An empirical analysis of the environmental performance of China’s overseas coal plants

Abstract

China’s ongoing commitment to overseas infrastructure investment through the Belt and Road Initiative (BRI) has ignited concern over environmental impacts. The BRI’s environmental impacts will be determined by China’s decisions not only on what kinds of projects to fund, but also how those projects end up operating relative to projects without Chinese involvement. It is critical to understand current performance and establish a baseline understanding of the environmental impacts of China’s overseas projects thus far. We examine the environmental performance of coal-fired power plants in Asia in terms of carbon dioxide emissions intensity. Using generating unit-level data and a regression-based analysis, we estimate the comparative emissions intensity of overseas coal plants owned, designed, or constructed, by Chinese and non-Chinese companies. We find that Chinese coal plants tend to have significantly lower emissions intensity than similar non-Chinese coal plants. Given that total emissions rather than relative emissions intensity primarily drive the global warming impact of a plant, we also estimate total annual emissions and committed lifetime emissions of the plants in our dataset. We find that while Chinese plants may have relatively lower emissions intensity, their total emissions will grow as a proportion of the coal plant emissions in Asia over time.