Welcome remarks by Masatsugu Asakawa, President, Asian Development Bank, at the 11th Meeting of the ADB President’s Advisory Group on Climate Change and Sustainable Development, 26 October 2020
Thank you, Bambang, for the introduction; and let me welcome the members of the Advisory Group, along with our other colleagues who have joined this meeting.
It is a pleasure to meet with you virtually today despite the unprecedented circumstances created by the coronavirus disease (COVID-19) pandemic. I appreciate your resilience and dedication, and I offer my deepest solidarity in the face of the extraordinary challenges.
I. ADB’s COVID-19 response
Today, I would like to outline ADB’s response to the pandemic, followed by a summary of the strategic direction we are taking to advance climate action and sustainable development.
In April of this year, ADB responded rapidly to the pandemic with a $20 billion support package. Our support is based on three pillars.
- First, we are addressing the urgent health crisis through grants and technical assistance that are helping to supply much-needed medical and personal protective equipment, and expertise.
- Second, ADB is providing quick-disbursing budget support under a new financing modality, the COVID-19 Pandemic Response Option, or CPRO, to help governments deploy social protection measures, strengthen their health systems, and stimulate economic activity.
- And third, we are supporting the private sector, to ensure its continued operation while maintaining employment.
To date, ADB has committed $12.5 billion to this response. We are also formulating a new package of support in close partnership with other institutions to provide both technical and financial assistance to our developing members so that they can provide equitable, efficient, and affordable access and delivery of COVID-19 vaccinations once safe and effective vaccines become available.
II. Ensuring a green, resilient, and sustainable recovery
While ADB provides this immediate relief from the pandemic’s devastating impacts on health and economies, it is also absolutely crucial to design smart interventions for recovery. I believe you would agree that the decisions we make now will define the creation of post-pandemic systems, institutions, and assets—helping to set the direction for development well into the future.
Turning to these issues in the context of climate change and sustainable development, let me highlight one sobering piece of data. According to the International Energy Agency, global energy demand is expected to contract by 6% this year. This represents the largest drop in more than 70 years; and it reflects the catastrophic impacts of the pandemic on travel, trade, and social and economic activity.
While this dramatic decrease in energy demand will contribute to a reduction in global carbon emissions of 8%, the uncomfortable truth is that the sharp and painful suspension of economic activity across the globe, which led to these reductions, will not even be enough to help us reach the targets set by the Paris Agreement.
We also have to remind ourselves that even before the pandemic struck, Asia and the Pacific was already the region of the world hit hardest by disasters, and that climate change has exacerbated these effects. Most troubling is that the poor and the vulnerable often bear the brunt of these increasingly devastating impacts.
These dire facts are precisely the reason why we must return our attention to building low-carbon economies and societies, while at the same time ensuring social inclusion and enhancement of climate and disaster resilience.
As governments shape the recovery and rebuild their economies, investments should aim to create jobs, add to the productive asset base, and address climate challenges. We have to come up with innovative but practical ways to secure a robust recovery without greenhouse gas emissions returning to pre-pandemic levels.
For example, as societies confront growing trends toward the use of private vehicles in order to avoid the spread of infection, it will be important to ensure safety and restore confidence in public transport. These measures will help to reduce emissions and enhance air quality.
Introducing a carbon tax would also help to steer the region’s economies toward an environmentally sustainable path—and secure much-needed fiscal resources to bolster financial sustainability across the public sector. Additionally, promoting thematic bonds, such as green and blue bonds, will mobilize private financial resources with investments that promote a resilient and green society.
III. ADB’s continued commitment to supporting climate actions
With these needs in mind, let me assure you that ADB will not waver in our commitment to the goals stated in our Strategy 2030—which adopts, as one of our seven core operational priorities, tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability.
In 2019, our climate financing reached a record high of $6.56 billion, meeting our target of doubling ADB’s annual climate investments from 2014—a feat that I am proud to note we have achieved a year ahead of schedule.
And we have set an even higher climate target for the next ten years. As you know, we aim to provide $80 billion in cumulative climate financing for the period of 2019-2030, and to focus on climate adaptation and mitigation efforts in at least 75% of our operations by 2030. I am very encouraged to report to you that even though so much of our focus in 2020 has been directed, appropriately, toward ADB’s emergency response to the pandemic, we still expect to provide $5.5 billion in climate financing this year.
In addition to ADB’s investments, we continue to find ways to mobilize climate finance from not only global funds and bilateral support, but also through substantial private sector investment.
Apart from the financing that we deploy to our developing member economies, we also remain committed to providing them with tailored technical assistance and practical knowledge. This will empower our developing members to:
- plan for and achieve enhanced Nationally Determined Contributions;
- design, build, and maintain resilient infrastructure;
- integrate climate and disaster risk in decision making;
- build resilience of the poor and vulnerable at the community level; and
- use carbon pricing to promote the transition toward a climate-compatible development path.
In coordination with other multilateral development banks, we have committed to aligning our operations with the objectives of the Paris Agreement. ADB is currently working with our partners to pilot test the methodology that is jointly developed, so that we can move in that direction.
As we focus today on how we can lay the foundation for a greener, more resilient, and sustainable future, I would appreciate it if you could share with us your insights on how ADB can best support its developing members through our ambitious climate change agenda, while also ensuring a robust and inclusive recovery from the pandemic.
Thank you for your very valuable contributions to our work at this very important moment for our region.