Keynote speech by Masatsugu Asakawa, President, Asian Development Bank, at the Indonesia Ministry of Finance-Asian Development Bank 2021 International Climate Change Conference (ICCC): A Just and Affordable Transition toward Net Zero, 22 July 2021
Your Excellency, Minister Sri Mulyani; Chair of the Intergovernmental Panel on Climate Change, Dr. Hoesung Lee; distinguished guests; and colleagues. I am grateful to join my fellow keynote speakers, the honorable Minister of Finance and Dr. Lee, to discuss our shared commitment to climate action. I would like to offer two key messages.
I. The battle against climate change in Asia and the Pacific
First, we share a common goal of securing the transition to net zero emissions and a climate-resilient future—both of which are critical to sustainable development and economic growth.
Asia and the Pacific is currently responsible for over 50% of global greenhouse gas emissions. At the same time, the region is also facing the destructive effects of climate change, such as more intense and frequent extreme weather events like Cyclone Seroja earlier this year, one of the most severe cyclones to hit Indonesia in recent decades.
Response measures such as rapid decarbonization, climate change adaptation, and resilience building are all essential; but achieving this transformation across the region requires international cooperation and strong public and private finance.
Implementing this in the current circumstances will be challenging, especially because of the limited fiscal space developing member countries (DMCs) have as a result of the pandemic. But ADB remains committed to supporting our DMCs in their efforts to achieve a transition that is just and affordable.
ADB aims to provide at least $80 billion in climate finance from 2019 to 2030 cumulatively. I have also called for significantly scaled up ADB investments in adaptation and resilience through a cumulative financing target of $9 billion between 2019 and 2024. And, as we announced earlier this month, ADB will target full alignment of our sovereign operations with the Paris Agreement by 1 July 2023, and nonsovereign operations at 85% by 1 July 2023 and fully by 1 July 2025.
ADB is also working with key public and private sector sponsors to develop an Energy Transition Mechanism, also known as ETM, in Southeast Asia including in Indonesia. We envision ETM will comprise a regional facility for catalyzing donor and philanthropic resources. It is a market-based, equitable, and scalable way of accelerating the retirement of coal-fired power plants, while also jumpstarting the growth of renewable energy capacity. Ultimately, ETM has the potential to help our DMCs greatly reduce their greenhouse gas emissions.
II. Indonesia’s role in driving climate action in ASEAN and beyond
My second message is that ASEAN and the wider region now have a unique opportunity to rebuild from the pandemic and secure a green, resilient, and inclusive future. We need clear and decisive global cooperation to make this happen.
Indonesia can lead by example through its upcoming chairmanship of the G20 in 2022 and of ASEAN in 2023. ADB will fully support Indonesia through our sovereign and private sector operations, knowledge, and partnerships. Let me highlight a few relevant examples.
First, ADB will support Indonesia’s transition to a low-carbon economy with funding for clean energy generation. We are working with the government to examine the feasibility of an ETM fund for the early retirement of existing coal-fired power plants. We have also provided financing for geothermal and solar projects.
Second, ADB is helping the government leverage private capital through the SDG Indonesia One - Green Finance Facility. In ASEAN, ADB has supported development of green and sustainable bond standards; and we are supporting issuers including the state-owned electricity company, PLN, to start issuing sustainable bonds.
Finally, we plan to establish a Blue Finance Hub in our Indonesia Resident Mission to develop bankable oceans health projects in Indonesia and other selected ASEAN countries.
My friends, the task of addressing climate change is not only urgent, but also inextricably linked to an inclusive and lasting recovery from the pandemic. With shared commitment and international cooperation, we can make the transition to net zero and achieve climate resilience, so that our region emerges stronger than before.