Does the Belt and Road Initiative (BRI) improve environmental quality of BRI countries? Evidence from a quasi - natural experiment

Abstract

ABSTRACT Based on the panel data of 91 countries from 2009 to 2019, we apply difference-in-difference (DID) method and decoupling analysis to examine the effects on environmental quality and economic growth from a dual perspective. This study found that: (1) the Belt and Road Initiative improves the environmental quality of BRI countries. (2) The initiative has more significantly improved environment of the carbon peaking achieved countries, non-tropical regions rather than their counterparts; It has a beneficial effect in both landlocked and coastal countries. No matter the countries are industrialized or not, participating in China’s high-speed rail projects or not, their environments have been improved. But the improvement is more pronounced for industrialized countries and countries not involved in China’s high-speed rail projects. Meanwhile, the more complete citizens’ voice and accountability, and the higher financial expenses, the more significant improvement there is for them. (3) The initiative can improve environment through investment, employment structure and clean energy. (4) The initiative also significantly boosts the economic growth of BRI countries. Furthermore, decoupling relationship between Gross Domestic Product (GDP) growth and carbon emission levels shows that the number of BRI countries in strong decoupling state gradually decreases in 2015–2017, while increasing in 2018–2019.