Does the Belt and Road Initiative Increase the Carbon Emission Intensity of Participating Countries?

• Published date: 01 May 2021
• Author: Yan Wu,Chunlai Chen,Cong Hu
• Date: 01 May 2021
• DOI: http://doi.org/10.1111/cwe.12374

©2021 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 1–25, Vol. 29, No. 3, 2021 1

Does the Belt and Road Initiative Increase the Carbon

Emission Intensity of Participating Countries?

Yan Wu, Chunlai Chen, Cong Hu*

Abstract

The impact that the Belt and Road Initiative (BRI) has had on carbon emissions is a hotly

debated issue. Using a panel dataset of 178 countries from 2002 to 2017, and applying

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first, the BRI overall tends to reduce the carbon emission intensity of BRI countries.

Second, the impact of BRI on reducing the carbon emission intensity is significant for

BRI countries at higher (0.8 and 0.9) and lower (0.2 and 0.3) carbon emission intensity

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impacts on reducing carbon emission intensity in the energy-intensive industries, and this

effect is the highest at the quantile level of 0.9 for all three industries considered here:

transportation, electric and heating, and manufacturing and construction. These results

indicate that establishing BRI cooperation with China will improve the environment and

enhance the sustainable development ability of BRI countries.

Key words: Belt and Road Initiative, carbon emission intensity, difference-in-difference,

quantile regression

JEL codes: F02, O13, Q56

I. Introduction

With increasing globalization, resource and environmental issues have become the

global challenges threatening human sustainable development, especially in developing

countries. Under the framework of the Paris Agreement, developing countries face the

dual challenges of economic development and environmental pressure. A country is

considered to be using a low-carbon and sustainable development model only when its

*Yan Wu, Associate Professor, School of Economics, Beijing Technology and Business University, China.

Email: wuyan@btbu.edu.cn; Chunlai Chen, Professor, Crawford School of Public Policy, Australian National

University, Australia. Email: chunlai.chen@anu.edu.au; Cong Hu (corresponding author), PhD Candidate,

School of Economics and Resource Management, Beijing Normal University, China. Email: bshida@126.com.

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The authors are grateful for professor Xunpeng Shi’s helpful comments on revising this paper.

© 2021 The Authors. China & World Economy published by John Wiley & Sons Australia,

Ltd on behalf of Institute of World Economics and Politics, Chinese Academy of Social Sciences.

Legal Statement: This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License,

which permits use, distribution and reproduction in any medium, provided the original work is properly cited

and is not used for commercial purposes.

Yan Wu et al. / 1–25, Vol. 29, No. 3, 2021

©2021 Institute of World Economics and Politics, Chinese Academy of Social Sciences

2

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Transferring carbon-intensive industries to other countries is a way to achieve emission

intensity reduction but it is not desirable. It is therefore interesting to know whether

China, which has pledged to bring its emissions to a peak before 2030 and will achieve

net zero emission by 2060, has shifted its emissions overseas.

The Belt and Road Initiative (BRI), which was launched by China in 2013,

provided a good case study to investigate whether China has reduced its emission

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has a global impact but it is led by a developing country, which provides a contrast

with the dominant cooperation models between developed and developing countries.

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in the BRI,1DFFRXQWLQJ IRUDSSUR[LPDWHO\ SHUFHQW RI JOREDO*'32 and 28 percent

of global carbon emissions.3 Since the implementation of the BRI, China’s outward

foreign direct investment (OFDI) in BRI countries has increased rapidly. China’s OFDI

stock in the BRI countries surged from US$56.2 billion in 2012 to US$143.8 billion in

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in the US and the EU has been declining since peaking in 2016 (Kirkegaard, 2020). In

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developing countries will likely have a different emission impact from the prevailing

developed–developing or developed–developed cooperation nexus. Most BRI countries

are developing countries in economic transition, and their carbon emission and pollution

problems are more prominent than in other countries, so it will be more difficult to

reduce carbon emission intensity and pursue sustainable development.

What impact has the BRI had on the carbon emission intensity of BRI participating

countries? The answers to this question are inconclusive, and sometimes contradictory,

in the literature. Some studies argued that the BRI might increase carbon emissions in

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especially in reducing the carbon emissions of BRI countries by developing green

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1The latest BRI participating countries can be found at: https://www.yidaiyilu.gov.cn (online; cited September

2020).

2The data are available from: https://databank.worldbank.org/source/world-development-indicators (online;

cited September 2020).

3The data are available from: https://www.iea.org/data-and-statistics (online; cited September 2020).

© 2021 The Authors. China & World Economy published by John Wiley & Sons Australia,

Ltd on behalf of Institute of World Economics and Politics, Chinese Academy of Social Sciences.

Legal Statement: This is an open access article under the terms of the Creative Commons Attribution-NonCommercial License,

which permits use, distribution and reproduction in any medium, provided the original work is properly cited

and is not used for commercial purposes.