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Haruhiko Kuroda
President
Asian Development Bank

At the
ADB Clean Energy Week
“ADB’s Clean Energy Initiatives”

20 June 2006
ADB Headquarters, Manila, Philippines

Your Excellencies, ladies and gentlemen:

It gives me great pleasure to welcome all of you to Manila, and to ADB’s first ever observance of Clean Energy Week.

The Asian Development Bank is deeply committed to a sustainable future and a cleaner environment for Asia and the world. Our Energy Policy, formally adopted in 1995, recognizes the environmental impact of energy production and use, as well as ADB’s role in helping to mitigate that impact. Our focus this week on clean energy will launch a series of consultations across the region to assess the ongoing relevance of the policy in the context of new challenges and opportunities facing the Asia and Pacific region.

Today, the issues surrounding energy conservation, efficiency and security are more important than ever. While Asia’s rapid growth has brought undeniable benefits to the poor, it has also put a serious strain on the environment and on our natural resources, including energy.

Between 1973 and 2003, Asia’s energy consumption grew by 230%, compared with an average worldwide increase of 75%. As a consequence, the region’s share of greenhouse gas emissions has risen from less than one-tenth of global emissions to nearly one-quarter.

Clearly, Asia needs energy to maintain rapid growth and continue its record of poverty reduction. Indeed, access to energy must be expanded, so that the poor can better participate in the region’s development. But just as clearly, energy production and consumption needs to move to a more sustainable path.

As the region’s partner in development, ADB is actively promoting environmental sustainability at local and regional levels. Among other efforts, we have established several trust funds to support capacity building, institutional development, and project development activities in the areas of renewable energy, energy efficiency, and climate change mitigation and adaptation.

An important objective of this Clean Energy Week is to initiate the Energy Policy Review 2006. ADB’s Energy Policy was last reviewed in 2000. Since then, many developments have taken place. The pace of economic growth in Asia has been tremendous and this has put a lot of pressure for Asian countries to secure their energy supply in order to maintain economic growth. The price of oil has skyrocketed to almost $80 a barrel. This has elevated the need for energy conservation, energy efficiency, and the use of renewable energy as key priorities for developing countries in the region.

Further, climate change is a reality that we can no longer ignore and one that we have to take immediate action to mitigate and adapt to. No region in the world is as critical to future climate change than Asia. ADB has much to offer to our developing member countries to help them invest in cleaner technologies and processes to ensure that we minimize our impact on the environment.

To assess whether we are proceeding in the right direction or a realignment in ADB's energy operation and focus, we propose to review our existing energy policy during 2006-2007. Therefore in the workshop, we have a separate session on "Kick off Consultaiton on ADB's Energy Strategy" in which we have invited experts to discuss what stakeholders are looking for and what are the challenges in formulating a new energy strategy.

The Energy Policy Review 2006 is very important for ADB and we welcome candid and free discussions from you to ensure that our energy policy is relevant, demand-driven, and forward looking.

In July of last year, in response to the Investment Framework by Multilateral Development Banks, we launched an Energy Efficiency Initiative to forge a regional strategy for promoting greater investments and activities in energy efficiency. The goal is to introduce improvements that slow the increase of greenhouse gas emissions without sacrificing economic growth or the standard of living. Under this initiative we expect to provide $1 billion dollars a year for investments in clean energy and energy efficiency, accompanied by new financing instruments to meet the needs of both the public and private sectors.

Phase I of this Initiative – development of the rationale, general principles and priorities – has now been completed. Over the next 18 months or so, we will be working to develop country-level and regional strategies and action plans. We will also pursue immediate energy efficiency investment opportunities over this time period, with a view to fully implementing the strategies and action plans by 2010.

On another front, we are studying a wide range of technical and policy issues relating to clean fuels and vehicles, use of alternative fuels, introduction of fuel economy standards, and measures to induce a shift from private to public modes of transport, to help the region manage its transport-related emissions.

And, we are preparing to launch the Carbon Market Initiative, which provides a unique opportunity for both developed and developing countries to address energy security and climate change.

One of the fundamental barriers developing countries face in adopting cleaner energy technologies is a shortage of adequate finance and capacity. The proposed Carbon Market Initiative, or CMI, will help remove this barrier by providing:

• a Project co-financing facility – the Asia Pacific Carbon Fund;
• a Carbon credit marketing support function; and
• Technical support for project preparation and implementation.

The CMI creates a “win-win” situation both for project developers and sponsors in developing countries, and for carbon credit buyers in developed countries who have made commitments under the Kyoto Protocol. Developing countries will have the upfront financial and technical support they need to get worthwhile projects off the ground. And the buyers of credits will have a much greater incentive to participate in projects with high developmental impact. This is because their risks and costs will be lower, and they will have access to a viable alternative, or complementary arrangements, to existing carbon procurement programs. We believe the CMI will help shift investment patterns, foster sustainable economic development and, in the long term, have a positive impact on both energy security and climate change.

Finally, I am proud to announce that ADB’s Clean Energy Week is a carbon-neutral conference. This means that we have made preliminary calculations on the amount carbon produced by putting on this event. We have calculated the carbon emissions for your share of the flights that each of you took to get here, the emissions from the taxi ride from the airport, the electricity for your hotel stay, the preparation of meals and refreshments, the lighting and air conditioning this room, and so on.

We have tried to minimize the emissions where we can. As you know, we asked you to walk here from the hotel. I am told it takes exactly 208 steps. We have also asked our maintenance people to keep the temperature 2 degrees warmer in this conference room than usual. And we are not printing the presentations or meeting notes – instead, we will make them available on the Internet.

At the end of our 3-day knowledge sharing event, we will finalize our calculations and purchase carbon credits from the market. We aim to lead by example.

We look forward to working with all our development partners to bring concrete, lasting solutions to the table for slowing climate change and ensuring a sustainable growth path for Asia and the Pacific. We welcome candid and free discussions with all of you.

We thank you for coming to Manila and joining us.

Thank you.