The Asian Development Bank (ADB) has the potential to become Asia’s ‘climate bank’ with energy policy review serving as key opportunity for progressive climate policies in Manila-based institution, new E3G briefing reveals. South East Asia, with Vietnam, Indonesia and the Philippines in particular, is key battleground for climate mitigation in Asia-Pacific region. ADB could lead the way by driving the transition to a climate neutral economy in these countries.
Multilateral development banks, including the Asian Development Bank, are going through a process of aligning their lending with the Paris Agreement on climate change. A new E3G briefing outlines how the Asian Development Bank could do this to become Asia’s leading climate bank. The briefing recommends the bank set a new target for all energy lending to be zero-carbon, a more ambitious “stretch” climate finance target, a new energy efficiency lending target and exclude natural gas from the definition of ‘clean energy’.
Top three recommendations for the Asian Development Bank‘s energy policy review
- Set a target date for 100% of ADB’s energy lending to be towards zero carbon energy projects, phasing out lending to unabated fossil-related projects
- Make energy efficiency an infrastructure priority and set a specific energy efficiency lending target
- Define a specific action plan to support countries in implementing and raising the ambition of their Nationally Determined Contributions under the Paris Agreement.
South East Asia presents both the biggest risk of carbon lock-in and the biggest opportunity for green investment in sustainable technologies and is therefore a key frontline in the global energy transition. The briefing provides input for the energy policy review due to be published in 2020 and for the bank’s work in Indonesia, Vietnam and the Philippines.
Nithi Nesadurai, Regional Coordinator, Climate Action Network South East Asia said:
“Climate-related finance is key to enabling developing countries to make the shift to a climate-resilient low-emissions development pathway. While noting that trillions of dollars in investment are required for this to happen, it can be catalysed by shifting financial flows away from high carbon intensive projects. In this regard multilateral development banks such as the Asian Development Bank can play a more prominent leadership role. Research which highlights how multilateral development banks can do so is central to this effort. Climate Action Network Southeast Asia welcomes the study by E3G.”
Claire Healy, Programme Director, Climate diplomacy, risk and security, E3G said:
“Becoming Asia’s climate bank could become a core part of the Asian Development Bank’s future strategy. Net-zero emissions need to be the new norm for the region and bundling new financing for energy efficiency, renewable energy and storage could displace fossil fuels. Indeed, this is the only way a development bank can do development in a carbon-constrained world.”
“Current President Takehiko Nakao’s term is set to end in November 2021. It is essential that his successor continues to drive the Asian Development Bank towards this vision of a climate bank.”