Finance fishing boats

Holistic and tailor-made solutions put a safer climate at your fingertips

As the world continues to transition to cleaner, renewable approaches to climate and energy, the ways in which progress will be planned and paid for becomes clearer. While some people left COP26 disappointed with the progress made, key executives that took shape in Glasgow in the crucial area of ​​climate finance show how words can be turned into action.

Tangible progress will not come too soon for our region. Many small island states with unique and dispersed geography and marine ecosystems – many of which rise a few meters above sea level – are clearly in existential danger. Each year, extreme weather conditions across Asia and the Pacific cause death, destroy infrastructure and disrupt economies. In the Philippines, damage from extreme weather conditions and disasters reached the equivalent of $ 9.3 billion between 2010 and 2019. Meanwhile, our region now accounts for about half of all global gas emissions. greenhouse effect and is home to 865 of the approximately 1,000 coal-fired power plants in use worldwide.

As the climate bank of Asia and the Pacific, the Asian Development Bank (AfDB) works to help developing countries bring together three essential elements in the effort to mitigate and adapt to climate change. : technical solutions that help green their economies; expertise and ability to adopt a “global economy” approach; and financial resources for the transition to more sustainable infrastructure. This holistic vision covers everything from expanding literacy and climate training to sharing knowledge and a spirit of innovation to help prepare locally appropriate solutions.

So how can countries respond to rising sea levels, frequent disasters and dangerous pollution? Consider the electricity sector. The solutions to the challenge of generating enough energy to meet growing demand while tackling climate change will be different for each country. An alternative mix of renewable energies – whether wind farms or solar parks – can be added to cleaner hydropower or geothermal production and contribute to the energy transition. It all depends on what is available.

But in all countries, the focus will be on designing impactful, climate-aligned programs and investments, linked to broader national development strategies that steer them towards more ambitious goals under the Paris Agreement. To develop these investments, it is first essential to assess the feasibility of technical solutions to climate change development projects and to use the results to define an appropriate set of loans, grants and guarantees.

Technical assistance is essential for each country to meet its climate goals and remains a key part of how the AfDB will provide assistance. In the electricity sector, access to technical expertise can help improve understanding of complex problems, raise awareness of potential solutions and support the transfer of new technologies that allow better access to electricity. while promoting the transition to clean energies. This is essential in a region where 350 million people do not have reliable access to energy and 150 million people have none. Capacity development is also essential to help countries formulate approaches for a just transition through skills training and social development, so that new investments do not disrupt income growth or safety nets for the most vulnerable. .

We will also work with partners and clients to develop new ideas that protect the environment and livelihoods. For example, across Asia and the Pacific, vulnerable coastal wetlands are also essential sources of income. In Bangladesh, Indonesia, the Philippines, Thailand and Viet Nam, more than 1.5 million people work in artisanal fisheries. One study estimated that in the People’s Republic of China and the Philippines alone, investing in climate-resilient coastlines saves an estimated 2,000 lives and $ 200 billion annually by preventing flooding. By avoiding conventional dikes and instead adopting climate-friendly approaches to contain surges and floods, we are also protecting economies and jobs.

A climate bank like AfDB can rely on its strong balance sheet and high credit rating to pass on competitive lending rates and longer maturities to help finance such important efforts. We can also use several financing instruments, including guarantees, to mobilize resources and act as an important intermediary for co-financing.

Ultimately, however, our role is distinguished by a pipeline of bankable climate change projects with initial due diligence, pre-feasibility, and other groundwork. Our projects evolve through careful structuring to ensure that economic and financial returns generate income, improve the well-being of ordinary people, and may even attract commercial funding. The AfDB is committed to increasing its own allocation of climate finance to a total of $ 100 billion from 2019 to 2030 and to fully align its operations with the Paris Agreement by 2025.

During COP26, the AfDB, together with our partners, launched several important initiatives for Asia and the Pacific. One, the Southeast Asia Energy Transition Mechanism Partnership, created with Indonesia and the Philippines, will use public-private funding to accelerate the phase-out of coal-fired power plants and unlock energy investments. clean and renewable as a replacement. Another, the Climate Action Catalyst Fund, will help developing economies join international carbon markets under the Paris Agreement. These initiatives should lead to faster decarbonization of our region and increase funding to help our developing member countries meet and exceed their Nationally Determined Contributions.

Frameworks and planning of this nature often fail to take center stage. But each smart initiative – and the thinking and capacity support behind them – shows how the large-scale climate solutions we now urgently need across Asia and the Pacific will take shape as we move forward. the decade advances. By approaching each challenge holistically, we will achieve our goal of a healthier environment, with healthier economies to match.

Mr. Bambang Susantono is AfDB Vice President for Knowledge Management and Sustainable Development