GREENING THE NEW SILK ROAD

The environmental impact of China’s Belt and Road Initiative (BRI) has been fraught with contradictions. While there are efforts to finance and promote green development through some BRI projects, other projects are raising serious environmental concerns.

BRI supports China’s long-term strategic shift around advanced technologies and clean energy. The initiative will open new markets for China’s formidable industrial expertise, including the country’s accelerating proficiency in renewable technologies. According to the IEA, China now has one-third of the world’s wind power, four of the top ten wind-turbine makers, six of the top ten solar-panel manufacturers, and a quarter of the world’s solar capacity.

https://www.business.hsbc.com/belt-and-road/going-green-is-good-business-for-chinas-bri

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As the principal market for renewable energy worldwide, China hopes to provide “green, low-carbon and circular development” to Asia’s 4.3 billion consumers in the development of a “Green Belt and Road”. To put things in perspective, renewables are expected to meet more than 70% of global electricity generation growth by 2023. Even as fossil fuels (coal, oil, gas) are predicted to remain the dominant source of energy through 2050, Beijing’s geopolitical ambitions could reshape the global energy equation.

Forecasts by McKinsey suggest that electricity will account for a quarter of all energy demand by 2050 (compared with just 18 percent today). In fact, more than three-quarters of all new capacity (77 percent) will come from wind and solar and just 13 percent from natural gas. Not surprisingly, China and India will account for 71 percent of all new electricity capacity.

What seems clear is that clean energy is a 21st century industry that China is well positioned to dominate. Where the Trump administration sees renewable energy as a threat to jobs, China is leveraging clean energy as part of a long-term strategic gambit. Long-term planners in the United States and elsewhere would do well to take note. Renewables are expected to make up half of all power generation by 2050 with China leading the way. Given the continuing fall in the cost of battery storage and the massive growth in electric vehicles (50% of all cars by 2050), China’s clean energy investments through BRI look poised to utterly transform the global clean energy industry.