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Powering a Green Belt and Road Initiative

Macro Trends of Investment Flows, Corporate Policy, and Press Release Rhetoric in BRI Energy Sector Projects

Oxford University Silk Road Society

Spring 2021

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Powering a Green Belt and Road Initiative

April 2021

Oxford University Silk Road Society’s policy report ‘Powering a Green Belt and Road Initiative' explores macro trends of investment flows, corporate policies, and press release rhetoric in the BRI energy sector projects.

Overall, the report aims to answer the research question, "To what extent does China's Green BRI rhetoric correspond with on-the-ground developments towards sustainability of financial flows, in particular in the energy sector?

This report was put together by our analysts Jack Mageau, Karim Boukeba, Macarena Carmona Schwartzmann, and Ben Mattinson

The full report is available below, with a foreword from our Senior Member, Peter Frankopan. 

Our report sections

Introduction

This report will analyse changes in rhetoric and policy from Chinese state-owned financial institutions as well as BRI-affiliated multilateral development banks that accompanied the 2017 shift in Chinese government policy toward the promotion of green BRI energy investment. It will then compare these rhetorical and policy shifts to BRI-related financial flows in the energy sector from 2013 to 2020. By analysing the Chinese green rhetoric developed in the past four years and contrasting it with the energy sector's financial flows, we will review and evaluate any changes in the energy investment patterns after 2017.

In this section, we look into papers and reports to understand 1) State-owned Banks 2) Multilateral Banks. Overall, the use of green-related terms saw an increase over time in the vast majority of papers that we studied.

In addition to that, this section also illustrates the general policy approaches that these banks adopt toward green energy, and any recent policy or practice changes they may have taken in light of the “green BRI” announcement in late 2017.

Findings and Analysis: Bank Policy and Rhetoric

Findings and Analysis: BRI Financial Flows

Based on our analysis, according to the metric of investment size in energy projects, China has, at least to a degree, pursued a policy of “greening” the BRI since 2017.

This greening, however, rather than a significant expansion in investment in green energy projects, has primarily taken the form of a sharp drop in investment in fossil fuel projects. As such, the extent to which one can speak of a greening of the BRI has occurred depends in large part on whether one considers hydropower to be a form of green energy.

Conclusion, Summary, and Policy Recommendations

In conclusion, this report has analysed changes in rhetoric and policy shifts from Chinese and multilateral development banks between the years 2013-2020 with regard to the promotion of green energy in the Chinese Belt and Road Initiative. It has then compared those rhetorical and policy shifts to on-the-ground developments in energy investment financial flows to determine the extent to which rhetorical and policy changes drive real change in energy investment.