- Wednesday | 01 Jun, 2022
- 10:30 AM - 12:30 PM
Climate change is one of the fundamental challenges to life as we know it. It is crucial for energy investments in BRI (Belt and Road Initiative) countries to minimize climate impacts and more broadly any adverse environmental impacts, while providing economic growth opportunities. However, to date, BRI countries are among the largest recipients of coal and fossil investments, particularly from China. The most important among the countries receiving Chinese investments in the BRI is Pakistan. Under the umbrella of the China–Pakistan Economic Corridor (CPEC), Pakistan has received about US$36 billion in energy investments and US$ 10.6 billion in transport investment. Of the energy investments, 28% went into coal, 7% into gas. With Pakistan’s goal to not build new coal-fired power plants in 2020 and China’s announcement to not build new coal-fired power plants abroad in 2021, two challenges arise: how to accelerate the green transition through green investments, while ideally phasing out existing brown investments. CPEC is a particularly important case study, as it is considered a role-model for China’s overseas engagement. Supporting a successful greening of CPEC would provide an important role model for greening other BRI countries to green their overseas Chinese investments in the BRI. The goal of the establishment of the Green CPEC Alliance with members from both countries’ governments, investors, and developers, as well as civil society, would be to support, accelerate and promote this transition within Pakistan and the BRI. The Alliance aims to green and decarbonize CPEC (China Pakistan Economic Corridor) by supporting a re-direction of Chinese infrastructure investments away from emission intense investments and towards green infrastructure projects, e.g. from coal to renewable energy, and ideally an early retirement of existing coal-fired power plants. Over the next 1-5 years, the Green CPEC Alliance will be working with partners in both countries to accelerate both supply and demand for green infrastructure investments. It will work with relevant stakeholders (e.g., through Belt Road Initiative Green Coalition (BRIGC) to scale experiences of greening CPEC to greening the BRI. It would also include working with Chinese regulators, investors and developers, and financial institutions to incorporate green financing guidelines and mechanisms, policy development, and provide relevant connections to accelerate green investment opportunities. On the demand side, the Green CPEC alliance will work with stakeholders in Pakistan to build a stronger pipeline of green investment opportunities, provide relevant capacity to plan and evaluate green projects (e.g., against stranded asset risks of fossilfuel investments) while ensuring a just transition. Internationally, the Alliance will work together with the relevant stakeholders including multilateral banks, financial institutions, CSOs, Academic institutions from all over the world to scale experiences from the Alliance with a broader stakeholder group. Sustainable Development Policy Institute (SDPI) and Pakistan-China Institute (PCI) have jointly initiated the process on the establishment of the Green China (CPEC) Alliance with members from both countries’, governments, investors, and developers, as well as civil society, to support, accelerate, and promote this transition within Pakistan and the BRI. The Alliance would therefore directly contribute to achieving the climate goals as well as better environmental outcomes, while promoting economic growth along CPEC and beyond in the BRI and in development finance. It will also help dissect the green financing mechanisms for CPEC energy projects in perspective of Pakistan’s commitment of shifting to 60% renewable energy by 2030.
To achieve the ultimate goal of Green CPEC Alliance, the first year of the project will focus on key thematic areas: i) Renewable Energy (RE) investments including public-private investments and non-mature markets, ii) Green financing in RE infrastructure with the following intermediate objectives:
1. To build capacity on Green Financing guidelines and Sustainable development needs of Pakistan among relevant stakeholders through enhanced dialogues, communication, and training workshops.
2. To perform research on “Greening CPEC” and develop Green Financing Guidelines and framework for it through evidence-led research.
3. To advocate the need of Greening CPEC through an extensive dialogue, along with social media campaigns, and close engagements with Embassy of People’s Republic of China in Pakistan, CPEC Authority, Chinese enterprises working on CPEC projects, Ministry of Planning, Development & Special Initiatives, Ministry of Energy, Ministry of Climate Change, as well as competent ministries and institutions in China, such as BRIGC, MEE, NDRC.