out infrastructure that could make or break the Paris agreement.
“Leadership is not self claimed. People will look at what you do, both domestically and internationally. China has indeed made great endeavors to decarbonise its economy at home,” says Wu Changhua, China/Asia director for Jeremy Rifkin Office.
”Internationally, however, this contradiction between overseas climate footprint and the leadership rhetoric is yet to be recognised by Chinese officials and investors.”
At a belt and road summit in May, Xi promised to stick to the concept of “green development” and establish “an international coalition for green development”. Several ministries – including environment, foreign affairs, commerce and national development and reform commissions – in May issued guidance for the “green belt and road initiative”.
Liu Youbin, a spokesperson for the environmental ministry, said on Tuesday the ministry was guiding Chinese enterprises to “abide by local environmental regulations at host countries” for the belt and road projects. Some Chinese companies are adopting stricter environmental standards than requested by local law, he added.
But so far, in government’s grand plan for the belt and road initiative, there are few guidelines for Chinese investors and enterprises to follow in terms of projects’ climate impact, according to Yang Fuqiang, a senior adviser on climate and energy with the Natural Resources Defense Council’s China program.
“The investment in coal-fired power plants is so intensive in some countries, for instance Pakistan, that might even jeopardize the 2 degree limit of temperature rise set in the Paris Agreement,” says Yang.
In 2016 alone, state-backed China Development Bank, Export-Import Bank of China and China Silk Road Fund financed over $4 billion worth of overseas coal projects, according to data collected by NRDC. That accounts for half of the foreign coal investment by G20 countries.
Statistics by Global Environment Institute (GEI) show Chinese investment in overseas coal projects surged between 2013 and 2015, filling a gap left by western institutions such as the World Bank.
That is because Chinese lenders are still very much focusing their risk analysis on credit, market and compliance, while paying insufficient attention to social and environmental risks, says Bai Yunwen, a researcher with Greenovation Hub, a Chinese environmental group.
There is a risk of Chinese companies exporting excessive or obsolete production capacity, adds Yang, giving the example of a cement plant China built in Kazakhstan using outdated technology.
Bonn COP23 climate talks
When? 6-17 November, 2017
Where? Bonn, Germany
What? A meeting of 197 parties to the UN Framework Convention on Climate Change, where the implementation of the Paris climate agreement will be the major point of negotiations.
Not just Donald Trump news! Climate Home will be taking its biggest ever team to the talks.
China itself has paid a heavy environmental price for fossil-fuelled growth. The government is making painful efforts to address pollution problems and it may be decades before the country’s air, water and soil quality is fully restored.
“Chinese government says it is taking a shorter time to clean up the messes than many industrialized countries,” says Yang. “Now the question is: could China help other developing countries cut the cleanup period even more through this belt and road initiative?”
Bearing that in mind, 16 Chinese and overseas environmental groups – including Greenovation Hub and NRDC – have built up a coalition to research the climate impact of the belt and road initiative. They intend to develop policy recommendations for government bodies, such as the banking regulator, and businesses.
The aim is to align belt and road projects with each host country’s national targets and ultimately with the 2C global warming limit agreed in Paris, says Yang.
Greenovation Hub’s Guo Hongyu adds that the group is evaluating each host country’s investment opportunities in renewable energy sources, to encourage investors to shift their focus away from coal.