Revising the ‘host country standard’ principle: a step for China to align its overseas investment with the Paris Agreement

Voituriez, Tancrède; Yao, Wang; Larsen, Mathias Lund

doi:10.1080/14693062.2019.1650702

Cited by 19 publications

(14 citation statements)

References 3 publications

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“…It is arguably in their interest to do so to mitigate social and environmental risks that could affect their global reputations and ability to make future investments. Voituriez et al (2019) argue that China’s development banks should use whichever standard is more stringent, the domestic Chinese standard or the host‐country standard. While the new China‐led multilateral banks like AIIB are beginning to do so, they are tiny actors in China’s overall banking system, and may not even be considered ‘Chinese’ banks.…”

Section: Findings and Policy Implicationsmentioning

confidence: 99%

Chinese Overseas Investment Policy: Implications for Climate Change

Gallagher

2021

Global Policy

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President Xi Jinping launched the Belt and Road Initiative (BRI) in 2013. In total capital, China is now the largest investor in least‐developed countries and in developing Asia, and the fifth‐largest investor in Africa. Motivated by concerns about the climate change consequences of China’s overseas investments, this paper identifies and evaluates Chinese policies governing China’s overseas investments and analyzes how those policies influence environmental outcomes in recipient countries. Policies governing domestic investments are analyzed in order to clarify inconsistencies between domestic and overseas policies. Key findings are that the Chinese government’s environmental policies governing domestic investments are more stringent than those governing overseas investments. Chinese environmental overseas investment policies are mostly voluntary in nature so long as firms comply with host country regulations. Disclosure and transparency of information about China’s investments is opaque. Even if there is a failure to comply with host country regulations, there do not appear to be serious enforcement consequences. Finally, China encourages overseas investments in clean energy as well as exploration and development of higher carbon industries and fails to specifically restrict or prohibit investment in carbon‐intensive and fossil fuel industries in its overseas investments, revealing a discrepancy between policy for domestic and overseas investment.

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Section: Findings and Policy Implicationsmentioning

confidence: 99%

Chinese Overseas Investment Policy: Implications for Climate Change

Gallagher

2021

Global Policy

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“…The strength of the signal is ‘soft’ if it emphasizes voluntary green engagement in the BRI (e.g. compliance with local environmental laws, which is often referred to as the ‘host country principle’ [Voituriez et al, 2019]); a “hard” signal provides clear regulations and thresholds for ‘green’ investments. To analyze the strength of the issuer of the signal , Gallagher et al (2018) analysis shows that the following ministries are particularly relevant for issuing green BRI policies: State Council, the People's Bank of China (PBOC), the Ministry of Finance (MOF), the National Reform and Development Commission (NDRC), the Ministry of Commerce (MOFCOM), and the State‐owned Assets Supervision and Administration Commission (SASAC); less relevant but still important BRI ministries are the Ministry of Ecology and Environment (MEE)—until 2018 the Ministry of Environmental Protection (MEP), the Chinese Banking and Insurance Regulatory Commission (CBIRC), the State Administration of Foreign Exchange (SAFE), the Chinese Securities Regulatory Commission (CSRC), and the Ministry of Foreign Affairs (MFA).…”

Section: Analyzing “Green” Bri Policy and Investments As A Tool Of Ch...mentioning

confidence: 99%

Green finance for soft power: An analysis of China's green policy signals and investments in the Belt and Road Initiative

Nedopil

2021

Env Pol Gov

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In this paper, I study why and how China uses green overseas finance in its Belt and Road Initiative (BRI) to build soft power. I apply Miskimmon et al.’s framework, which postulates that soft power is built on ‘signals' and ‘action’: I study eleven relevant Chinese BRI government and sector‐led signals in green BRI development and analyze Chinese green versus non‐green energy investments as actions. I find that Chinese regulators and financial institutions have provided multiple signals for greening finance in the BRI, while green finance action is insufficient with continued sponsoring of non‐green investments. The paper concludes that green finance is a tool for China to build soft power in the BRI, but it is applied insufficiently due to a lack of green finance action. The paper also finds that insufficient strength of soft power signals can lead to a dichotomy between soft power signals and action with possible negative consequences for soft power.

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“…The surge in the number of cancelled coal and hydro projects and the associated environmental risks should also signal an alarm to host countries. Chinese overseas investments tend to follow the demand of host countries (Tritto, 2021;Voituriez et al, 2019) and these countries are often less developed and lack sufficient environmental policies and incentives to steer investment towards clean energy (Gallagher et al, 2021). Many environmentally risky projects were proposed by host countries, who then approached the Chinese side for funding (Kong and Gallagher, 2021).…”

Section: Discussion and Policy Implicationsmentioning

confidence: 99%

Environmental risks and power plant suspensions

Zhou

Simmons

2021

Preprint

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Power sector investment is crucial to accelerate a sustainable energy transition, but not all investments are successful. To shed light on investment trends, we examine 1393 Chinese overseas electric power projects spanned around 78 countries over the past two decades. We identify 5% have been cancelled or delayed, with coal and hydro projects having much higher failure rates than solar and wind projects. We find the suspension is associated with technology-specific, georeferenced environmental risks. Coal projects located in more densely populated areas where more people are exposed to air pollutants, in countries with more fatalities from extreme weather events, and in places with environmental protests, are more likely to be suspended. Additionally, hydro projects closer to protected areas have a higher suspension rate. Our results suggest that restraining from investing in environmentally risky projects helps mitigate environmental damages and prevent financial losses due to cancellation and postponement.

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Revising the ‘host country standard’ principle: a step for China to align its overseas investment with the Paris Agreement

Cited by 19 publications

References 3 publications

Chinese Overseas Investment Policy: Implications for Climate Change

Chinese Overseas Investment Policy: Implications for Climate Change

Green finance for soft power: An analysis of China's green policy signals and investments in the Belt and Road Initiative

Environmental risks and power plant suspensions

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