Finally, Green CPEC Alliance

World Environment Day (June 5) is a globally significantly happening day. Even the entire week is full of meaningful new commitments, and all the days of the week are very important for green outputs and sustainable outcomes. This year the global event was organised by the Sweden government in partnership with the relevant UN organisations as Stockholm 50 plus, reviewing the journey from Stockholm in 1972 to 2022. Themed on “Only One Earth” – Living Sustainably in Harmony with Nature,” the global meeting has carved a new scope of work for the nations. Detailed comment next time.

Today’s focus shall be Pakistan’s grand launch of the “Green CPEC Alliance”, an imitative taken after several allegations, stories of environmentally unfriendly practices under the CPEC regime, conflict of interests and so on. With the launch of the Green CPEC Alliance, I believe, many rumours, suspicions and conflicting stories will die down. The bilateral key stakeholders will have figurehead support from both the governments while Sustainable Development Policy Institute (SDPI), Pak-China Centre (PCI) and development and management partners will run it on the parameters of sustainability and green growth models. Appreciable, though quite late.

As we all know, climate change is one of the fundamental challenges to life as we know it. It is crucial for energy investments in BRI countries to minimise climate impacts and more broadly any adverse environmental impacts while providing economic growth opportunities. To date, BRI countries are among the largest recipients of coal and fossil investments, particularly China. The most important among the countries receiving Chinese investments in the BRI is Pakistan.

Supporting a successful greening of CPEC would provide an important role model for greening other BRI countries to green their overseas Chinese investments.

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 investments. Of the energy investments, 28 per cent went into coal, and seven per cent 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 establishing 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 decarbonise CPEC by supporting a re-direction of Chinese infrastructure investments away from emission-intensive investments and towards green infrastructure projects such as from coal to renewable energy, and ideally an early retirement of existing coal-fired power plants. Over the next one to five 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 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 and provide relevant capacity to plan and evaluate green projects, against stranded asset risks of fossil-fuel investments while ensuring a just transition. Internationally, the Alliance will work together with the relevant stakeholders, including multilateral banks, financial institutions, CSOs, and 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 of 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 development finance. It will also help dissect the green financing mechanisms for CPEC energy projects in perspective of Pakistan’s commitment to shifting to 60 per cent renewable energy by 2030.

The Green CPEC Alliance shall mainly be serving to achieve the ultimate goal of Green CPEC Alliance, the first year of the project will focus on two key thematic areas: renewable energy investments, including public-private investments and non-mature markets, and green financing in RE infrastructure.

The Alliance will focus on building capacity on Green Financing guidelines and Sustainable development needs of Pakistan among relevant stakeholders through enhanced dialogues, communication and training workshops; to perform research on “Greening CPEC” and develop Green Financing Guidelines and framework for it through evidence-led research; to advocate the need of Greening CPEC through extensive dialogue, along with social media campaigns, and close engagements with Embassy of the People’s Republic of China in Pakistan, CPEC Authority, Chinese enterprises working on CPEC projects, Ministry of Planning, Development and Special Initiatives, Ministry of Energy, Ministry of Climate Change, as well as competent ministries and institutions in China, such as BRIGC, MEE, NDRC.

Huge and ambitious agenda for the green goodness of the region. Let’s see how much is done and what positive impact we see.