High Level Event on Climate Technology Transfer and Finance

Opening Remarks by ADB Vice President for Knowledge Management and Sustainable Development Bindu N. Lohani on 3 December 2012 at the Qatar National Convention Centre, Doha, Qatar

Introduction

Distinguished guests, ladies and gentlemen: thank you very much for joining us this afternoon. I am very pleased to be representing the Asian Development Bank as one of the co-organizers of this important event. I would like to spend just a few minutes providing some perspectives on the topics to be discussed and their relevance to the green growth transition that is already underway in Asia and the Pacific.

UNFCCC and Asian context

The global climate change policy framework developed under the UNFCCC places a strong emphasis on ensuring that developing countries have access to the technologies and financing they need to support their transition away from unsustainable economic growth models to low-carbon and climate-resilient development.

Many developing countries in our region are experiencing rapid economic growth and require enormous amounts of new infrastructure and resources to sustain their economic expansion and continued poverty reduction. If development does not take account of the growing adverse impacts of climate change, the benefits associated with this new infrastructure will be significantly diminished over time. Likewise, if the infrastructure relies on carbon-intensive technologies, this will lock in massive greenhouse gas emissions, which will severely hamper global efforts to mitigate climate change.

New climate-resilient and low-carbon technologies could help developing countries "leapfrog" their economies to advanced development solutions, avoiding major dislocations associated with climate-induced stresses and the carbon-intensive and inefficient development path followed in the past by developed countries.

Technology and finance challenge

Significant advances are needed to ensure that developing countries have technology options capable of building resilience to the adverse impacts of climate change, decoupling economic growth from rapidly expanding greenhouse gas emissions, and to otherwise placing their economies on environmentally sustainable paths.

This process will need large amounts of finance, and fortunately there is a growing array of public funding available for climate action. The private sector is also expanding its climate-friendly investments, especially in renewable energy supply and improved energy efficiency.

ADBand the other multilateral development banks – the MDBs – are contributing their own resources and helping to channel new international climate finance to developing countries through mechanisms such as the GEF, the Climate Investment Funds and soon the Green Climate Fund. Both this year and last year, ADB will have invested more than $2 billion annually in expanding clean energy across the Asia and Pacific region.

But massive investments are required, with mitigation estimates of between $180 and $250 billion per year in all developing countries, and $40 billion per year just for adaptation in Asian and Pacific countries.

Moving up the technology development curve

While ADB and the other MDBs are significant financiers of technologies that have already been tested in the market, we are not yet making significant contributions to advancing the availability of newer climate-friendly technologies. We all must move up the technology development curve if we are to help identify and deploy the new technologies needed to keep global warming to within the 20 Centigrade limit and to ensure that developing countries are adequately prepared to cope with the adverse consequences of climate change.

Targeted finance is needed at both the innovation stage, when technologies are developed, and the deployment stage. For the innovation stage, public funding can bolster private research and development and stimulate the flow of venture capital towards climate-friendly investments. For the technology deployment phase, concessional resources can be used to help shoulder project development costs, to help cover risks for commercial partners, and to improve the enabling policy and institutional environment.

Partnerships to mobilize the requisite financing

The challenge then is how to mobilize the financing needed to develop, demonstrate, and deploy the emerging technologies. Clearly this will largely rely on encouraging more private sector investment, such as through well placed public financing coupled with support to overcome policy, institutional, information and risk barriers to investment.

The UNFCCC negotiations have recognized the crucial links between financing and technology, and there is now increasing emphasis on how the Convention’s Financial and Technology Mechanisms can work in tandem to achieve a step change in developing country access to climate-friendly technologies.

Establishment at ADB of the Pilot Asia-Pacific Climate Technology Finance Center (CTFC) is a step in this direction. The CTFC has as its clients both ADB’s own operations staff who design development projects across our region, and external clients – investors, technology suppliers and other partners. It is part of a wider partnership among ADB, GEF and UNEP.

If the Center concept is proven to be viable and productive, this may evolve into a permanent knowledge facility to mobilize finance and encourage the development and deployment of climate-friendly technologies for the sustainable development of Asian and Pacific economies.

This is a unique collaboration between a multilateral development bank devoted to mobilizing and leveraging financial resources for inclusive and environmentally sustainable growth, GEF as a proactive funding body, and a UN agency with a long track record of supporting and implementing improved environmental management, including the development and transfer of environmentally sound technologies.

These are the types of partnerships we will need if we are to find and implement viable measures to address climate challenge. This side event – organized jointly by GEF and ADB – is a direct example of how such collaboration is already furthering the dialogue and action needed to solve the climate change crisis.