Remarks by Ahmed M. Saeed, ADB Vice-President, Operations 2, at the Sixth Ministerial Meeting of the Coalition of Finance Ministers for Climate Action, 12 October 2021
Good morning, and thank you for having me.
Climate mitigation has long been described as an enormously expensive process, one that would reduce, not increase, global income levels. But our work at ADB is starting to reveal two important facts about this transition that I would like to share.
First, and I will mention this briefly despite its great importance, is that we must transition from a negative to positive agenda on climate change. In fact the multi-trillion dollar industries represented by emerging netzero technologies are an unprecedented opportunity to mobilize capital and skills to support development. If we can make this vision real, $100 b might ultimately seem like a small and easy number.
Second, if we are to mobilize capital for the genuinely expensive parts of this exercise, we must do so where possible in ways that engage market actors, incentivize voluntary actions, and respond to local circumstances, sometimes implicitly rather than explicitly reflecting carbon prices.
For example, ADB has been working closely with the Governments of Indonesia and the Philippines on a new initiative, the Energy Transition Mechanism. ETM is a blended finance solution that leverages its lower cost of capital from concessionary funds into a reduced working life for coal-fired power plants in target countries. We view this as a locally tailored, replicable, scalable, market-based and fair mechanism for accelerating carbon transition.
As we pivot to a positive agenda on climate change, and mobilize transition capital in new and innovative ways, I believe we will find increasingly that decarbonization is development.