Focus on Arts and Ecology

As subsidies for renewables are phased out, market distortions mean renewables still can’t stand on their own feet, writes Zhang Shuwei. 

By Zhang Shuwei, February 25, 2026

Since implementing its renewable energy law in 2005, China has been rapidly rolling out wind and solar power – from 10 gigawatts (GW) per year early on to over 430 GW last year. The country now has about 1,840 GW of installed capacity, forming more of the power capacity mix (47.3%) than that derived from fossil fuels.

China’s new climate action plan, submitted to the UN last year, includes a target to almost double capacity to 3,600 GW by 2035. That would go far beyond what any other country has or aims to have. To achieve it, China must continue building and connecting renewables to the grid at pace.

Many think that the rapidly falling cost of installing renewables and improving technology means the sector can already compete on the open market. But as the share of renewables in China’s electricity mix keeps rising, generators are having a tougher time. They are dealing with fluctuating earnings, difficulty getting hooked up to the grid and low average prices for their output.

Amid these challenges, can renewables win sufficient revenue and investment to drive expansion and add the 200 GW or more of capacity required every year to achieve China’s target? Let’s take a look.

The new pricing system for supporting renewables

Reaching 3,600 GW very much depends on a document produced last year by China’s economic planning body, the National Development and Reform Commission.

Document 136 provides the top-level policy design for China’s energy transition. It includes so-called market mechanisms to promote the consumption of renewable power and consistent investment, laying the foundation for a new electricity system.

The document requires provincial governments to set up price-guarantee mechanisms for new wind and solar projects. These are similar to the contract-for-difference (CfD) systems used overseas. CfD systems mitigate the wide price fluctuations in electricity spot markets that give generators unstable incomes and scare off investors.

Under such a system, renewable generators bid against each other to supply electricity to the grid at a fixed “strike price”. When market prices fall below that price, which is set annually, the government pays the generator the difference. When market prices exceed it, the generator pays back the surplus.

These CfD mechanisms had been put in place by the end of last year. They spelled the end of feed-in tariffs, feed-in premiums, or benchmarking against coal power prices, and the start of a centrally led but locally determined system for price setting.

But the new rules have not straightforwardly stabilised generators’ income or given investors certainty on returns.

In Europe and the US, CfDs usually cover all electricity generated by a project. In China, to keep more control over profitability, most provinces are underwriting only some of the generation – between 40% and 80%. The remainder of a project’s income is subject to market fluctuations.

In one sense, the CfD mechanism resembles the “capacity payments” that some coal-power generators receive for standing idle, ready to produce power if needed to meet peak demand. That is, both are annual risk-free payments proportionally linked to a power plant’s rated capacity. 

China’s whole power system is shifting to capacity payments

Renewables aren’t the only form of generation being underwritten. China has rolled out capacity payments for several types of generation.

A system for pumped hydropower – a form of energy storage – was put in place in 2021, with payments in the region of CNY 500 (USD 72) per kilowatt per year made to 48 pumped hydro stations.

For “new-type” storage, which largely means battery storage, some provinces are paying between CNY 100-250 per kilowatt per year, with a national system for capacity payments implemented in early 2026.

For coal power, a 2023 document set fees at CNY 330 per kilowatt per year.

For gas, decisions on capacity payments have always been devolved to provincial governments, with provinces such as Guangdong and Jiangsu setting clear capacity-payment or subsidy standards.

China’s electricity system is clearly shifting from paying for electricity generated to paying for the capacity to generate it.

The CfD mechanism involves new wind and solar in this broader capacity-based subsidy system. In effect, the government is providing renewables facilities with a stable annual income, rather than them relying purely on market price signals.

Will income levels enable long-term expansion?

There are major differences in the amount of income support renewable generators receive across China’s regions. Judging from the strike prices and kilowatt-hours of power covered, wind power can cover its capital costs in most provinces. But returns on solar power in western provinces have reached the edge of, or even fallen below, the threshold of profitable investment – mainly due to lower than expected prices.

The support itself is also not consistent over time. Strike prices and covered quantities are set annually. While spot market prices change on a shorter timescale. Central government policy usually works on a five-year cycle. While provincial implementation of that policy adjusts annually. And electricity trading and settlement – meaning billing and payment – works to a monthly schedule.

In practice, monthly settlement means annual CfD-covered quantities must be artificially divided across the 12 months and settled at the monthly price. The actual subsidies projects receive are impacted by the changing monthly average of spot market prices, with generators giving up or receiving income depending on that average.

Subsidies are paid for by commercial electricity users as part of a “system operational fee”. Local governments, however, have concerns about the magnitude of the subsidies, and so the balance of the subsidy account influences how covered quantities are set in future.

Wind and solar projects require huge up-front investment, and their profitability and success relies on long-term stable cashflow. If electricity prices, covered proportions or settlement rules change frequently, investment risk quickly increases. That means higher financing costs and so less investment.

In theory, electricity spot prices should reflect the balance of supply and demand, but also send a signal to long-term investors. Under China’s current system, these prices are used more to recover costs and implement policy. Dispatch discretion, price ceilings and floors, and off-market interventions (including directed dispatch and off-market arrangements) make market prices lower than needed for long-term returns on investment.

As a result, renewable generators may still not be able to stand on their own two feet. They need to be supported by the new pricing mechanism as subsidies are phased out. Wind and solar power prices are still largely set in line with their costs, rather than the market price.

The issues of low prices and wasted generation

The part of a project’s generation not covered by the CfD mechanism can still be sold, via the spot market or through longer-term contracts. But that is limited as electricity markets are currently somewhat fragmented and distorted, plus there is not enough liquidity across markets in various time segments. Prices on short-term markets often drop the closer they get to real-time trades.

In Shandong, Zhejiang and Sichuan, the average electricity spot market price is significantly lower than the coal-power reference price, and close to zero when solar power generation is peaking. This price structure doesn’t reflect the actual “marginal costs” in the system but does significantly increase uncertainty for renewable generators. (Here marginal costs means the cost of the final unit of electricity needed to meet demand, which usually comes from a coal power plant when demand is high.)

That exposes uncovered generation to low and unstable prices, putting overall return on investment at risk.

As more renewables come online, wasted generation, or “curtailment”, is becoming a bigger problem, rising particularly in north-western China. According to reports, curtailment rates in Gansu are over 30% for solar and even higher for wind. The CfDs of Document 136 are closer to a “price guarantee, with conditions”: the guarantee only comes into play if a project is hooked up to the grid and actually generating power. It can’t provide discipline for electricity curtailments.

Rule restrictions behind the boom

Even with wind and solar generation costs having fallen significantly, China’s renewables remain highly reliant on predictable cost-recovery mechanisms.

In Europe and the US, market pricing is used to complete short-term clearing and is key to balancing real-time supply and demand. China’s electricity system, by contrast, has long regarded prices as a cost-recovery tool. This significantly weakens competition, and means the scale and structure of investments are made within a very policy-driven framework.

Achieving the 3,600 GW target on time will ultimately depend on whether local governments are willing and able to set CfD proportions at levels that ensure new projects can recover their costs.

Zhang Shuwei

China-backed projects are helping smallholders with their yields as the climate changes, but the partnerships are also raising harder questions. 

By Duncan Mboyah, February 17, 2026

Many Kenyan farmers work fertile land close to fast-growing urban markets. But they are struggling as rainfall gets less predictable, heat stress rises and pests and diseases spread.

For smallholders, a single outbreak can wipe out years of savings. While for policymakers, each failed harvest carries reputational consequences.

Into this uncertainty has stepped a growing number of external partners offering technical fixes, with China now among the most visible. Across Kenya, Chinese companies, universities and development partners are backing projects that promise climate-resilient crops, reduced losses and steadier incomes.

Some farmers say the resulting improvements are tangible. The wider implications, however, are more complex. Bringing in new technology can strengthen local capacity but also entrench reliance. And for countries trying to build their own agri-tech ecosystems, important questions shadow the success stories: is progress sustainable and will the benefits be fairly shared?

A greenhouse bet in the Rift Valley

Benard Koech’s greenhouses sit on a small plot in Keberesit village, south-western Kenya. Inside, rows of tomato plants climb neatly toward the light. The setup looks relatively modern with plastic sheeting, drip irrigation lines, careful spacing. But the core innovation is less visible: each plant is built from two Chinese varieties joined by hand.

Koech, 28, tells Dialogue Earth he began growing tomatoes outdoors in 2020 as a pastime, after graduating in agribusiness management from Kenya’s Machakos University. About 95% of Kenya’s tomatoes are grown in open fields.

He has benefitted from a pilot programme to support rural youth to grow grafted tomatoes around Nakuru county, about 160 km north-west of Nairobi. The programme, a collaboration between China’s Nanjing Agricultural University and Kenya’s Egerton University, is about improving responses to disease and climate stress.

Stories like Koech’s are often presented as evidence that “South-South” cooperation between Global South nations can deliver practical solutions where traditional aid models have struggled. In Kenya’s case, the claim is that farmers are not only receiving inputs, but also learning techniques to manage climate shocks more effectively.

In this instance the technique involves joining the shoot, or scion, of a high-yielding but disease-prone tomato variety with the rootstock of a more resilient one. The aim is to keep producing desirable fruit while strengthening resistance to pathogens and water stress.

Joshua Ogweno, an associate professor of horticulture at Egerton University, says the tomato-grafting project emerged after bacterial wilt devastated tomato production in parts of the Rift Valley.

The wilt “spread like bush fire in the region as a result of climate change”, he says, adding that the grafted tomatoes have reduced crop losses by 80%.

The grafting is done at Egerton University and seedlings are then sold in agricultural supply shops. The plants can be harvested continuously for up to eight months, Ogweno says, compared to a roughly two-month harvesting window for ordinary plants grown in open fields.

Ogweno points to broader capacity-building outcomes. Since 2018, more than 1,100 “agricultural extension officers” – who teach farmers modern techniques – have received training on managing bacterial wilt and related threats, he says.

If these gains hold at scale, the implications are significant: fewer crop failures, less pesticide use and more predictable incomes. But success at pilot level does not automatically translate into long-term resilience. Greenhouses depend on imported plastic, fittings, irrigation systems and technical know-how, all of which carry costs, potential environmental risks, and risks if supply chains falter or funding ends.

Hybrid fodder grass and seedlings gain traction

Chinese involvement in Kenya’s agri-tech space is not confined to public-research partnerships. Private companies are also expanding their footprint.

Juncao grass is a hybrid fodder crop introduced in 2021 by Chinese entrepreneur Jack Liu. Grown in Kenya, it is resilient to drought and grows faster than normal Napier grass. Mwangi Kinyanjui, a lecturer in natural resource management at Kenya’s Karatina University, says the grass “has double protein”. He calls it “a saviour for livestock farmers who are witnessing low production of milk”.

However, juncao is grown on some of the most fertile arable land in Kenya, in Nakuru county, putting it in potential competition with staple food production.

Juncao has not solved Kenya’s persistent livestock feed shortages, since the majority of livestock farmers today import feeds from neighbouring Uganda.

“Technology transfer in agriculture can offset many problems that are affecting farmers, but the knowledge of the technology is still low,” Kinyanjui adds.

For farmers facing climate stress, speed matters. New varieties that establish quickly can mean the difference between survival and collapse. But rapid uptake also raises ecological questions about introducing new crops at scale, and whether local plants and seed systems are being strengthened or sidelined.

Boson Agri Ltd, which operates farms in Kenya, Zambia and Tanzania, supplies hybrid seedlings across the region. Leon Qu, the company’s chief executive, says: “We produce virus-free seedlings that reduce diseases and make seedlings and crops stable during dry seasons.”

For farmers, hybrid seedlings can sharply reduce risk. For policymakers, they raise familiar development questions: who controls seed systems, who captures value along the chain, and can domestic breeding and manufacturing capacity keep pace?

John Macharia, Kenya country director for the Alliance for a Green Revolution in Africa (AGRA), says partnerships that expand access to technology are urgently needed.

“Kenya has limited and unaffordable technology while climate change continues to affect farm production in the country,” he tells Dialogue Earth.

That reality explains the appeal of Chinese collaboration. But reliance on external solutions can deepen vulnerabilities if local institutions are not strengthened alongside them.

The trade imbalance behind the rhetoric

Kenya-China agricultural cooperation is unfolding against a starkly uneven trade relationship. In the first half of 2025, Kenya imported goods worth about KES 500 billion (USD 3.9 billion) from China, while exporting just KES 4.5 billion (USD 34.9 million), according to Guo Haiya, China’s ambassador to Kenya.

Guo argues however that, thanks to recent policy changes, African agricultural products are gaining better access to Chinese markets.

China has stated it will expand its tariff-free trade arrangements so all products from all 53 African countries it has diplomatic relations with can enter China without tariffs. This would make African products more competitive on the Chinese market.

“With the new zero-tariff arrangements, products such as Kenyan avocados, Zimbabwean blueberries, Ethiopian coffee, Ghanaian cocoa, and Tanzanian cashew nuts will enjoy easier and more competitive access to the Chinese market,” she told Dialogue Earth during the Africa International Agricultural Expo held in Nairobi in October 2025.

But market access alone does not guarantee exports. Cold storage, logistics, quality standards, financing and reliable production remain major barriers. These constraints have long limited African agricultural trade.

African countries can learn from China’s experience but only by adapting it, says Bob Wekesa, director of the African Center for the Study of the United States, at the University of the Witwatersrand in Johannesburg.

“China has done well in transforming production of tea and bamboo through the use of agricultural technology, something that African farmers can also borrow to benefit fully in balancing its trade with the Chinese,” he says.

He adds that persistent policy and implementation failures have constrained Africa’s agricultural potential. Progress requires planning across the entire value chain, from land preparation to storage and market access, he says.

No silver bullets

For Gordon K’achola, founder of the Africa Center for Diplomatic Affairs, the risk lies in overselling technology as a cure-all. Chinese partnerships, he says, are often framed as solutions to food insecurity while ignoring deeper structural issues in host countries.

He argues that China, like any external partner, benefits primarily through trade, while outcomes for smallholders depend on how African governments integrate new technologies into local value chains.

Without supportive credit systems, extension services and accountability mechanisms, he adds, technology transfer alone will not correct trade imbalances or transform rural livelihoods.

China, K’achola notes, provides financing, equipment and training as part of its broader cooperation agenda. Whether those inputs translate into durable benefits ultimately depends on domestic governance.

Duncan Mboyah

A series of new guidelines aim to standardise and mainstream ESG reporting by Chinese mining companies, but gaps remain. 

By Jiang Mengnan, Tom Baxter, February 16, 2026

On 1 December 2025, the Chinese Mining Association released two documents to guide mining companies on their environmental, social and governance (ESG) performance.

Though voluntary, they are the first attempt by a Chinese industry body to standardise ESG practices in the Chinese mining sector.

The sector includes some of the world’s largest mining companies, which are widely involved in extracting critical minerals. The environmental and social impacts of these minerals are currently poorly governed. A number of them are central to the global transition away from fossil fuels, due to their use in renewable power equipment and electric vehicles.

The documents, which cover information disclosure and governance capability, could affect Chinese mining companies’ operations both at home and abroad, experts and industry representatives have told Dialogue Earth.

Aligning Chinese and international norms

The first guideline document lays out principles for ESG disclosure, and provides a detailed structure for reporting. It uses a four-tier system of indicators, from broad themes down to 115 granular metrics, to guide companies on what information to disclose and how.

The second offers a way to rate companies’ ESG governance, with scores ranging from C to AAA, creating a benchmark for comparing how well companies manage sustainability.

They were launched by the Chinese Mining Association (CMA) and primarily drafted by the Development Research Center of the China Geological Survey (CGS). According to the documents, which are not yet publicly available, a wide range of voices were consulted during their creation, including government research bodies, leading mining companies, and investors who contributed insights both as stakeholders and as users of ESG data.

Sun Renbin from the CGS is lead contributor to the new standards. He tells Dialogue Earth they were developed in the context of rising ESG requirements both internationally and domestically. He mentions the EU’s 2022 and 2024 directives on sustainability reporting and supply chains, which have made sustainability disclosure mandatory.

“The international ESG ratings of Chinese mining companies show weakness – around 80% are rated as industry laggards by agencies such as MSCI, limiting their access to global capital,” Sun explains, referring to Morgan Stanley Capital International, a leading provider of financial information.

“At the same time, China has rolled out its own national frameworks for sustainability reporting, and mining companies are increasingly expected to adapt,” he says.

Sun notices differences between how Chinese companies and international ratings agencies understand ESG and the frameworks they use to codify it.

Up until now, the most prominent environmental concept that Chinese mining companies have been encouraged to focus on has been “green mines”. In 2017, China issued an implementation plan for green mines, and later provided a detailed scoring framework. The system is primarily environment-focused but does include a limited number of social and governance-related elements, such as indicators on community relations and poverty alleviation. China had established more than 5,100 green mines at the provincial level or above by November 2025, according to Xinhua.

Because of the framework’s environmental focus, it fits poorly with global ESG standards, leading to “the risk of misinterpretation by global rating agencies”, Sun explains. “One of the key motivations behind developing the new standards is to align more closely with international norms.”

Progressive or performative?

Deng Yaowen, an independent ESG consultant, says the CMA’s guidelines are a “very positive development”. He notes that the documents largely align with international ESG frameworks used in mining.

“They appear to cover most of the key material risks people would expect to see, from climate and tailings, to safety and community issues,” he tells Dialogue Earth.

Chen Yu, senior China advisor at Global Witness, tells Dialogue Earth the new guidelines represent China’s first ESG disclosure framework specifically for mining.

“They turn the Ministry of Finance’s national sustainability principles into practical, sector-level guidance,” she says.

“For mining companies, these two sets of standards hold much significance,” says a representative from the ESG office of Zijin, one of the world’s top three multinational metals mining company by market capitalisation. “They … put forward relatively complete framework requirements for ESG information disclosure and governance capabilities.”

Chen highlights the attention the guidelines pay to social issues, which is progressive in the Chinese context. “The standards require companies to promptly disclose major ESG events to all stakeholders, including local communities,” she explains. This goes beyond both the Ministry of Finance’s 2024 Corporate Sustainability Information Disclosure Principles and existing guidance from China’s stock exchanges, she notes.

However, Deng Yaowen says the guidelines’ focus show that many Chinese mining companies are still early in their ESG journey. “The emphasis seems [to be] very much on whether management systems and policies are in place, and on the quality of information disclosure, rather than on evaluating outcomes on the ground,” he says.

He adds that while the standards could provide a foundation for more constructive dialogue with civil society, they “have limits in showing the real-world impacts of mining operations”.

Deng says there is an increasing expectation internationally for mining companies to carry out regular risk-based ESG assessments at the site level, and communicate important findings to key stakeholders, including affected communities and civil society groups. He pointed out that many mining-related ESG risks are long-term and cumulative, and understanding them often requires being on the ground and having genuine conversations with affected stakeholders.

Towards international best practice

Chen adds that the guidelines align closely with the mining standard of the Global Reporting Initiative (GRI). Known as GRI 14, this is considered the world’s leading standard for ESG in the mining sector. However, gaps remain in the Chinese guidelines’ coverage and depth, especially regarding local communities. “GRI 14 requires detailed reporting on both positive and negative impacts on local communities, whereas the Chinese rules do not explicitly distinguish between these,” she explains.

She also notes that while the Chinese rules recommend disclosing community-complaint mechanisms and the frequency of communication, they lack GRI 14’s level of detail. That includes grievance data such as the percentage addressed and resolved, site-level health and safety impacts, and agreements on community development. Chen further highlights the absence of guidance on Indigenous peoples, reflecting China’s cautious use of the term in regulatory and industry contexts.

Zijin’s representative also notes slight discrepancies between the guidelines and international standards relating to differences in context. “While they share common principles such as governance accountability and continuous improvement, differences remain in the practices of certain topics, particularly social issues like human rights and community engagement. This partly reflects differences in [national and economic] development stages, values and cultural contexts between China and the west.”

He adds that the guidelines offer a “clear starting point” for which Chinese mining companies can build their ESG governance and disclosure systems. “However, companies with international operations will need further alignment with international disclosure standards and rating frameworks to meet the expectations of wider stakeholders.”

Going global

Chen Yu says the CMA’s guidelines are notable for addressing Chinese mining companies’ overseas operations, providing clear guidance on reporting local impacts and related actions.

Chinese miners are increasingly expanding into global markets. As of end-2025, Zijin Mining has operations in 15 countries outside of China. Other major players include CMOC Group, the world’s largest producer of cobalt, and Ganfeng Lithium, the world’s third largest lithium producer, with operations in Australia, Argentina and Mexico. Demand for cobalt and lithium, for use in batteries and other electronic and industrial goods, is booming due to energy transitions around the world.

The Zijin representative says that for Chinese companies investing overseas, the guidelines offer a number of benefits. Firstly, they can help companies steer their way through global ESG requirements, which are increasingly important for securing finance and project approvals.

Secondly, they can help companies manage project risks at an early stage. If left unaddressed at the outset, ESG issues can quickly escalate into systematic risks, he emphasises.

Lastly, they will help transform Chinese companies operating overseas from “participants in compliance” to “partners in responsible development”, the representative says.

Further momentum

On 30 December, a third set of guidelines relating to environmental and social impacts was released. This one came from China’s Ministry of Commerce (Mofcom), a central government body with much greater power than the CMA.

The guidelines, which relate specifically to Chinese companies’ overseas operations, break down responsibilities regarding support for economic development, improvement of livelihoods and social cohesion, environmental protection and green transitions, as well as the promotion of “healthy and sustainable development”.

Under the environmental section, the guidelines highlight the need for mining companies to improve environmental protection standards, encourage recycling and low-carbon technologies, and implement ecological restoration.

Global Witness’s Chen Yu sees Mofcom’s guidelines as “a positive signal of a regulatory tendency … ‘testing’ China’s green mining practices overseas”.

She cautions that they lack enforceability, however – a weakness we have seen across Chinese government attempts to strengthen the environmental and social credentials of companies’ overseas operations.

Jiang Mengnan

Jiang Mengnan is the strategic communications officer at Dialogue Earth, based in London. She joined in 2022 and is also a journalist specialising in sustainable finance and ESG development. She used to work in ESG consulting and communications in both private and non-profit sectors, and holds the title of Certified ESG Analyst (CESGA) from the European Federation of Financial Analysts Societies (EFFAS).

Tom Baxter

Tom Baxter is project manager for Dialogue Earth’s global China and learning programme, based in London. He joined the organisation in 2018 and was based in Beijing until 2022. Tom holds an MA in history from the University of Glasgow and an MSc in economic policy from SOAS, University of London. He worked in China for a decade and speaks and reads Chinese. Tom’s interests include the interactions between climate and development, China’s role in global development and environmental governance, and socio-economic issues such as industrialisation, migration and labour.

(Sources: Dialogue Earth)

Development projects globally must answer a burning question as rising temperatures threaten workers’ health and productivity, write three academics. 

By Jiayong Liang, Maria Adele Carrai, Xiaojiao Wang, February 18, 2026

In December 2022, fireworks lit up the sky over Lusail stadium, north of Doha. At the centre stood Lionel Messi, arms raised, World Cup trophy in hand, as thousands celebrated around him. It was a moment of triumph for Messi, for Argentina and for Qatar, the first Middle Eastern country to host one of the world’s most iconic sporting events.

Qatar had won the bid in 2010. In the 12 years that followed, the country underwent an infrastructural transformation. Stadiums rose from scratch, highways were laid, hotels reshaped the skyline. A nation readied itself to be seen.

And yet, as the World Cup unfolded, another group became impossible to ignore. Not those inside the stadium that December night, but those who had built it. Hundreds of thousands of migrant workers who had laboured under a desert sun worsened by climate change. Many died. They showed what extreme heat can do to those who construct the world’s grandest visions.

This is more than a cautionary tale. It is a glimpse into a future where extreme heat disrupts labour forces, reshapes economies and challenges the very foundations of global infrastructure development schemes.

One such scheme is the Belt and Road Initiative (BRI) launched by China in 2013.

The scale is clear. Thus far, China has allocated around USD 1 trillion in loans and investments to BRI projects, including power plants, railways, ports, telecommunications networks, and other large infrastructure developments. But what is also clear is that the BRI is unfolding in some of the world’s most heat-vulnerable regions, spanning Africa, South Asia, and the Middle East.

Many nations along these corridors already struggle with fragile infrastructure and limited resources to combat climate shocks. As the heat intensifies, the cost of strategies to keep workers safe – cooling systems, adjusted work schedules, reduced hours – will rise, straining the very projects meant to drive economic development.

Construction, agriculture and extraction depend on long hours of outdoor work. Yet our modelling suggests that by the end of the century, heat stress could reduce feasible working time by up to 25% in the worst-affected sites.

Because much of the BRI is financed through long-term loans that mature decades after completion, these chronic hits to output can translate into weaker cash flows and delayed repayment. The economics of labour-intensive projects could be undermined by the rising cost of keeping workers safe.

Such pressures raise a critical question: Can China’s BRI remain financially and operationally sustainable under intensifying heat stress? As temperatures climb, so too does the likelihood of the answer being no.

Rising temperatures push down productivity

We have modelled two possible futures. The first follows a low-emission pathway, where aggressive climate action drives global CO2 emissions to net zero by around 2075. The second envisions a world without effective climate policies, leading to a medium-to-high emission trajectory.

The contrast between these scenarios is stark.

Under the high-emission pathway, labour productivity could plummet by more than 30% in some regions by the late 21st century. Productivity losses in industries such as agriculture and construction could be three times greater than in a low-emission future.

Desert coal miners face an uncertain future

Take the Thar Desert in south-eastern Pakistan, a region with relentless heat, minimal rainfall and land too parched for cultivation. Here, amid the sand and the dust, lies one of the world’s largest lignite coal deposits.

In 2014, the Engro Thar coal power project (Thar-II) was launched to help alleviate Pakistan’s chronic energy shortages. This cornerstone of the BRI’s China-Pakistan Economic Corridor was completed five years later, but now faces a future increasingly imperilled by rising temperatures.

Our model shows that if emissions continue on a medium-to-high scenario, labour productivity at the Thar Engro project could drop by nearly a quarter. This will mean about three months of lost work each year by 2100, as rising heat makes it harder for workers to endure long hours outdoors.

For those who call the Thar desert home, life has always been precarious, dependent on the success of an unpredictable monsoon. Locals rely on rearing livestock and seasonal agriculture. Women walk miles to collect water. And a single failed monsoon can mean acute fodder shortages for livestock. In this world, the promise of a stable job offers a way out of the cycle of drought.

Since operations began in 2019, drawn by this promise, young men have flocked to the open-air Thar mine, working even during the hottest part of the day. Last summer, temperatures reached 44C at the nearest official weather post to the coalfield – the Chhor station in eastern Sindh, on the edge of the Thar region. That reading, from 12 June 2025, captures only the ambient air temperature; wet-bulb conditions at the open-pit mine, factoring in humidity and direct sun exposure, would be considerably more punishing for workers on shift. The relentless heat blurs the line between economic opportunity and physical peril.

In the Thar Desert, heat shapes how the mine operates. Reporting from the site by media outlet Dawn describes a workday structured around peak temperatures, including long pauses in the middle of the day. One driver told Dawn his dumper cab is air‑conditioned and noted strict safety protocols, including carrying water.

Such adaptations – adjusted shifts, cooling infrastructure, hydration protocols – are the minimum required to keep operations running. But they add cost, and if temperatures continue to climb, they raise hard questions about the long-term financial viability of coal mining in one of the hottest places on Earth.

Adaptation, transition and greening BRI

While coal remains central to Pakistan’s energy strategy, the escalating burden of climate adaptation signals a pressing need to rethink the country’s reliance on fossil fuels. The Thar region faces a dilemma: whether to continue exploiting one of the world’s largest lignite deposits or to accelerate a transition toward cleaner, more sustainable energy sources.

Coal burning causes an estimated 1.1-1.3 million global deaths annually from pollution, with women and children living near coal mines being particularly vulnerable due to soil and water contamination. Worse still, Thar’s lignite, has a lower heating value than many other types of coal, so more must be burned to generate the same amount of power, meaning higher CO2 emissions.

Global momentum is also shifting toward just energy transitions, with many countries and regions actively moving away from fossil fuels. China, too, has pledged to build a greener Belt and Road. Our research adds another crucial reason to support this transition: unless emissions are curbed quickly, rising temperatures could make regions like Thar too hot for workers to operate safely.

For policymakers and investors, this underscores a broader reality: climate risk must be integrated into every stage of major project planning. Without substantial investment in resilience strategies, these projects face significant risks to their sustainability and profitability. Climate-conscious infrastructure, improved building codes, and disaster-resistant design are increasingly essential.

The Thar coal power project serves as an urgent reminder that infrastructure built today must be resilient enough for the climate of tomorrow. By embracing green technologies, strengthening adaptive infrastructure, and reforming unsustainable practices, the BRI has an opportunity to not only survive climate risks, but to lead the way toward a more resilient and equitable future.