Greening the Belt and Road: A UK-China collaboration

China and the UK are working in close partnership to further the international collaboration needed to achieve the ambitious endeavour of greening the Belt and Road initiative (BRI). In 2018, the UK and China jointly published the Green Investment Principles for the Belt and Road. These voluntary principles aim to harmonise green infrastructure standards along the BRI, to increase the use of green financial products, and ultimately to vastly reduce the emissions footprint of the BRI.

Globally 70% of greenhouse gas emissions come from the construction and operation of infrastructure. As BRI countries will host significant new infrastructure in coming decades, greening the BRI is critical to building the low carbon development paths of many emerging countries for decades to come.

China, a key trade partner and investor in many BRI countries, is in a natural position to shape the green growth of BRI trade corridors. Between 2013 and 2018, trade between China and other BRI countries amounted to $6.47tn, which is phenomenal considering that total global merchandise exports in 2018 reached $19.5tn.

The UK, with its concentration of 250 foreign banks, provides a global platform for multilateral development banks and private sector players to co-finance major BRI projects. The UK's professional services, insurance and maritime firms also provide critical support to BRI deals' robust financing structures and ensure that risks are well mitigated and diversified.

Alongside supporting climate commitments, investments which fulfil internationally recognised green standards are commercially savvy, so offer investors a pathway to long-term stable returns.

Greening the BRI is a long-term vision. Partnership between China and the UK provides a once in a generation opportunity to set industry standards and mobilise private sector capital to accelerate a global low carbon transition.