Strategy 2030

The Path to Recovery Needs to be Greener, Inclusive, and Resilient

Tackling Climate Change, Building Climate Change and Disaster Resilience, and Enhancing Environmental Sustainability

For much of the year, the pandemic has changed the way people lived. Among the positive consequences were a fall in carbon dioxide emissions of at least 7% and significant air quality improvements during the lockdowns. Despite this, 2020 remained the second-hottest year on record while packaged food and infectious medical waste dramatically increased. The rhetoric around the threat of climate change is no longer relevant; clearly, the environment is inexorably responding to the behavior and choices people have made. The recovery from the pandemic, which will be the central theme of ADB’s work over the coming years, provides a platform for more ambitious climate action to reduce emissions and build a resilient, nature-focused future.

  • Compounded by the impact of COVID-19, the threats of climate change and the critical depletion of biodiversity and ecosystems have become more ominous.
  • ADB will weave nature-positive and climate and disaster resilience into its work across all sectors and themes affected by the pandemic.
  • The path to a green, resilient, and inclusive recovery is an ambition that ADB cannot fulfill alone. Partnership is key.

Strategy 2030 aims to

  • accelerate low greenhouse gas emissions development
  • ensure a comprehensive approach to building climate and disaster resilience
  • ensure environmental sustainability
  • increase focus on the water-food-energy security nexus

Lockdowns all over the world last year gave a glimpse of what it feels like to have clearer air, skies, and water. They caused emissions to fall by 17% in April 2020. Still, the amount of greenhouse gases trapped in the Earth’s atmosphere continued to increase and reached their highest concentration ever in May 2020 at an average of slightly greater than 417 parts per million. The consequence of this is a climate that is 1.2oC hotter than the pre-industrial age, according to the World Meteorological Organization.

Studies have also shown a strong correlation between poor air quality and COVID-19 mortality rates. This is a critical issue for the region given that 92% of people in Asia and the Pacific live in cities that do not meet WHO air quality standards, leading to 4 million premature deaths per year. Significant air quality improvements were achieved when COVID-19 induced lockdowns and reduced economic activity. However, these improvements were quickly lost when economies reopened. This underscores the need for more focused long-term action. It also emphasizes the need for a more comprehensive approach, as 1.3 billion people who work in the informal sector across the region (approximately 7 in 10 workers) have lost jobs due to lockdowns and ensuing business closures and recession.

The pandemic has also led to a dramatic increase in packaged food and infectious medical waste, (i.e., about 129 billion face masks and 65 billion gloves utilized every month) that have posed a challenge to global efforts against improper disposal and marine pollution.

The pandemic is a wake-up call to recognize the importance of protecting nature, as it highlights the interconnectedness of human health to natural systems. As ADB’s member countries emerge from the disruption of the pandemic, ADB must reorient its approaches to recovery. “Business as usual” growth models that exacerbate the climate crisis, pollution, biodiversity loss, and the risk of future pandemics cannot persist. A green, inclusive, and resilient recovery should value and promote physical, natural, and social capital equally.

Partnerships for Green, Inclusive, and Resilient Recovery

Despite the obvious challenges posed by COVID-19, ADB was able to mobilize $729 million in 2020 from external partners to boost climate finance, supporting its own $4.3 billion investment in climate change projects. These initiatives focused on climate and disaster resilience interventions, access to credit and insurance, and helping countries transition to renewable and clean energy sources. Some projects also show how climate change and the impact of COVID-19 can be addressed simultaneously. One example is the Support to Build Disease Resilient and Energy Efficient Centralized Air-conditioning Systems. This initiative aims to reduce virus transmission while improving energy efficiency through a smart and centralized air-conditioning system.

Sovereign cofinancing for projects that addressed both COVID-19 and climate change totaled $228 million. There were 11 of such initiatives in 2020, 3 of which were emergency assistance projects in response to the pandemic, 2 were investment projects which help the poor cope with the economic effects of the pandemic, while the rest were technical assistance that focused on building resilience against any pandemics.

One example of a green recovery initiative is a regional project that aims to monitor in near real-time the impacts of disasters and other extreme events using innovative tools such as satellite imagery or other digital technology for impact-based forecasting. The platform will help provide timely information during catastrophic events. This platform, a project of ADB and the Japan Fund for Poverty Reduction, will help developing members become more resilient to disasters and extreme events. Aside from real-time monitoring of disasters, the project assesses the impacts of past disasters and socioeconomic shocks, allowing countries to benchmark and nowcast the impacts of future, similar events.

Another example of a green recovery partnership is an initiative in Pakistan that seeks to protect food supply amid the pandemic and a locust infestation. This is a critical project that will help a country heavily reliant on agriculture at risk from supply chain impact. Pakistan’s agriculture sector comprises more than 19% of its gross domestic product, 39% of its labor force, and nearly 80% of its total value of exports.

ADB has also been mainstreaming environmental sustainability into infrastructure as aligned with the G20 Quality Infrastructure Investment Principles. This includes use of nature-based solutions such as bioengineering to stabilize flood- and erosion-prone areas, and eco-sensitive design features such as wildlife corridors. Moreover, different sectors are being engaged in promoting innovative technology solutions such as mapping and assessment tools to avoid biodiversity impacts. Projects such as the one applying nature-based solutions for erosion control in the Northern Mountain Provinces of Viet Nam, cofinanced by ADB and the Global Environment Facility (GEF) have been profiled by GEF in 2020 as a good practice to build on in moving forward.

ADB worked with partners on projects that address both climate change and environmental sustainability simultaneously. One of these partners is the Japan Fund for the Joint Crediting Mechanism (JFJCM), a trust fund supported by the Government of Japan and administered by ADB to foster the adoption of advanced low-carbon technologies. In 2020, the JFJCM allocated $10 million cofinancing for the Greater Malé Waste-to-Energy Project, a project which aims to introduce an advanced waste-to-energy plant in the Maldives to improve waste management, reduce greenhouse gas emissions, and minimize waste dumping in the ocean.

Partnerships to Address the Climate Crisis

ADB provided $3.5 billion to assist climate change mitigation projects and $790 million for climate adaptation. Approximately 44% of the total went to projects in the energy sector while 31% went to transport. The bulk of these projects were implemented in South Asia (43%) and Southeast Asia (23%). ADB tackled these projects with the help of partners. About $729 million of the total climate finance for 2020 came from external partners. Their initiatives lowered emissions, reduced wastes, and managed resources to stop global warming.

The Asia-Pacific Climate Finance Fund (ACliFF) supports the development and implementation of financial risk management products that can help unlock capital for climate investments and improve resilience against the impact of climate change. ACliFF provided a $1.4 million technical assistance to ADB Ventures, a new facility that aims to build Asia-Pacific region’s largest impact technology platform, to support the SEED program, which provides startups with grant funding. ADB Ventures aims to pilot innovative solutions and test new business models of climate-focused financial risk management products using technology-enabled solutions. ACliFF’s collaboration with ADB Ventures also involves the sharing of market intelligence on potential investment opportunities that can further climate action for both funds.

Other projects that ADB worked on in 2020 include collaborations with the Clean Technology Fund (CTF), several of which were truly innovative. Examples are a first-of-its-kind geothermal project in Indonesia and energy storage technologies in Thailand. Through the Strategic Climate Fund, there were further examples of productive collaboration—enhanced reliability and stability of power supply to economic growth centers in Cambodia; Kiribati’s improved access to high-quality and climate-resilient renewable infrastructure; improved decision-making for climate-resilient development in sensitive sectors in Armenia, Indonesia, and Mongolia; and strengthened climate resilience of women engaged in poultry farming in India. The CTF also supported ADB Ventures, crowding in $1 billion of commercial investment by 2030.

Partnerships for Environmental Sustainability

ADB and its partners have been prioritizing the environment, as sustainability is one of the key drivers of poverty reduction in the region. ADB’s partnership with GEF reinforces the vital links between the environment and sustainable development. In 2020, GEF provided $14 million in grants to three projects.

Healthy oceans are critical to the health and economic well-being of millions of communities across the Asia and Pacific region. Under the Action Plan for Healthy Oceans and Sustainable Blue Economies, ADB aims to expand financing and technical assistance for ocean health and marine economy projects to $5 billion from 2019 to 2024, including cofinancing from partners. In Indonesia, GEF cofinancing will promote resource efficiency and circular economy pilot investment for the collection and processing of unnecessary, single-use, low-value plastics. At the regional level, GEF cofinancing will help selected ASEAN developing members design and implement government-led action plans to reduce plastic pollution. These latter two initiatives are embedded in the regional technical assistance Promoting Action on Plastics Pollution from Source to Sea in Asia and the Pacific,, a flagship program of ADB’s Healthy Ocean Action Plan. With these projects, ADB has leveraged cofinancing for the first time, under GEF’s chemicals and wastes focal area, which will complement biodiversity and international waters financing.

Recognizing the urgency of the Ocean agenda, ADB and the European Investment Bank (EIB) signed an agreement at the start of 2021 for a Clean and Sustainable Ocean Partnership. This will draw the resources of ADB and EIB together to support projects that reduce wastewater pollution and marine plastics; enhance coastal resilience including through integrated and nature-based solutions; and develop blue bioeconomy activities including sustainable fisheries, aquaculture, green shipping and ports, and associated maritime infrastructure. The partnership will expand inter-institutional cooperation on the identification and development of new projects, cofinancing and technical assistance, and sharing of experience and knowledge.

The Way Ahead

The idea that countries can have robust economic growth while still acting on climate and environmental issues is gaining traction. As countries gear up for recovery, policies and investments must be designed to recognize the value of nature as essential for the well-being of human societies as well as a key pillar for sustainable economies. To succeed, ADB recognizes that it must engage and partner with all stakeholders—from government, the private sector, civil society, financing institutions, and more—to collectively voice and commit to global initiatives and advocate for positive change.

The year 2021 provides a global focus on the environment with the People’s Republic of China hosting the United Nations (UN) Convention on Biodiversity Diversity Conference of the Parties (CBD COP15) where the global community will set targets on reducing biodiversity loss, followed by the United Kingdom hosting the UN Climate Change Conference of the Parties (COP26). Countries worldwide will come together to push for the achievement of the Paris Agreement goals and will also emphasize the links between climate and nature. This year’s summit is described as a make-or- break year for decisive actions to limit global temperature rise to 1.5℃. The platform provided by COP26 is an ideal opportunity to galvanize the international response. Compounded by the impact of COVID-19, the threats of climate change and environmental crisis have become more ominous.

Projects

Check out the 2020 cofinanced projects tagged against the operational priority Tackling Climate Change, Building Climate Change and Disaster Resilience, and Enhancing Environmental Sustainability.

Stories

Indonesia: Geothermal Power Generation Project

This project seeks to help Indonesia fight climate change, provide sustainable, reliable, and efficient energy, and help businesses and consumers access affordable, reliable, and modern energy.

The Geothermal Power Generation Project, cofinanced by the Clean Technology Fund, features technology combining a conventional steam turbine and an Organic Rankine Cycle plant, allowing for future development of resources while extracting energy from both steam and liquid brine streams produced from the reservoir.

Regional: Improved Decision-Making for Climate Resilient Development in Asia and the Pacific

ADB and the Strategic Climate Fund initiated this regional knowledge and support technical assistance to help Armenia, Indonesia, and Mongolia become climate-resilient through better fiscal decision-making.

This initiative aims to help these countries integrate climate resilience considerations into fiscal decision-making, ensuring that they have appropriate funds for climate adaptation actions, and potential sources of revenue to finance climate adaptation measures.

Indonesia: Coral Reef Insurance and Finance Scheme for Asia and the Pacific

This project, conceived in close collaboration among ADB, the Global Environment Facility, The Nature Conservancy, and UNDP, aims to create enabling conditions for risk transfer mechanisms and advance models for insuring nature, particularly coral reef ecosystems. Healthy coral reefs can absorb 97% of wave energy, reduce the impact of flooding and coastal erosion, and provide significant coastal protection, enhancing the resilience of the fishery and tourism sectors which support local livelihoods.

India: Demand-Side Energy Efficiency Sector Project – Additional Financing

In collaboration with the Energy Efficiency Services Ltd, NITI Aayog, Global Environment Facility, United Nations Environment Programme, and several private sector entities, this project will support city e-mobility action plans, lithium-ion battery reuse and recycling, and pilot investments in two- and three-wheel transport in India. It will also support the creation of Zero Electric Vehicle Connect—a tool for digitizing and presenting city e-mobility data. This initiative will complement the ADB project “Scaling Up Demand Side Energy Efficiency Sector Project" as well as the regional technical assistance “Sustainable Transport for All”.

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