China’s Belt and Road Initiative and Sustainability: A Driving Force for Change and a Missed Opportunity?

The COP29 climate summit has been overshadowed by serious concerns that Trump's victory in the US presidential elections would hinder progress in battling climate change. Although the US is the world’s second-largest emitter and the key actor in the transition from fossil fuels, China remains the world's largest emitter whose actions and commitments will significantly impact the trajectory of international efforts to mitigate climate change.

My recent article, 'The Belt and Road Initiative and Sustainability: A Driving Force for Change and a Missed Opportunity?,' published in the Chinese Journal of Environmental Law, discusses the implications of China's Belt and Road Initiative (BRI) on global sustainability.

The BRI has a significant impact on climate. Countries participating in the BRI account for nearly 50% of global energy consumption, 75% of the world's population, and over 50% of global GDP. Most BRI states exhibit a pattern of extensive economic growth, leading to considerably higher energy and water consumption, as well as carbon emissions, compared to the global average. Projections indicate that if BRI countries continue their carbon-intensive development, it could lead to a nearly 3-degree Celsius increase in global temperatures, even if other regions meet the 2-degree target. The same source also argues that the BRI states could be responsible for up to 66% of worldwide carbon emissions by 2050, even if non-BRI nations achieve the Paris Agreement targets.

Given the BRI's impact on the climate, a crucial question is how the initiative addresses global sustainability challenges, particularly climate change, and what factors can compromise the BRI's ability to effectively contribute to global climate efforts.

Until recently, China—the BRI’s engineer and key driver—prioritized economic growth while paying less attention to global warming. However, China's approach to climate has evolved by incorporating a 'green' dimension into the BRI. Beijing has re-branded the BRI as 'green' and introduced a series of policies promoting the Green BRI concept. The Green BRI aims to address two crucial issues. First, it provides funding for infrastructure in the developing world without imposing external regulatory conditions, thereby upholding national sovereignty. Second, it claims to integrate green development and environmental protection into every aspect of BRI cooperation among participating states.

Based on a thorough examination of the Green BRI's policies and the case study of BRI projects in Central Asia, I argue that while the Green BRI seems to support China's climate leadership aspirations and has the potential to drive sustainability globally, it has not yet achieved meaningful change. The main reason for the Green BRI’s limited effect on global climate efforts is its reliance on a 'host country standard'—BRI states’ domestic regulations.  

In contrast, the European Union (EU) has sought to extend its sustainability-related legislation beyond jurisdictional borders to encourage (or force) companies in other countries to become more sustainable. Recent ground-breaking extraterritorial corporate regulations, including the Corporate Sustainability Due Diligence Directive and the Corporate Sustainability Reporting Directive, have an explicit and unprecedented extraterritorial reach. While the EU seeks to promote more sustainable business practices beyond its borders, the extraterritoriality of the EU domestic law raises concerns among developing economies perceiving such extraterritorial application as 'climate colonialism.'

On the other hand, the BRI's flexible legal approach, combined with a significant shortfall in infrastructure financing in the developing world, has generated strong appeal among developing countries. Yet, the “host country standard” enables Chinese investors to lower compliance costs by adhering to less stringent environmental regulations, leading to a so-called 'pollution haven effect'. Economies participating in the BRI are often smaller than China and, as a result, have limited bargaining power. Chinese companies invest in countries with emerging environmental laws and very few other international players. They frequently operate through locally registered private companies with minimal public reporting obligations and regulatory burdens, allowing them to avoid disclosure and potentially exacerbate climate externalities. From this viewpoint, the BRI becomes a hierarchical structure, not an equal partnership, perpetuating a 'race to the bottom.'

There are three key takeaways for global climate efforts:

First, despite China's Green BRI rhetoric, the Green BRI has not yet achieved substantial sustainability impacts. The reliance on the 'host country standards,' where domestic regulations govern project implementation, often results in inconsistent environmental practices, regulatory loopholes, and a lack of robust accountability.

Second, the BRI's project-based nature limits its normative influence on environmental standards and its potential as a transformative force in global sustainability efforts. For China to emerge as a genuine climate leader, it has to address the BRI's regulatory shortcomings and implement more binding environmental safeguards to align BRI projects with international climate goals and avoid greenwashing.

Finally, the BRI underscores a significant shift in international development frameworks as emerging powers like China might leverage their initiatives to redefine global norms. Since the BRI’s climate and environmental objectives risk falling short, there is a clear call for strengthened legal frameworks to regulate climate and other sustainability considerations in large-scale transnational projects.

The author’s complete paper can be found here.

Roza Nurgozhayeva is the Assistant Professor in the Graduate School of Business at Nazarbayev University.