China’s Economic Initiatives and their Impact on Environmental Governance of Global Infrastructure Projects
Keywords:Belt and Road Initiative, Asian Infrastructure Investment Bank, international financial institutions, race to the bottom, China
The Belt and Road Initiative (BRI) and the Asian Infrastructure Investment Bank (AIIB) have raised concerns among critics about their potential negative impact on global environmental governance. These China-led initiatives may lower the environmental and social safeguard standards of their infrastructure investments abroad to outcompete other international financial institutions (IFIs) like the Asian Development Bank (ADB) and the World Bank. This could trigger a race to the bottom in the global infrastructure investment market. The study found that while the BRI may have a significant influence on the norms and standards of development finance, the AIIB has only had limited impact. The market has become more concentrated rather than intensified competition. The ADB's standards have not been affected, but the World Bank may have been negatively impacted and reduced its project-level environmental safeguards. The negative impact extends beyond BRI countries to other countries. The most concerning finding relates to the substantial global investments in coal power projects under the BRI. To improve global sustainability, China and developed countries must collaborate to provide cleaner and more affordable infrastructure investment to developing countries.