ADB Support for Action on Climate Change, 2011–2020
The last decade has been profound for climate impacts in the Asia and Pacific region and globally, bringing home the reality of the climate crisis. For many of the Asian Development Bank (ADB) developing member countries (DMCs), and the Pacific and atoll nations in particular, the climate crisis poses an existential threat. The 6th assessment of the Intergovernmental Panel on Climate Change is unequivocal that human influence has warmed the globe, with heavy precipitation and associated flooding projected to intensify and be more frequent in most regions in Asia, reinforcing the need for greater efforts on adaptation and increasing the region’s resilience. Compounding these challenges is the immediate crisis of the coronavirus disease (COVID-19) pandemic. Development choices that will lead to a green recovery reset are far from certain.
It was also a significant decade for climate action by multilateral organizations, governments, businesses, and citizens. Global climate and development policy has moved apace: the Sustainable Development Goals, the Paris Climate Agreement, and the Addis Action Agenda were all signed in 2015. Countries, corporations, and citizens began a Net Zero movement and cumulative issuances in the green finance market reached $1.0 trillion in 2020. Multilateral development banks have committed themselves to supporting the Paris Agreement and have committed $66 billion in climate finance in 2020, 58% of which will be for low-income and middle-income economies.
However, immense challenges remain. Collectively, the nationally determined contributions submitted so far, including those from the Asia and Pacific region, are not sufficient to meet the Paris Agreement goal to keep the global temperature increase to less than 2°C, resulting in an emissions gap. The international commitment for $100 billion annual climate finance from developed to developing nations has not yet been met, leaving a financing gap. The region needs the technical and financial support of developed countries to address these gaps and to transition to resilient and low-carbon economies.
ADB has strongly supported its DMCs by doubling its climate finance since 2015. Completed projects have been largely successful and this support has led to significant gains on mitigation. ADB’s strategic approach for climate change has strengthened over the evaluation period; it has been relevant in its intent and its ambitions have increased. Also, ADB’s recent announcement to fully align its operations with the Paris Agreement is a significant and positive step forward.
Yet, for ADB to be able to leverage its potential to play a strong leadership role on climate action in Asia and the Pacific, some key strategic and operational gaps remain. A coordinated “One ADB” climate action framework, supported by robust country climate diagnostics, improved guidelines on climate accounting, risk assessment, and private sector engagement, is needed to meet ADB’s commitments. Wider use of ADB’s available lending instruments is needed to leverage a greater impact from ADB resources. Underpinning these initiatives will be ADB staff, who will need the resources and training to deliver on ADB’s climate ambitions. Finally, ADB will need to ramp up financial and technical support for its DMCs to deliver the resources and expertise needed to support their long-term strategies to transform their economies along resilient and low-carbon pathways.