This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
| Paris alignment | Reasoning |
|---|---|
| Unaligned | No shadow carbon price. |
The African Development Bank (AfDB) does not apply a shadow carbon price to any of its investments. E3G understands the bank does not consider this tool to be widely appropriate in an African context. An internal bank report “suggests that for a low-emitting continent like Africa, the Bank should apply a carbon price of $5 per ton of CO2e”.
Recommendations:
We recommend that AfDB:
- Applies a shadow carbon price across all investments.
- Uses carbon price scenarios that are at the highest end of the range of the High-Level Commission on Carbon Prices as a screen for alignment with limiting warming below 2°C. AfDB should also apply a second – higher – carbon price scenario to assess alignment with limiting warming to below 1.5°C.
- Ensure that indirect emissions, even if not directly controlled by the project (Scope 3), are included. Their inclusion can substantially change the assessment of the environmental impact and thus are material to investment decisions.
- Clarify the procedures on how the shadow carbon pricing is applied to decision making. This includes disclosing which discount rates are used for country categories, alongside the rationale and evidence for such rates.
Last Update: November 2020