The Asian Development Bank announced on Wednesday that it would double its target for clean energy investments to $2bn a year by 2013, as it warned that climate change could offset the gains from Asia’s rapid growth in the last few decades.
Rapid economic growth in China and other countries tripled the region’s share of energy-related greenhouse gases in the last three decades, and Asia now accounts for a third of global emissions. This is seen to climb to 40 per cent by 2030, making Asia “the main driver of climate change,” according to Haruhiko Kuroda, the ADB president.
The ADB estimates that the region needs $240bn in the next ten years for developing alternative sources of power such as solar and wind, as well as projects that maximise energy use to significantly cut the growth in carbon and greenhouse gas emissions.
It warned on Wednesday that without these investment, climate change could offset the gains from Asia’s rapid growth and development in the last few decades. An ADB study estimated that four of southeast Asia’s biggest nations – Indonesia, the Philippines, Thailand and Vietnam – would suffer annual losses equivalent to 6.7 per cent of their gross domestic product. This would be more than twice the global average of 2.6 per cent.
ADB’s target investment is just a tenth of what the region needs, underscoring the bigger role that private investments must play, according to Mr Kuroda. “We expect that this contribution will catalyse significant additional resources from the private sector, carbon markets and other sources,” he said at the end of a two-day conference on climate change.
But the added impact of ADB’s new target investments in clean energy could be more modest than it would appear because the bank already lends much more than the $1bn target set four years ago. Last year, the bank provided almost $1.7bn for projects with clean energy components.
ADB’s clean energy investments last year helped finance such projects as a 45-MW wind power plant in Inner Mongolia, technical assistance to improve the rapid mass transport system in Lahore and a loan that helped American investors acquire and rehabilitate a 600-MW coal-fired power plant that was privatised by the government in the Philippines.
The bank’s loans for coal-fired power plants have attracted criticisms from environmental groups who dismiss the ADB’s clean energy initiatives as mere “climate change rhetoric.”
Greenpeace activists dressed as aliens from outer space staged a picket in front of the ADB on Monday to protest the bank’s “continued support for energy intensive, dirty and destructive projects such as coal, large hydropower and road projects promoting the expansion of fossil fuel private transport.”