Abstract
A significant corridor under the “Belt and Road Initiative” is announced by the government of China for numerous transport and energy projects. China focuses greatly on the sustainability of these projects, in accordance with Green Investment Principles. For this, environmental, social, governance, and technological considerations are taken into account. This paper offers a novel assessment of the impact of green sustainability under BRI and the current emission scenario in Pakistan. The question that needs to be addressed here is whether the projects under Belt and Road Initiative are as environment friendly as they claim. In the first phase of this study, we review theories establishing evidence based on existing literature to determine the influence of Belt and Road on economic development. In the next phase, we use Environment Kuznets Curve and apply estimates from Johansson’s Cointegration Test to quantify the present environmental scenario of Pakistan and probable environmental risk portrayed by the China-Pakistan Economic Corridor (CPEC). This paper helps in determining the relationship between carbon emission and three major variables including energy consumption, economic growth, and foreign direct investment (FDI). Cointegration analysis is applied on time series data comprising of a 40 years’ period from 1979 to 2019. The paper finds that (i) the belt and road corridors could substantially improve trade, foreign investment, and living conditions for citizens in participating countries; (ii) moreover, this study confirms the presence of one cointegrated equation suggesting the presence of a long term relationship between the CO2 and independent variables and a short run association running from EnC to CO2. The study also proposes a Green BRI Model which formulates a body that devises environmental performance standards, reviews procedures, and ensures that they get implemented on all CPEC projects. The Belt and Road Initiative increases emissions among participating countries. China and corridor economies need to adopt strict policy reforms that increase transparency, expand trade, improve debt sustainability, and mitigate environmental, social, and corruption risks.
Highlights
Introduction e most renowned OneBelt, One Road Policy (OBOR), initiated by People’s Republic of China, is a bidirectional strategy. is project is devised in such a way that it plans to enter the West by building a route through noncoastal countries (New Silk Road) and through deep waters [1]. e People’s Republic of China bears the vision of incorporating Chinese dream and the global dream by the international strategy of connectivity [2]. e strategic initiative by China to construct “21st Century Maritime Silk Road” and the “Silk Road Economic Belt” (SREB) aims to bring wealth and development in the region.ere exists a need to understand environmental risks associated with Chinese initiated megaproject under Belt and Road Initiative (BRI) and under China-Pakistan Economic Corridor (CPEC)
Most of CPEC projects include energy ventures; energy consumption is taken as our last variable. e phase of our study implies empirical analysis based on time series data for variables including CO2, foreign direct investment (FDI), Energy Consumption, and Gross Domestic Product (GDP) from 1979 to 2019 for Pakistan
We develop a linear quadric function that forms a linkage for CO2 emission, foreign direct investment as FDIn, Energy Consumption as EnC, and economic growth as GDP on the basis of Environmental Kuznets Curve (EKC) hypothesis
Summary
Introduction e most renowned OneBelt, One Road Policy (OBOR), initiated by People’s Republic of China, is a bidirectional strategy. is project is devised in such a way that it plans to enter the West by building a route through noncoastal countries (New Silk Road) and through deep waters [1]. e People’s Republic of China bears the vision of incorporating Chinese dream and the global dream by the international strategy of connectivity [2]. e strategic initiative by China to construct “21st Century Maritime Silk Road” and the “Silk Road Economic Belt” (SREB) aims to bring wealth and development in the region.ere exists a need to understand environmental risks associated with Chinese initiated megaproject under BRI and under CPEC. One Road Policy (OBOR), initiated by People’s Republic of China, is a bidirectional strategy. Major contributors of GHG emissions are infrastructure, energy ventures, and transportation sector. Pakistan stands 16th on IOV (Index of Vulnerability) checked against statistics of 170 nations [4]. It stands 135th for release of GHG on international standards. According to 2012 Global Climate Risk Index of German watch, Pakistan occupies 8th position when checked against 180 countries internationally [5]. Much discussion on the Belt and Road Initiative is conducted, significant efforts on its effects in the perspective of Pakistan have not been carried so far
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