Speech by Masatsugu Asakawa, ADB President, at the Launch of the Partnership for Energy Transition Mechanism (ETM) at the 26th session of the Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change (UNFCCC), 3 November 2021, Glasgow, UK
Your Excellencies Minister Sri Mulyani, Secretary Dominguez, and Exchequer Secretary Helen Whately; and colleagues here today representing philanthropies and the private sector:
I am honored to join you to mark the partnership launch of our Energy Transition Mechanism, or ETM. This is a groundbreaking initiative that will accelerate the transition from coal to clean energy.
Let me discuss with you why our shared commitment to climate action is so badly needed, and how ETM will support collective action toward a cleaner and more sustainable future.
ETM promises to become a key component of ADB’s commitment to take bold and urgent action against climate change. As I announced last month, we are raising our ambition to deliver $100 billion in cumulative climate financing between 2019 and 2030, including $34 billion dedicated to adaptation projects.
I. The threat of climate change in Asia and the Pacific
My friends, sadly, Asia and the Pacific is vulnerable to some of the most destructive effects of climate change, and these are expected to worsen. At the same time, our region is the source of more than 50% of annual global greenhouse gas emissions.
Because of this, we need to recognize that the battle against climate change will be won or lost in Asia and the Pacific.
ADB’s new Energy Policy reflects our decision to formally withdraw from new coal-fired power plants. However, we must also face the sobering reality that legacy coal-fired power plants are the single largest source of greenhouse gas emissions.
And in Asia, these plants are relatively young. If not retired from operation, they will last for decades—blocking meaningful pathways to reduce emissions and make space for renewable energy.
It is clear that if we do not address emissions from existing coal power plants, we will not meet the Paris Agreement targets.
II. Catalyzing private capital through ETM
Faced with this enormous challenge, I am very pleased to highlight the enormous potential of ETM to catalyze private capital and accelerate the transition to clean energy.
ETM is a public-private finance vehicle with two main goals:
- Lowering emissions through early retirement of coal-fired power plants, and
- Unlocking new investments for sustainable, renewable energy.
Let me describe our ambitions for ETM going forward.
First, ADB is joining the Governments of Indonesia and the Philippines to formally launch a partnership today to pilot ETM in Southeast Asia. I am thankful to the Governments of the US, the UK, Japan, and Denmark, along with stakeholders from the private sector, and philanthropic foundations who are joining us in this important effort.
This pilot will seek to retire or repurpose 5–7 coal-fired power plants in the pilot countries in the near-term. Repurposed plants will be converted to renewable energy generation or alternative uses.
Second, once it is scaled up, ETM has the potential to be the largest carbon reduction model in the world. For example, retiring 50% of coal power plants over the next 10–15 years in Indonesia, the Philippines, and Viet Nam could cut 200 million tons of CO2 emissions per year—the equivalent of taking 61 million cars off the road.
ETM will align with ADB’s ongoing work to support policy reforms and regulations that promote a permanent shift to clean energy, while meeting existing and future energy needs.
Third, ADB will prioritize a just transition that alleviates the potential environmental and socio-economic impacts of ETM by considering populations that are affected directly and indirectly, including workers and communities.
To help design and deliver appropriate just transition measures, we will establish an advisory group composed of leading experts and civil society stakeholders.
In conclusion, let me express my deep appreciation to all who have turned this exciting new initiative into a reality.
We look forward to working with our partner governments, the private sector, and all stakeholders as The Climate Bank for Asia and the Pacific—so that our region can achieve a successful transition to clean, reliable, and affordable energy.