BLOOMBERG, DECEMBER 21, 2020
The real-life environmental and social impact of China’s infrastructure initiative shouldn’t be overlooked
Bloomberg News – A lot has been written about China’s multibillion-dollar Belt and Road Initiative. Economists have debated the debt dynamics. Political scientists have analyzed how it fits into the rising power’s geopolitical strategy. And climate experts have decried the emissions China is adding to the atmosphere by supporting fossil fuel projects.
Rarely do we hear from the people whose lives are directly affected by the program. Earlier this year, a coalition of activist groups published Belt and Road Through My Village, a compilation of interviews with about 100 local residents who live close to BRI projects in five Asian countries.
It was a chance for them to express their concerns, and the list is long: disputes over land use rights, water and air pollution, deforestation, and loss of indigenous culture are just some of the issues they raised. The stories are a powerful reminder to governments and investors to consider the environmental and social impact of the BRI.
Muhammad Asif, 42, used to work at the Sahiwal coal-fired power plant, a BRI project built on 690 hectares of fertile land between Karachi and Lahore — Pakistan’s two biggest cities. The plant created more than 3,000 jobs and has been held up as an example of the good the BRI can do.
But Asif worries about the damage the plant is doing to the land and air. “All this development work has its cost,” he says in the book. Contaminated water from the plant is released into a nearby canal that’s used for crop irrigation and drunk by cattle. “We fear that this contaminated water may sicken our cattle and make our lands barren or, at least, contaminate the produce. Air pollution is also becoming a problem as people have begun suffering from nasal, skin and lung diseases,” he says.
China insists that BRI projects are strictly vetted for environmental impacts and are meant to benefit the people who live in those areas, but in practice it has fallen short in introducing concrete steps to limit its financing of carbon-intensive practices. Local communities have also complained about a lack of transparency around the projects.
That’s slowly changing as environmental concerns become a greater investment risk. In Myanmar, the $3.6 billion Myitsone hydroelectric dam co-developed by China Power Investment Corp. has been stalled since 2011 following large protests over the lack of a proper environmental assessment. The license for a $2 billion coal power plant in Lamu was canceled by a tribunal in Kenya because the public wasn’t consulted. A China-funded dam under construction on the Indonesia island of Sumatra is also facing fierce protests for posing a serious threat to endangered orangutans.
As countries step up their climate commitments under the Paris Agreement, more governments are expected to turn away from coal and other projects that damage the environment.
Pakistan, for example, said at the Climate Ambition Summit this month that it will stop building coal-fired plants. The China-Pakistan Economic Corridor (CPEC), which is the centerpiece of the BRI, has been long criticized for increasing Pakistan’s dependence on coal. “If coal-fired power is now being de-prioritized within CPEC, then it could also happen right across the BRI program,” says Simon Nicholas, an analyst at Institute for Energy Economics and Financial Analysis.
Even as awareness grows within China that it has to manage such risks, the government has so far only issued non-binding recommendations to improve green standards in its overseas investments.
The BRI International Green Development Coalition, which is supervised by China’s environmental ministry, this month proposed a color-coded classification mechanism as a way to better assess environmental risks assessments. The system would be based on three major factors: pollution prevention, climate change mitigation and biodiversity conservation. Projects that would cause “significant and irreversible” damage would mandate stricter supervision from the government, harder financing conditions and more stringent financing status disclosure requirements.
That sounds like step in the right direction, but the proposal is merely a suggestion. More government departments and state banks would have to get on board for it to be implemented.
What’s missing are laws that require environmental and social assessments for every overseas project the BRI is considering investing in, according to Wang Xiaojun, founder of People of Asia for Climate Solutions, a Manila-based nongovernmental organization which co-published the book. Policymakers need to understand that local concerns are real and will increasingly become an important factor in determining the success of a project, he says.
One of the official goals of the BRI is to enhance people-to-people communication. That’s “the hardest but also the most urgent,” says Wang. “To hear the people, instead of excluding them from the dialog, should be the first step to reach this goal.”
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