"Going Green: Impact of China’s Domestic Green Policy Shift on its Overseas Renewable Energy Finance Projects" - by CWP alum Lucie Lu
China has been expanding its investment in renewable energy sources from not just its domestic sphere, but internationally as well. Why are Chinese overseas development projects transitioning to greener energy even without pressure from domestic constituents or international governance? We argue that it is a positive spillover of China’s stricter environmental regulation on green economy and renewable energy initiatives in the early 2010s. Firms gain the technical expertise and know-how required to meet the new green standards within their home market, accumulating a comparative advantage in the global energy market and exporting cutting-edge technology overseas. We track energy types in construction and energy-related Chinese overseas development projects between 2000 and 2021, and find that they reflect a higher concentration of renewable energy projects after the implementation of domestic green policy shifts in 2012, long before its international pledge to green energy transition. In addition, when recipient countries have more ambitious green energy targets and transformation plans reflected in their Nationally Determined Contributions under the Paris Agreement, China supplies more green energy projects such as hydro, solar, and wind power. To explain why China appears as a genuine leading player in spearheading renewable technologies and fostering the global green economy market, we argue that its prior green domestic policy shift carries more weight than international commitments or pressure.
January 15, 2025 Draft paper for PEIO, Harvard University, January 2025
I am a Postdoctoral Research Fellow at the Center on Contemporary China at Princeton University. I’m currently a Project Fellow at the Penn Project on the Future of US-China Relations, where I provide academically-informed, policy-relevant analysis on US-China relations. I received my Ph.D. in political science at the University of Illinois at Urbana-Champaign in 2023. I was a Postdoctoral Research Fellow in the Columbia-Harvard China and the World Program at Columbia University in 2023-24 academic year.
Photo Credit: By Source file: Le Grand PortageDerivative work: Rehman - File:Three_Gorges_Dam,_Yangtze_River,_China.jpg, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=11425004
