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Are China’s New Silk Road Ambitions a Desert Mirage?

17 August, 2020
Will Marshall, Fair Observer

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Belt and Road, China, Fossil Fuels, Green Investment
© Trevor Cole/

China’s Belt and Road Initiative projects may exacerbate the risk of climate-related instability across the Middle East in the long term.

Anthropogenic climate change and the unprecedented shift in the global center of economic gravity from West to East represent two of the most profound macrotrends set to transform the geopolitical landscape in the 21st century. Indeed, as Asia’s emerging powerhouses, notably China, with its population of 1.4 billion, seek to elevate their citizens to a standard of living comparable to that of the developed world over the coming decades, global energy demands are on course to rise at an exponential rate, bringing with them the unsettling prospect of a 3°C increase compared to pre-industrial levels — double the upper threshold enshrined by the Paris Climate Agreement.

As such, ensuring China’s energy security constitutes one of the core objectives of Beijing’s much-hyped Belt and Road Initiative (BRI), a multitrillion-dollar infrastructure and development project aimed at furthering China’s geopolitical and geo-economic clout on the world stage. Predicated upon the revival of the ancient Silk Road connecting the Mediterranean and the Pacific, Beijing’s “project of the century” hinges upon developing a vast network of highways, pipelines and strategic ports across the Greater Middle East, a geographical macro-region stretching from Morocco to Afghanistan that is as rich in fossil fuels as it is vulnerable to the most damaging repercussions of climate change.

Crescent of Fragile States

Even absent the threat posed by climate change to Middle Eastern countries, the broad crescent of fragile states spanning from the Levant to the Hindu Kush already represents one of the most challenging environments for foreign investors. Plagued by the aftershocks of the war on terror and the Arab Spring, political and security risks remain endemic across the region, from widespread social discontent exemplified by ongoing mass protest movements in Lebanon and Iraq to incessant civil conflict as seen in Syria, Libya and Yemen set against the backdrop of an escalating Saudi-Iran proxy conflict encouraging all but the most fearless investors to steer a wide berth.

Moreover, climatologists predict that Middle Eastern countries stand to be among the worst affected on the planet if current meteorological patterns persist, with summer temperatures set to rise at double the global average, increasing the likelihood of devastating droughts, famines and extreme weather events across the region.

Climate change has long been regarded as a threat multiplier exacerbating conflict, social unrest and state fragility. For instance, Ankara’s damming of the Tigris and Euphrates rivers as part of the colossal Southeastern Anatolia Project aimed at transforming Turkey’s underdeveloped provinces through mass irrigation serves to foment conflict over scarce water resources downstream in Syria and Iraq. As water shortages and decreased rainfall undermine agricultural livelihoods and increase food insecurity, desperation has driven millions to migrate to urban centers such as Baghdad, Basra and Damascus, causing overpopulation and overburdening already fragile urban infrastructures.

Unsurprisingly, the Syrian crisis was predated by a once-in-a-generation drought, which saw the country’s urban population increase by 50% over a decade and is widely attributed as a major underlying factor propelling its descent into civil war in 2011. Nor can less obvious yet equally damaging second and third-order effects of climate change be neglected. Unprecedented monsoon seasons during 2018 and 2019 driven by a warming Arabian Sea have given rise to immense locust swarms that have decimated crops, exacerbated food insecurity and fueled the worst humanitarian crisis of the 21st century in Yemen.

Strategic Planning

For Beijing’s investors and strategic planners, such increasingly volatile environmental conditions and, more importantly, their associated social, economic and political consequences, are likely to prove a thorn in the side of China’s BRI ambitions. Already, Chinese-led infrastructure projects along the China-Pakistan Economic Corridor have been repeatedly targeted by the Balochi Liberation Army, a separatist militant group that exploits widespread water insecurity exacerbated by climate change to fuel insurgent recruitment in Pakistan’s restive Baluchistan province, as illustrated by a spate of recent attacks that have resulted in the deaths of several Chinese nationals.

As Beijing grows its footprint in the fragile states and frontier markets of the Greater Middle East, it is reasonable to expect Chinese investments to be increasingly targeted, for example, by Islamist extremists hailing from East Turkestan active in Syria, enraged by Chinese activities in Xinjiang vis-à-vis the Muslim Uighur minority. Such incidents not only represent physical risks to BRI projects but also commit potential investors to support extensive private security operations, potentially undermining the financial viability of such investments. Indeed, China’s BRI projects may exacerbate the risk of climate-related instability across the region in the long term as evidenced by the projected impact of the Chinese-built Sardasht and Rudbar dams in Iran on water security downstream in Iraq.

Moreover, connecting China’s diverse portfolio of investments across the Greater Middle East into a single integrated economic corridor traversing East and West demands the incorporation of fragile and conflict-afflicted states holding valuable geostrategic locations such as Syria, Iraq and Afghanistan into the Belt and Road Initiative. While Beijing has expressed a keen interest in playing a pivotal role in post-conflict reconstruction in such fragile environments, ongoing food and water insecurity, land degradation and migration resulting from climate change may drag China’s geo-economic ambitions into the same quagmire of intractable conflict that thwarted Washington’s geopolitical aspirations over the past two decades.

Green Investment

Nevertheless, the notion that Beijing’s New Silk Road is merely a path to ecological ruin is a mistaken one. Domestically, China is the world’s largest producer of wind and solar energy as well as the most prolific innovator in the renewables sector, holding more patents for renewable technologies than any other nation. Moreover, Beijing realises such comparative advantages represent a valuable yet insofar underexploited resource to fuel development along the Belt and Road, setting up a state-backed Green Silk Road Fund to coordinate investment in carbon-neutral projects abroad, such as Morocco’s Ouarzazate Solar Power Station and Pakistan’s Quaid-e-Azam Solar Park.

Despite widespread evidence of the detrimental impact of dam construction on downstream habitats, efficiently managed dams backed by Chinese capital not only offset emissions through the provision of hydroelectric power but hold the potential to mitigate the most detrimental effects of climate change through extensive irrigation systems in hitherto arid regions of Iran and Pakistan.

Paradoxically, Beijing’s most lucrative opportunities for green investment may lie in the petroleum-rich monarchies of the Persian Gulf. As Gulf states look toward a post-oil future, ensuring the prosperity and relative political stability such countries currently enjoy in the coming decades is paramount. Given the Gulf’s immense energy demands and vast potential for solar, wind and tidal energy production across the region, green investment represents an integral pillar of post-petroleum diversification initiatives such as Saudi Arabia’s Vision 2030, Kuwait’s Vision 2035 and the United Arab Emirates’ Energy Strategy 2050, with investment in renewables across the Gulf soaring 313% from 2014 to 2018.

Already, Beijing has successfully harnessed such ambitious visions to promote the Green Silk Road, partially funding the Mohamed bin Rashid Solar Park, the world’s largest solar plant, in partnership with the UAE government, while obtaining a 49% stake in Saudi ACWA Renewable Energy Holdings, one of the largest financiers of green energy projects across the Middle East and North Africa. At one level, Chinese investment in the renewable energy transition in the Gulf is likely to present a win-win situation: financing the diversification of petroleum-dependent economies while providing ample scope for Beijing to export its domestic success promoting a sustainable energy transition abroad. However, even among the more stable, petroleum-rich monarchies of the Persian Gulf, the prospect of rapidly rising temperatures and an accelerated transition from fossil fuels to renewables may endanger Beijing’s BRI ambitions.

As increased global investment in renewables lowers the cost of solar, wind and tidal energy relative to fossil fuels, decreased demand for petroleum and natural gas is likely to mean that Gulf monarchies in the midst of an energy transition yet still dependent upon non-renewables for a substantial proportion of their GDP may encounter insurmountable challenges as they are forced to shift from their traditional rentier political economies, raising the prospect of widespread social and political unrest.

As the unprecedented collapse in global fossil fuel prices as a result of the COVID-19 pandemic and the Russia-Saudi oil price war during the first half of 2020 illustrated, the political and economic systems of the Gulf monarchies remain ill-prepared for the rising debt, tax hikes and extensive austerity measures that such a transition may entail. The prospect of increased political volatility in countries that have long represented an anchor of stability in an otherwise turbulent Middle East may yet undermine what has so far been one of the clear-cut successes of Beijing’s BRI across the region.

Overall, China’s greatest obstacle to realizing its expansive ambitions for a New Silk Road is not Beijing’s economic or geostrategic rivals — of which there are many — but rather an increasingly hostile geophysical environment in the states that straddle its heartland. By 2049, the proposed terminus date of Beijing’s flagship project on the centenary of the People’s Republic of China, average temperatures across the Middle East and North Africa region are set to increase by more than 4°C, followed by extreme droughts and famines rendering large swathes of land surrounding the Persian Gulf uninhabitable.

How China’s investors and strategic planners respond to this looming threat only time will tell. Despite recent positive signals indicating Beijing’s desire to jump aboard the renewables bandwagon, the most damaging repercussions of anthropogenic climate change are likely already irreversible. Just as America’s unipolar moment became unhinged amid the shifting sands of the Greater Middle East, China’s BRI ambitions may prove to be little more than a mirage in the desert.

*[Gulf State Analytics a partner organisation of Fair Observer.]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.


[This article originally appeard on the Fair Observer.]


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