Guest Christoph Nedopil-Wang discusses the 10-year journey of the Belt and Road Initiative (BRI). Topics include the shift towards clean energy, the involvement of private enterprises, major battery investments in Africa, the rise of solar and wind energy compared to fossil fuels, and the evaluation of Chinese projects in Africa with ESG standards.
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insights INSIGHT
BRI Energy Portfolio Reached New Green Peak
The first half of 2023 saw the highest absolute and relative green energy engagement in the BRI to date.
Over 50% of energy construction and investment in H1 2023 went to non-fossil projects, marking a shift in the energy portfolio.
insights INSIGHT
BRI Greening Involves Complex Manufacturing And Mining
BRI green transition includes manufacturing and metals investments beyond power generation, not all of which are unambiguously green.
Engagement spans EV manufacturing, batteries, and strategic mines needed for low-carbon tech, complicating green assessments.
insights INSIGHT
Private Firms Overtook SOEs In BRI Investments
Private Chinese firms now out-invest SOEs in BRI projects, reflecting stronger technological competitiveness.
Battery giants like CATL and BYD expand overseas production to be closer to customers and avoid trade frictions.
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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.)
Environment China