Summary -  How can China's Belt & Road Initiative ('BRI') support rather than negate efforts to tackle global climate change? Why is this important and why has the BRI been singled out? It is because of the size & potential of the BRI, which currently includes 140 countries, companies & organisations. Without these BRI projects being environmentally sustainable, the opportunity to successfully tackle global climate change may well be lost. To answer this challenging dilemma, expert speaker, Jinny Yan, (Managing Director & Chief China Economist for ICBC Standard Bank) talked about the benefits of the Belt & Road Green Finance Index. This index has compiled data sets about countries which can help investors evaluate whether a project will be environmentally sustainable. Although attached to the country rather than the merits of a project this is an excellent starting framework to avoid projects which are more likely to undermine tackling climate change. The index showed that countries in the Asia Pacific & Eastern Europe are best placed to implement environmentally sustainable projects because of more stringent governance. Brian O’Callaghan, (Consultant to the Robertson Foundation, & on leave of absence from the Boston Consulting Group) highlighted that in the post covid19 era, climate positive spending supports short term economic growth. This was reinforced by a survey of 230 leading economists globally who identified clean energy R & D, healthcare, interconnectivity and public transport as areas that support having a green BRI as well as producing best results for investors & avoiding stranded assets, such as coal projects. Alex Clark, (Consultant to the Climate Policy Initiative and the Center on Global Energy Policy (CGEP) at Columbia University) reiterated that having a green BRI was critical to upholding the Paris Climate Agreement and the only route which made sense to potential investors. He felt that there was little evidence of ‘debt trapped diplomacy’ by China, and that many coal projects financed by Chinese banks had often been initiated by host countries rather than China. All speakers agreed the 14th China Five Year plan included many laudable aims, but could the rhetoric be translated into reality? Alex stated that although domestically China has recently been building more coal plants, outside China many countries were cancelling coal powered electricity generation projects. Alex & Jinny expressed the challenge of extricating finance and support for coal powered projects when jobs were at stake. Brian pointed out that China has recognised the comparative advantage of embracing low carbon technologies, particularly hydrogen in the aviation sector and that China is the largest investor in renewable energy. Jinny stated that although China’s targets in support of the Paris Climate Agreements were between 20%-30% electricity generation from renewables this would not necessarily cover BRI projects. Brian felt establishing an institution to guide & monitor these projects was a long way off, but all speakers felt some overarching body would need to be formed if the Paris Climate Agreement targets were to have any chance of success. Author: Theresa Booth 14 August 2020 

Jinny Yan is Managing Director & Chief China Economist for ICBC Standard Bank. Jinny is an experienced China Economist and China product specialist with a demonstrated history of working across client-facing roles of the banking industry. Her work focuses on China macro, fixed income markets, and she initiated the BRI Indices at the Bank in 2017. Jinny is an experienced speaker in the media and at large conferences.  

Alex Clark is a DPhil candidate in the School of Geography and the Environment, where his research focuses on the identification and transmission of fossil-fuel related stranded asset risks in the public sector, and how governments and their agents should respond to these risks.  Alex is a Consultant to the Climate Policy Initiative and the Center on Global Energy Policy (CGEP) at Columbia University.

Brian O’Callaghan is a DPhil (PhD) student at the Smith School for Enterprise and the Environment, the University of Oxford. He is also a Consultant for the Robertson Foundation and on a leave of absence from the Boston Consulting Group. Brian is an Australian Rhodes Scholar. 

Chair: Theresa Booth - Joint CEO Chopsticks Club