What is the CPEC?
The China-Pakistan Economic Corridor (CPEC) is the framework for China’s infrastructure investments in Pakistan. It is part of the One Belt One Road (OBOR) initiative. The CPEC’s aim is to connect Kashgar, a city in the Chinese western autonomous region Xinjiang, to the port city of Gwadar in Pakistan’s southern region via highway, rail, and pipeline investments. The project was announced in 2013 during a meeting between the countries’ prime ministers in Beijing, but it was not officially launched until April 2015 when Chinese president Xi Jinping visited Pakistan. The CPEC became partly operational with the first Chinese cargo passing through Pakistan in 2016, and after reaching the Gwadar port, the shipment was further delivered to Africa and West Asia. The long-term investment plan with estimated costs of over 62 billion USD in 2017, is projected to last until 2030.
What is the importance of China’s investments in Pakistan?
The CPEC project has been mutually beneficial for both parties. China, as an investor of the new transit route through Pakistan, has gained access to cheap energy supplies from the Middle East and Africa because of Pakistan’s advantageous geopolitical position in the region. In return, the Chinese investments in road networks have contributed to Pakistan’s economic development by expanding its international trade with Asia, Africa, and the Middle East. Furthermore, the CPEC’s energy investments in Pakistan are very important to resolve the country’s energy shortages. According to the International Energy Agency (IEA), Pakistani energy output generated mainly by non-renewable energy sources is 15,000 megawatts (MW), while the country’s energy demand reaches 19,000 MW. This underproduction leads to power shortages in Pakistan.
Types of energy investments
The CPEC energy investment projects facilitate energy production from non-renewable and renewable sources. Pakistan faces energy shortages, because, while its natural characteristics would enable the country to generate sufficient energy from renewable energy sources, the Pakistani government has not invested in technology that is necessary to use these resources yet. However, the majority of China’s energy-technology investments still focus on coal-fired power plant projects with an estimated cost of 15 billion USD in the next 15 years. The Pakistan Alternative Energy Development Board has reported that the country has the available resources to produce millions of megawatts of electricity per year from renewable energy sources, including 2.9 million MW from solar, 340,000 MW from wind, and 100,000 MW from hydropower. The electricity currently produced by renewable energy sources is only 4% of total energy output, but it is planned to reach 30% by 2030. The environmentally-friendly energy sources, comprising a solar park, four wind farms and three hydro plants, will produce energy with a total output of 3,900 MW, at a cost of about 7.5 billion USD projected in the following six years.
China’s investments in coal and the environmental impacts on Pakistan
The amount of energy generated from coal is approximately three-quarters of Pakistan’s total energy production. Such large-scale coal combustion causes severe environmental issues. From the total 178 million tons of carbon emission produced by Pakistan in 2016, 26.2% was released by the power production industry. The intensive usage of coal caused pollution levels to rise by 3.9% (16 MTCO2 eq.) per year. In 2019, Pakistan was ranked as the second most polluted country in the world with a concentration of air pollutants of 65.8 µg/m3 (one-millionth of a gram per cubic meter). The extensive amount of water needed for cooling coal power plants has raised concerns about water scarcity and pollution. Coal extraction and its energy production has depleted the natural resources of Pakistan and has consequently negatively impacted public health and wildlife. The burning of coal has increased weather temperatures which caused both drought and irregular heavy rainfalls that severely damaged crops.
The coal power plant at the Gwadar port, which costs 360 million USD to be set up, is one of the most economically significant Chinese projects in Pakistan. While the plant is expected to produce 300MW electricity from imported coal, its activity has been affecting the local flora and fauna severely. Before the launch of this project, approval was provided by the Environmental Protection Agency (EPA) which confirmed that the carbon emission will be reduced by the technology used in production. However, experts have pointed out that the technology cannot reduce the carbon emissions as per the coal usage. The environment in Gwadar, one of the most important coal extraction locations, has experienced extensive damage and heavy pollution, which triggered local peoples’ disagreement with the project’s continuation.
As complaints about the environmental toll of the power plant from residents and experts mounted, the Pakistani government reviewed its agreement to build damaging coal power plants. Pakistani politicians were aware that the country could generate millions of megawatts by solar, wind, and hydroelectricity. The Pakistani Minister for Planning, Development, and Special Initiatives, Asad Umar, initially supported the CPEC initiative and argued that by utilizing its domestic coal reserves, the country would be able to secure its energy needs. However, the Pakistani prime minister, Imran Khan, disapproved of the continuation of building coal-based power plants and asked the Chinese government to focus their investments on energy production from renewable energy sources.
The CPEC investments are essential for Pakistan’s economic development and for the resolution of its energy shortages. Therefore, the government has continued to accept these investments, despite the public’s concern over their environmental repercussions and the mounting evidence with respect to the Chinese governments’ disregard for the human rights of the Uighurs and other ethnic and religious minorities. Furthermore, China has gained an advantage by using the countries` well established geopolitical characteristics to advance its ambition to become a dominant economic player.