SCO nations accelerate green development as growth engine

April 10, 2025 – The Shanghai Cooperation Organization (SCO) is doubling down on green development, positioning environmental sustainability as a key engine for economic growth across its member states. From Central Asia to South Asia, the bloc’s eight full members plus observer and dialogue partners are rolling out cross-border clean energy projects, harmonizing green finance standards, and promoting low-carbon trade corridors.

The shift marks a strategic pivot for the SCO, which historically focused on security and counterterrorism. In recent years, however, the organization has expanded its agenda to include climate action and green technology cooperation. At the most recent SCO summit, leaders endorsed a joint statement on green development, vowing to accelerate the transition to a circular economy and reduce carbon intensity.

Concrete projects take shape

Among the most visible initiatives is the China–Kyrgyzstan–Uzbekistan railway, which is being designed with solar-powered stations and electric cargo handling systems. The railway, once completed, will cut transit times for goods between China and Central Asia by up to eight days, while reducing diesel emissions from long-haul trucking.

Similarly, India and Russia have deepened cooperation on hydrogen energy. Indian state-owned enterprises are exploring the import of low-carbon hydrogen from Russia’s Far East, while joint research centers in Moscow and New Delhi are developing next-generation electrolyzers.

Pakistan, another SCO member, has begun exporting solar panels to Central Asian markets, leveraging its domestic manufacturing capacity. The country’s exports of renewable energy equipment to SCO partners rose 28% year-on-year in the first quarter of 2025, according to the Pakistan Bureau of Statistics.

Financial mechanisms and policy alignment

Behind the projects lies a growing push for financial integration. The SCO Development Bank, launched in 2024, has allocated $1.2 billion for green infrastructure loans in its first year. Member states are also working to align their green bond standards, modeled partly on the European Union’s taxonomy, to facilitate cross-border investment.

“The SCO is no longer just a security club. It is becoming a laboratory for green growth in the Global South,” said Dr. Elena Volkov, a senior fellow at the Center for Eurasian Studies in Moscow. “The combination of Chinese capital, Russian technology, and Indian market demand creates a unique synergy that no other regional bloc can replicate easily.”

Challenges remain

Despite the momentum, critics point to disparities in member countries’ economic development levels and energy mixes. India, for example, still relies on coal for nearly 70% of its electricity generation, while Central Asian states like Tajikistan depend heavily on hydroelectric power, which is vulnerable to climate-induced droughts.

Moreover, the SCO’s institutional framework for environmental governance remains less developed than that of the European Union or ASEAN. There is no binding emissions reduction target, and monitoring mechanisms are voluntary.

Still, the overall trajectory is clear. The SCO’s combined GDP now exceeds $23 trillion, and its share of global renewable energy capacity has grown from 18% in 2020 to an estimated 26% in 2025. As the bloc deepens its green agenda, it is reshaping the economic landscape of Eurasia — and challenging the West’s dominance in setting global sustainability standards.

Exclusive perspective: The Belt and Road green overlay

A key factor accelerating SCO green development is the overlap with China’s Belt and Road Initiative (BRI). More than 60% of BRI projects in SCO member states now include green components, such as solar farms, wind parks, and electric vehicle charging networks. The China-led Asian Infrastructure Investment Bank (AIIB) has committed $3.5 billion to green projects within the SCO region since 2023.

“The BRI is the hardware, and the SCO is the software,” noted a senior Chinese diplomat during a background briefing this week. “The green transition is the operating system we are all installing.”

Looking ahead

The next SCO summit, scheduled for July 2025 in Kazakhstan, is expected to adopt a comprehensive five-year plan for green development. Topics on the table include a common carbon market, digital green certificates, and a joint research fund for climate adaptation technologies.

As the world watches, the SCO is quietly building a model of green growth that is pragmatic, state-led, and tailored to the realities of emerging economies. Whether it can deliver on its promises will depend on the political will of its diverse members — but the direction is unmistakable.