Working Together Towards a Green Transition

China’s outward investments have faced a global tightening of environmental constraints. Many BRI countries remain in the early stages of development, but they already face tighter ecological limitations. That is, BRI countries have to develop amid environmental restrictions, and this has brought many new changes to the BRI. How will green constraints influence the development of BRI countries? Environmental economics uses an inverted U-shaped Environmental Kuznets Curve (EKC) to reflect the traditional development path of “polluting first and cleaning up later”. However, as the international community intensifies measures to address global environmental issues and as public awareness of environmental protection increases, we note that the EKC is flattening. This means that many developing BRI countries produce less pollution and emissions than developed countries did at the same level of development. Nowadays, developing countries need to follow a new path of green development that encompasses “cleaning up while developing”. What are the challenges and opportunities facing BRI countries in taking the new development path? The key challenge is that tackling environmental issues at an early stage of development would raise costs of technology, energy, capital, and land. This in turn would constrain the development of energy, capital, and land-intensive industries, resulting in slow economic development and industrialization. However, the green transition also highlights the comparative advantages that many BRI countries have in resources such as new energy metals and clean energy. Developing countries also have labor cost advantages for developing mature green industries. While environmental constraints lead to higher green costs for BRI countries, the green transition process also empowers BRI countries to more actively engage their resources and labor forces in global industries. Green industries have the potential to become new economic growth drivers in BRI countries. What can China do to help BRI countries develop under green constraints? The key is to help BRI countries seize green opportunities and reduce green costs. China has technological and financial advantages in the green transition. It can strengthen collaboration with BRI countries in green infrastructure and manufacturing, incorporating their resources in new energy metals, wind and solar resources, and low-cost labor into the global green economy. This would enable BRI countries to benefit from the development of green industries. At the same time, China can help BRI countries cut green costs, encourage firms to apply higher emission standards, strengthen construction of social development projects, and promote establishing a cross-border environmental compensation mechanism. China can also share its own experience with BRI countries to help them break through green constraints in development.