Climate Change: Finding Solutions

Countries in Asia and the Pacific need help in their efforts to slow climate change and adapt to its impacts. This includes grants and low-interest loans, as well as partnerships that mobilize money from governments, organizations and private companies.

Climate change is among the critical issues facing countries in Asia and the Pacific. Rising sea levels, extreme weather events, and fluctuations in temperature and water supply threaten lives and livelihoods in the region. Even the cities of East Asia’s powerhouse economies are at high risk. At the same time, the region's share in worldwide greenhouse gas emissions has been rising. Read the Economics of Climate Change in East Asia.

It is estimated that all developing countries need between $140 billion to $175 billion per year for climate change mitigation. For adaptation, developing countries in Asia and the Pacific alone require $40 billion annually.

Mobilizing resources

Over the last 2 decades, ADB has established dedicated financing and leveraged additional sources of funding for addressing climate change in the region.

In 2013 alone, ADB approved $3.4 billion in climate change financing, providing $2.9 billion from its own resources and $435 million from external resources, including multilateral climate funds and trust funds.

In response to increasing global attention and call to action to address climate change after the Kyoto Protocol entered into force in 2005, ADB stepped up action on climate change financing, policies, and investments. It established major funding facilities, such as the Clean Energy Financing Partnership Facility ($295 million) and the Climate Change Fund ($59 million).

In 2013 alone, ADB approved $3.4 billion in climate change financing, providing $2.9 billion from its own resources and $435 million from external resources, including multilateral climate funds and trust funds.

As of 31 December 2013, the Clean Energy Financing Partnership Facility has supported 111 projects amounting to $108.2 million and covering 34 developing member countries. It is expected to catalyze about $1.7 billion of clean energy investments and contribute about 6.5 terawatt-hour equivalent of energy savings, 539.4 megawatt installed renewable energy capacity and 7.2  million tons of carbon dioxide emission reduction per year. Learn more about this financing facility.

As of 31 December 2013, $50 million of the Climate Change Fund, which provided climate change investment projects with technical assistance and grant support, has supported 66 projects.

Under ADB’s flagship Carbon Market Program, two carbon funds were launched to provide up-front carbon financing to member countries and enable them to benefit from market-based instruments under the Kyoto Protocol. These are the Asia Pacific Carbon Fund ($152 million) and Future Carbon Fund ($115 million).

The Asia Pacific Carbon Fund’s portfolio of clean development mechanism (CDM) projects has delivered carbon credits of 15.63 million, worth approximately $146.73 million. The fund is expected to be closed and terminated on 31 August 2014. As of May 2014, the Future Carbon Fund has allocated more than $59.57 million for the purchase of 8.64 million carbon credits from 29 CDM projects, representing about 52% of total fund size. Download the program’s brochure.

Infographic: Building Climate Change Resilience for Asia's Urban Poor
View infographic in higher resolution.

To help promote a more integrated approach for addressing the climate change challenge in urban development, ADB established the Urban Climate Change Resilience Trust Fund in December 2013. Read about an innovative program being financed by the trust fund to help 25 secondary cities in the region counter the impacts of climate change.

ADB continues to lead innovative approaches to mobilizing private sector finance, such as the Climate Public-Private Partnership Fund to provide commercial investors with investment products that can bring scale and at the same time have a meaningful impact on the market. View project information.

In March 2013, ADB also established the $81.5 million Canadian Climate Fund for the Private Sector in Asia under the Clean Energy Financing Partnership Facility. The new fund is expected to leverage up to $300 million of private sector lending and investment from concessional financing and result in up to 750,000 tons of greenhouse gas emissions reductions per year. View investor information.

In June 2014, ADB announced the establishment of a trust fund for supporting greenhouse gas reduction projects under the Joint Crediting Mechanism, a bilateral carbon market mechanism between the Government of Japan and developing countries. Learn more about the Japan Fund for the Joint Crediting Mechanism.

Multilateral climate funds

ADB also has access to global climate funds, including the Global Environment Facility and Adaptation Fund of the Kyoto Protocol. 

In 2008, multilateral development banks (MDB), including ADB, and a group of donor countries developed the concept of climate investment funds (CIFs) providing support to developing countries to help them shift toward low-carbon and climate-resilient development. 

ADB is administering $1.6 billion in CIFs for 38 projects across Asia and the Pacific. Read about ADB’s experience in the development of CIF programs and the innovative transformations being achieved by ADB projects using CIF funding.

ADB has also joined other MDBs in adopting a joint approach for mitigation finance reporting. Read about the latest joint MDB report on climate finance.