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The Conundrum at the Heart of China’s Belt and Road Initiative

Fortune Global Sustainability Forum 2019Fortune Global Sustainability Forum 2019
Jin-Yong Cai, Partner, Global Infrastructure Partners; Former CEO, International Finance Corporation speaks at the Fortune Global Sustainability Conference.Stefen Chow—Fortune


What is more important for China's Belt and Road Initiative: providing energy security in developing countries—or cutting out coal?

That question was at the heart of a roundtable Friday at Fortune's Global Sustainability Forum in Yunnan, China. On the one hand, the Belt and Road Initiative represents an umbrella of infrastructure projects with an estimated $2 trillion in funding largely from Chinese banks for major investment projects in developing countries—including coal-fired power plants.

On the other, there's the protection of the environment in those regions—and the push to eliminate coal completely from the energy system.

"My opinion is very clear, which is that the [Belt and Road Initiative]—from an environmental perspective—represents both probably the biggest challenge but also maybe the biggest opportunity," said Zhang Jianyu, vice president and chief China representative at the Environmental Defense Fund.

But it was also clear that the scale of the infrastructure projects, including coal energy, does pit economic growth for developing countries against environmental goals.

"How do we supply modern energy supplies, to make life better, while also protecting the environment?" said Cai Jinyong, a partner at Global Infrastructure Partners, and former CEO of the International Finance Corporation.

Developed countries achieved growth through coal-fired energy, and many still rely on it, he said. Developing countries deserve the same chance to have energy security, even if it comes through coal.

"You cannot have only solar to power a country," he said. "Trying to prevent every developed country from doing coal-fired is not practical, and it's not fair either."

The result, Jinyong said, risked prioritizing the environment over humans escaping poverty.

"I'm not saying we need to take care of birds over humans," countered Zhou Jinfeng, secretary-general of the China Biodiversity Conservation and Green Development Foundation. "The reason we need to take care of birds is we're facing the sixth major extinction [and] they're part of our ecosystem." The extinction of bird species is a dire warning for the future of human beings, too.

"We have to do everything we can to protect the economy, but we also have to do everything we can to help the poor people, to have energy," said Jinyong. "We face a very, very difficult choice."

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