ADB's Work on Climate Change and Disaster Risk Management
ADB is prioritizing climate and disaster resilience and low-carbon development in response to the growing threats facing Asia and the Pacific.
In the face of rapidly growing greenhouse gas (GHG) emissions, increasing impact from climate change and disasters, and ongoing environmental damage, ADB has placed combating climate change and its consequences at the top of its development agenda. In September 2019, the bank adopted Strategy 2030 Operational Priority 3: Tackling Climate Change, Building Climate and Disaster Resilience, and Enhancing Environmental Sustainability.
Acknowledging the urgency and scale of the region’s climate change challenge, ADB is elevating its ambition to $100 billion in cumulative climate financing from its own resources to its developing member countries (DMCs) in 2019-2030. In 2018, ADB committed to ensuring that at least 75% of its operations support climate action by the end of the decade. From 2011 to 2020 ADB approved about $41.6 billion in climate financing. ADB's own resources provided $36.3 billion, while external resources contributed $5.3 billion.
ADB’s Climate Change Operational Framework 2017–2030 is supporting the regional shift toward low greenhouse gas emissions and climate-resilient development. The operational framework provides guidance across all ADB sector and thematic groups to strengthen climate action, operationalizing ADB’s commitment to significantly increased climate change financing.
Recognizing the increasing impact of disasters and climate change on marginalized and vulnerable countries and populations, ADB approved a Revised Disaster and Emergency Assistance Policy (DEAP) in October 2021. The 2021 DEAP will increase the impact of ADB’s support to its development member countries in strengthening resilience and responding to disasters and emergencies.
With Asia and the Pacific responsible for more than half of all global carbon emissions, the key to tackling climate change is transitioning the region to clean energy. ADB invested more than $25 billion in clean energy through sovereign and non-sovereign initiatives from 2008 to 2020. Mainstreaming affordable and reliable clean energy in developing Asia is critical for sustainable development and regional energy security, as well as addressing climate change. A sustainable and secure energy supply remains essential, as more than 350 million people still lack access to electricity in the region, with several countries still heavily dependent on imported fossil fuels.
In October 2021, ADB committed to elevating its ambition to $100 billion in cumulative climate financing from its own resources to its DMCs for the period 2019-2030. Investment in all developing countries for climate mitigation is estimated to be between $140 billion to $175 billion per year by 2030. Climate adaptation cost estimates for Asia and the Pacific are in the order of $40 billion per year between now and 2050. Through mechanisms such as the Climate Investment Funds, multilateral development banks have mobilized $7.0 billion for climate action in developing countries, with more than $2.5 billion earmarked for Asia and the Pacific. For the massive financing required to combat climate change, the key will be using limited public sector funds to leverage significant amounts of private capital.
Cities in Asia are growing at an unprecedented pace, with 44 million people added to urban populations every year. The resulting congestion, waste, pollution, and associated health impacts remain key challenges in sustaining urban development. ADB supports liveable, green cities through financing water supply, waste management, clean transport, urban planning, and clean energy projects. Transport is the fastest growing source of new GHG emissions in the region. Shifting transport and urban development to a greener, more sustainable model will significantly reduce climate change.
Building Disaster Resilience
ADB helps its member countries to become more resilient to disasters by financing disaster risk management in areas such as flood control, early warning systems, nature-based solutions, integrated water resource management, resilient infrastructure, and disaster risk financing. Between January 2017 and December 2021, ADB approved $2.08 billion for 32 projects that directly reduced disaster risks, improved institutional and community preparedness, and strengthened financial preparedness for disasters. A further 351 projects incorporated measures to strengthen disaster resilience in their design. Investment in disaster resilience can contribute to sustained economic growth, poverty reduction, and enhanced natural resource management. These investments have the most far-reaching effect if these are undertaken in the context of wider development and are carefully integrated into the development process. Successful investment in resilience also requires active cooperation between governments, the private sector, civil society, and the international community.
ADB is promoting disaster risk reduction and climate change adaptation in the region by investing in water supply, sanitation, irrigation, flood control, transport and energy infrastructure that withstands and builds resilience to disasters and climate change. Climate adaptation cost estimates for Asia and the Pacific are in the order of $40 billion per year between now and 2050. Investment in health and education will also improve countries’ capacity to adapt. Helping vulnerable communities and sectors cope with disasters and climate change strengthens their resilience and facilitates sustainable development. ADB is working with partners to roll out an ambitious community resilience partnership program across the region.
Ensuring Rapid Response and Resilient Recovery
Through technical assistance, grants and emergency assistance loans, ADB provides timely support to help its developing member countries respond to urgent life-saving requirements, rebuild high-priority infrastructure and physical assets, and restore governance and economies following disasters and emergencies. Between January 2017 and December 2021, ADB approved $818.35 million in financing for 15 post-disaster assistance projects following disasters triggered by natural hazards. ADB’s recent response to disasters in the region have included the Sulawesi earthquake and tsunami in Indonesia, an earthquake in Papua New Guinea, volcanic activities in Vanuatu and Tonga, and tropical cyclones in the Pacific. See Asia Pacific Disaster Response Fund (APDRF).
ADB works to assist member countries to formulate and mainstream climate adaption and resilience policies. The bank produces regular Climate Risk Country Profiles that outline changes in key climate parameters, as well as the impact of these changes on communities, livelihoods, and economies. The aim of the series is to provide user friendly technical resources to facilitate country diagnostics, policy dialogue, and strategic planning. ADB’s Climate Change Operational Framework 2017-2030 provides a framework for DMCs to enable the implementation of their international commitments to address climate change, while pursuing sustainable development.
Carbon Pricing and Carbon Markets
ADB remains steadfast in supporting its developing member countries (DMCs) utilize carbon pricing instruments as an integral part of the broader policy architecture to help achieve their nationally determined contribution (NDC) and net-zero targets. ADB has a long-standing engagement with carbon markets, mobilizing carbon finance and providing technical and capacity-building support through the Asia Pacific Carbon Fund, Future Carbon Fund, and the Japan Fund for the Joint Crediting Mechanism. ADB has been providing technical support to enhance the capacity of its DMCs through its Technical Support Facility as well as the Article 6 Support Facility. ADB will continue to take a holistic approach to carbon pricing and markets by mobilizing carbon finance, incentivizing investments in low carbon technologies, and providing technical and capacity building support to its DMCs.
Land and Forests
ADB is working across Asia and the Pacific to support sustainable forest management and conservation efforts, as well as agricultural land use improvements, to promote carbon conservation. Land and forests need to be conserved to provide proper livelihoods for local populations and a safe and sustainable haven for thousands of animal and plant species. ADB’s approach to land and forest management helps support local livelihoods, strengthens resilience to climate change, maintains clean water, and protects biodiversity.
Meeting DMCs’ Paris Agreement Commitments
ADB is supporting its DMCs to achieve, and raise, their Paris Agreement commitments while charting a fair and equitable path to net-zero—through various programs focusing on nationally determined contributions (NDCs), carbon markets, and development of sound and ambitious long-term national strategies. ADB has established a dedicated technical assistance platform - NDC Advance- to help DMCs mobilize finance and build capacity and knowledge to support the implementation of their Paris Climate Agreement pledges to reduce greenhouse gas emissions.
NDC Advance is being implemented through three separate but strategically linked subprojects with the following objectives:
- Assist DMCs in refining and enhancing their ambition, translating NDCs into climate investment plans and identifying priority climate projects that may be executed with ADB assistance;
- Improve DMCs’ access to external public and private actors supporting the use of innovative finance mechanisms to secure needed financing;
- and Develop methods and tools to measure, monitor, and report on commitments made under NDCs.
Aligning ADB’s Operations with the Paris Agreement
ADB has committed to align its operations with the goals of the Paris Agreement. Full alignment of its sovereign operations will be achieved by 1 July 2023. Alignment of its nonsovereign operations will reach 85% by 1 July 2023 and 100% by 1 July 2025.
New ADB operations will be screened using a framework of methodologies developed jointly with other MDBs to help ensure projects are consistent with countries’ low-emissions, climate-resilient development pathways and with the overall climate change mitigation, adaptation, and resilience objectives of the Paris Agreement.
ADB’s commitment to align its operations with the Paris Agreement applies to all ADB-financed and/or ADB-administered sovereign and nonsovereign projects, and their components regardless of the source of financing, with the exceptions of technical assistance. To achieve this commitment, ADB is developing a set of tools, processes and resources that will help mainstreaming Paris Agreement alignment throughout the project cycle.
Just transition is the acknowledgement that while DMCs need to meet and scale-up their Paris Agreement commitments, that process could have adverse effects for various regions, sectors, and groups. ADB has joined with other MDBs in committing to a set of high-level principles to ensure a cohesive, credible, and transparent approach to just transition.
To support DMCs, ADB has undertaken preliminary research and consultations to assess and better understand just transition issues, opportunities, and challenges in our DMCs. It is also mobilizing resources to establish a just transition support platform that will enable our DMCs to embed just transition in their climate commitments, policies, and plans and to support their implementation. It is likewise working to enhance knowledge and awareness of just transition in our region and identifying and promoting innovative just transition financing approaches.
Funds and Facilities for Climate Change and Disaster Risk Management
ADB is committed to ensure that at least 75% of the number of ADB’s committed operations (on a 3-year rolling average) will be supporting climate change mitigation and/or adaptation by 2030 and climate finance from ADB’s own resources to reach $80 billion cumulatively from 2019 to 2030. In 2021, ADB announced it is elevating its climate finance ambition to $100 billion by 2030.
Despite the continuing challenges posed by the COVID-19 pandemic, ADB committed $4,766 million in climate finance in 2021, of which $3,438 million (72.1%) is expected to contribute to mitigating climate change and $1,328 million (27.9%) to adaptation. ADB provided $3,553 million from its own resources and mobilized $1,213 million from external resources.
a As of 31 March 2022, actual remittances amount to $294 million.
b FCF completed contracting for new transactions in 2015.
Disaster Risk Management
ADB strengthens disaster risk management assistance to its developing member countries
On 5 October 2021, the Asian Development Bank (ADB) approved the new Disaster and Emergency Assistance Policy, the Emergency Assistance Loan Policy, and the Establishment of a Second Window of Assistance under the Asia Pacific Disaster Response Fund. These three policies are intended to increase the impact of ADB’s support to its developing member countries in strengthening their resilience and responding to disasters and emergencies affecting them.
- Data: Climate Change Financing at ADB
- Energy Transition Mechanism
- Flyer: NDC Advance – Accelerating Climate Actions in Asia and the Pacific
- Flyer: Asian Development Bank – Building a Low-Emission and Climate-Resilient Asia and the Pacific
- Climate Change Operational Framework 2017–2030: Enhanced Actions for Low Greenhouse Gas Emissions and Climate-Resilient Development
- Integrated Disaster Risk Management Fund
Strategy 2030 sets seven operational priorities, each having its own operational plan. The operational plans contribute to ADB’s vision to achieve prosperity, inclusion, resilience, and sustainability, and are closely aligned with Strategy 2030 principles and approaches.