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BRI projects may be graded on green performance

2021-02-18Source:China Daily Global

A ranking system has been suggested to classify Belt and Road Initiative investment projects that may face environmental hurdles based on factors such as climate change mitigation, pollution and biodiversity protection, a senior official said.

Early studies have been completed by the BRI International Green Development Coalition on evaluation methods for project investment, said Li Yonghong, deputy director-general of the Ministry of Ecology and Environment's Foreign Environmental Cooperation Center.

The coalition will also conduct pilot programs to gain information on how to further develop green solutions for future BRI projects.

International financial institutions often classify projects based on their environmental impact in order to improve environmental risk management. Without a similar system for all outbound investment, the Chinese government can only impose weak restraints on the environmental behavior of enterprises operating abroad, Li said.

Due to the absence of such a system, he said many enterprises involved in the BRI have yet to develop adequate environmental risk management procedures.

"With different environmental and climatic conditions, some BRI countries have very sensitive ecosystems," he said.

Li said the coalition launched a study on a "greenlight system" to evaluate BRI investments and published a report in December following the completion of the first phase of the study. The report recommended classifying BRI projects into three categories-red, yellow and green-in accordance with their environmental performance.

Projects at risk of causing "significant and irreversible" environmental damage will be listed as red. Projects listed as yellow are environmentally neutral with moderate impacts, in which any residual harm can be mitigated.

Those with no significant negative impact and positive contributions to at least one environmental aspect will fall into the green category.

The report stated that a project's status can be changed through further environmental protection efforts.

It also suggested establishing an "incentive and punishment" mechanism to guide financial institutions in accordance with environmental risks and impacts.

Li said the coalition will carry out more case studies and look at specific industrial sectors as it tries to come up with practical solutions for government bodies, financial institutions, enterprises and other stakeholders involved in BRI projects.

However, Li said in the economic development of some BRI projects, it will almost be inevitable that infrastructure and energy development projects will have negative impact on local environments.

"Our second phase study will give priority on how to reduce this impact … and provide projects of different categories green solutions to address their potential environmental hazards and upgrade their classifications," he said.

Initiated in April 2019 by the ministry and partners from home and abroad, the coalition has more than 150 partners, including the environmental authorities, research institutes and NGOs of BRI countries.

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