David McCauley Principal Climate Change Specialist Regional and Sustainable Development Department

1. Sustainable Development, Climate Change and ADB InitiativesAsian Institute of Management MDM Course David McCauley Principal Climate Change Specialist Regional and Sustainable Development Department 25 June 2009

2. Outline of Presentation • ADB’s Mandate and Programming Structures • Measures to Build in Sustainability Considerations • Environmental Programs and Partnerships • Conclusions and Looking Ahead

3. Strategy 2008-2020 Regional Cooperation & Integration Inclusive Development Environmentally Sustainable Economic Growth Environment Financial Sector Infrastructure Education Regional Cooperation/Integration ADB’s Strategy 2020

4. Building Environmental and Social Considerations into Projects Poverty Reduction and Sustainable Development Efforts Operational Policies & Strategies Sector policies Strategies Safeguard Policies Other Policies

5. Thematic Assessments and Consultations Post Evaluation CPS Technical Assistance Processing Project Completion The Project Cycle Supervision, M&E PPTA Implemen-tation Midterm Review Loan Processing and Approval Inception Implementation MRM/ CCM Board Approval Appraisal SRC

6. ECONOMIC Project A Project C Project B SOCIAL ENVIRONMENTAL Project D Project A - Large-scale irrigation project with high B/C ratio; rich farmers benefit, and causing problem of schistosomiasis to local people who are not direct beneficiaries; poor marginal farmers becoming landless laborers. Project B - Save the spotted deers or rhinos. Subsidized hospital project in a sparsely populated urban area Project C - Rural Water Supply project which benefits poor and women in particular, improves quantity and quality of available water, at low cost. Project D - Balancing Project Benefits

7. Environmental Considerations in the Region’s Development • National Climate Change Action: Mitigation & Adaptation • Clean and Renewable Energy • Water Resources Management • Air Quality Management • Wastes Management • Managing Natural Resource Systems • Policies and Institutions • Global/Regional/Transboundary Challenges • Transboundary air/water pollution, climate change • Biodiversity conservation • SE Asian and Pacific fisheries • Land degradation/dust and sandstorms • Wastes and other environmental trade issues

8. ADB’s Environmental Approaches • Environment Policy • Country Strategy and Program / CEA • Project Responses • Technical Assistance – analysis, pilots, KM • Partnerships – national and international partners/networks, NGOs, private sector • Regional Cooperation • Safeguards – EIAs

10. Sub-regional Environment Programs • Greater Mekong Subregion • National Performance Assessment and Strategic Environmental Framework • Biodiversity Corridors Initiative and the GMS Core Environment Program • Northeast Asia • Coal-fired power plants air pollution control (SO2 emissions trading) • Prevention and Control of Dust and Sandstorms • Central Asian Countries • Capacity building in Environmental Info Management Systems • Improved management of shared water resources • Central Asian Countries Initiative for Land Management • South Asia • Regional Air Quality Management • Regional Hazardous Wastes Management • Pacific Islands • Pacific Region Environment Strategy • Climate Change Adaptation and Renewable Energy • Coral Triangle Initiative

11. Environmental Financing Mechanisms • Global Environment Facility - ADB given direct access to GEF resources in 2002 ($45m and set to double in 2007) • Poverty and Environment Fund (Norway, Sweden…) • Carbon Markets Initiative – CDM projects • REACH (Canada, Denmark, Finland) • PRC Regional Cooperation and Poverty Reduction Fund • Asian Tsunami Fund (Japan) • Water Fund (Netherlands, others) • Japan Fund for Poverty Reduction – important for addressing social considerations • Japan Special Fund (largest and most flexible)

12. Climate Change Crisis • Problem unequivocal • Requires global response • Needs national and local action • Mitigation: reducing GHG emissions • Adaptation: coping with inevitable changes

13. UNFCCC: UN Framework Convention on Climate Change, overseeing the global climate change regime • Kyoto Protocol: 1st commitment period (to 2012), emissions reductions for developed countries (CDM) • Bali Action Plan (Road Map to Copenhagen) • - Mitigation - Financing • - Adaptation - Technology transfer • Targets: Developed countries 25-40% by 2020, 40-95% by 2050 (compared to 1990 levels) • REDD+: Reduced Emissions from Deforestation and Degradation as additional element Climate Change Responses

14. G-8 at Gleneagles: Brought MDBs into picture (CEIF) • European carbon trading and commitments (ETS) • Voluntary carbon markets development (C Neutrality) • Private sector belief and engagement (CSR) • Links to finance and economics (Stern Review) • Rising awareness from IPCC 4th Report (+Al Gore) • Policy development – eg, preferential RE tariffs • US policy shift and engagement of new President • Financial crisis inhibits funding, but “green stimulus”… Other Key Developments

15. Projected Global Impacts of Climate Change Global temperature change (relative to pre-industrial) 0°C 1°C 2°C 3°C 4°C 5°C Food Falling crop yields in many areas, particularly developing regions Falling yields in many developed regions Possible rising yields in some high latitude regions Water Significant decreases in water availability in many areas, including Mediterranean and Southern Africa Small mountain glaciers disappear – water supplies threatened in several areas Sea level rise threatens major cities Ecosystems Extensive Damage to Coral Reefs Rising number of species face extinction Extreme Weather Events Rising intensity of storms, forest fires, droughts, flooding and heat waves Risk of Abrupt and Major Irreversible Changes Increasing risk of dangerous feedbacks and abrupt, large-scale shifts in the climate system Source: Stern Review

17. Process Drivers of GHG Emissions by Sector Industry Residential and Commercial Buildings Agriculture Non-Energy-Related (34%) Energy-Related (66%) Transport Forestry Energy Supply Waste and waste water Total Global GHG Emissions: 49 Giga tons CO2e, 2004 Source: IPCC, Summary for Policymakers, 4th Assessment Synthesis Report 2007

18. Developed Country Emissions Targets

19. 25 United States 20 Average Canada 15 Annual CO European Union Japan 2 Emission 10 per Person (tons) India 5 China 0 1980 1985 1990 1995 2000 Comparing Per capita CO2 Emissions Source: International Energy Agency

20. EU ≈18% PRC ≈20% USA ≈20% Source: EIA (Energy-related CO2 emissions)

21. Status of Negotiations • Mitigation – Developed countries announcing targets, though less than needed; developing countries preparing national plans, but not yet tied to NAMAs • Adaptation – Impacts rising, NAPAs limited, Adaptation Fund just starting, financing uncertain • Finance and Technology – Public, versus private versus carbon market debate • Capacity Building – Effort to bring this in with limited success, tied to technology transfer

22. Negotiated post-2012 agreement Negotiations Working plan towards 2009 Copenhagen agreement Clear picture of post-2012 framework? Ratification From Bali to Copenhagen and Beyond… 2008 2009 2010 2011 2012 COP14: Poznan COP15: Copen-hagen COP13: Bali COP16 COP17 COP18 Dialogue under Kyoto Protocol Dialogue under UNFCCC New US climate change policy Italy G8 JapanG8

23. UNFCCC Secretariat’s Four Key Elements for Copenhagen Success • Developed countries – Ambitious emission reduction targets • Developing countries – Appropriate actions with associated support • Finance – Stable and predictable public funding and other mechanisms • Governance – Mostly to do with how to spend the public financing

24. Countries in the GHG Top 25 PRC (world’s largest emitter) Indonesia (80% from forests) India (big pop, rapid growth) Pakistan (hydropower?) Malaysia (going its own way) Thailand (keen to participate) Kazakhstan (will be in CTF) Viet Nam (CTF, Targeted Plan) Philippines (EE + adaptation) Key Countries by Impact Threat Low Islands: PDMCs, Maldives, Philippines, Indonesia Fragile Mountains: Nepal, Bhutan, Kyrgyzstan, Tajikistan, Pakistan, India River Basins/Deltas: Bangladesh, India, Viet Nam, Thailand, Indonesia, PRC, Cambodia, Lao PDR Arid/Drylands: All of Central Asia, Pakistan, Western PRC, Western and Southern India Differentiating DMC Interests

25. DMC Climate Change Responses • Majority of DMCs now have national climate change action plans or strategies – range of domestic policies, from RE and EE to adaptation • NAMAs - Could lead to Nationally Appropriate Mitigation Actions, under the Bali Action Plan • NAPAs - National Adaptation Programs of Action – 14 DMCs eligible (LDCF) • National Communications, Technology Needs Assessments, REDD Readiness Plans…

26. Sampling of Recent DMC Actions PRC: National Climate Change Plan Indonesia: National Climate Change Council India: National Climate Change Strategy Viet Nam: Targeted Program of Action Bangladesh: Climate Change Strategy & Action Plan Pacific: Climate Change Action Plan (SPREP)

27. ADB’s Climate Change Responses: History and Recent Developments

28. Almost 2 decades of work, beginning with ALGAS • Mostly helping DMCs explore mitigation options • Significant work on renewable energy (also called alternative energy) & energy efficiency • Work with GEF and also on CDM preparations • Some work on C sequestration; sustainable transport • Limited work on climate change adaptation (Pacific) • “Global life support systems” covered under the 2002 Environment Policy, emergence of “CC Program” • Establishment of RSDD-CC Brief History of ADB & Climate Change

29. Strategy 2020 and Climate Change ADB’s 2008-2020 Long-term Strategic Framework gives specific attention to climate change • Inclusive economic growth • Regional cooperation and integration • Environmentally sustainable economic growth • Environment, including climate change, identified as a key element of the development agenda • Environment, including climate change, listed as one of five core areas for ADB operations – aim is to scale-up support for projects that address climate change

30. ADB Responses to Climate Change

31. ADB Thematic Thrusts: Mitigation Promotetransition to low-carbon economiesthrough: • Energy efficiency and use of low-carbon energy sources (e.g. renewables) • Sustainable transport systems (moving away from reliance on motorized vehicles, roads and highways) • Improved urban sanitation and reduction of fugitive methane emissions (e.g. from landfills) • Sustainable land use/forest management (incl., REDD+)

32. Thematic Thrusts: Adaptation Help make economiesmore resilient to adverse climate change impacts through adaptation mainstreaming: • Incorporating vulnerability risks into national development strategies and actions • Increasing climate resilience of vulnerable sectors (e.g. water, agriculture, transport) • “Climate proofing” projects • Addressing social dimensions (gender, highly vulnerable groups)

33. Adaptation: Social Dimensions • Health – rollback on 3 MDGs; vector-borne diseases plus heatwaves • Education – rollback MDG2; but also an adaptation strategy • Migration -- 200 million migrants by 2050? Potential conflicts • Livelihood – widespread disruptions • Gender – women are vulnerable but also potentially strong change agents • Governance – strong local governance essential in adaptation; role of CSOs • Disaster Risk Mitigation – DRM-CC linkages…

34. Financing Thrusts:Mitigation and Adaptation Help make climate changemitigation and adaptation actions more affordableto DMCs by: • Mobilizing additional concessional resources • Catalyzing private sector capital • Maximizing the use of market-based mechanisms (e.g. carbon and insurance markets)

35. Mobilize Concessional Resources Catalyze Private Capital Maximize Market Mechanisms Financing Tools ADB Climate Change Program Advance Energy Efficiency and Low-Carbon Energy Sources Enable Sustainable Transport Policy and Application of Efficient Systems Mitigation “Thrusts” Promote Improved Urban Sanitation and Reduction of Fugitive Methane Emissions Promote Sustainable Land Use and Forest Management Incorporate Vulnerability Risks into National Development Strategies Increase Climate Resilience of Vulnerable Sectors Adaptation “Thrusts” “Climate Proof” Projects Address Social Dimensions

36. Regional Department Climate Change Implementation Plans (CCIPs) • Making Operational the Climate Change Elements of Strategy 2020: Assessing issues, needs, gaps, on-going actions, and existing frameworks • Identifying potential activities that can be supported in the form of policy TA, investments and capacity building • Mainstreaming in RDs’ core operations – CPS • CCIP Synthesis Document released during June 2009 High Level Dialogue

37. ADB Adaptation Actions • Preliminary portfolio at risk assessment • Developing project screening tool(s) • CCIPs and Country/Sector Assessments (e.g., Cooks, FSM, Palau, Nepal, Bangladesh) • Climate Proofing Pilots (Pacific, Viet Nam) • Knowledge Products • Capacity Development • Building Partnerships

38. CC Development Partners - Examples • Multilaterals and Other MDBs • Global Environment Facility (GEF) • Clean Energy Investment Framework (CEIF) • Climate Investment Funds (CIF) • Bilateral partners, others • Cities Development Initiative for Asia (GTZ, Sweden) • Climate Change Impacts on Coastal Cities Study (JBIC, WB) • Coral Triangle Initiative (Australia, US, GEF, NGOs ) • Knowledge Institutions • The Energy and Resources Institute (TERI), India: on clean energy • Tsinghua University, PRC: on climate change • National Hydraulic Research Institute of Malaysia (NARIM): water and climate change adaptation in SE Asia • PUB Waterhub, Singapore: on urban water management • Asian Institute of Technology (AIT), Thailand: on 3Rs

39. Knowledge Development • “Flagship” studies • Climate Change and Energy • Building Climate Resilience in the Agriculture Sector • Climate Change and Migration • Subregional studies on the economics of climate change: Southeast Asia, East Asia, South Asia, Pacific • High-level Dialogue on Climate Change and Annual Asia Clean Energy Forum (just completed)

40. Looking Ahead - Environment • Climate Change: Big Effort Now • Mitigation • Adaptation • Energy Efficiency, Clean & Renewable Energy – $1 billion/year target, just announced $2b/year in 2013 • Water Investments – $2 billion/year target • Urban Services Initiative – water and waste management, resource efficiency • Regional Approaches – subregional programs like the Coral Triangle Initiative, air quality (BAQ), environment in trade, regional public goods, knowledge management

41. Climate Change Impacts in Asia & Pacific • Reduction in GDP and living standards India and S.E. Asia could lose on average 2-3% and as much as a 9-13% (95 percentile) of annual GDP by 2100 • Changes in rainfall patterns, melting glaciers and loss of mountain snow Increased risk of floods and glacial outbursts. Special impact on large parts of the Indian sub-continent (>250m) and China (>250m) • Increase in sea levels South and East Asia could lose 15% of their land area. Small island states in the Indian and Pacific Oceans are acutely threatened • Declines in crop yields and impact on agriculture Strong impact on Central and Western Asia, where yields of predominant crops may fall by 15 – 35% once temperatures reach 3-4 C • Air Quality Complicating Influences Strong impacts where particulates high, though opportunities to pursue co-benefits

42. Integrating Climate Change Considerations into International Development Efforts • Sector adjustments • Energy – EE, EC, RE, product design, others • Urban – low-carbon, livable cities (air pollution) • Transport – cars -> public transport, rail, “mobility” • Water – big adaptation adjustments • Disaster preparedness & response • Finacial mechanisms, including microfinance

43. Conclusions • Effective procedures for building environmental and social considerations into projects • Growing demand for greater attention to environmental and social consequences of growth • Special attention to climate change considerations • Expanding investments and developing role for the private sector

44. www.adb.org/environmentwww.adb.org/climate-change Thank you