Asian Development Bank to end fossil fuel financing

Asian Development Bank to end fossil fuel financing

BAKU, Azerbaijan, Jun. 17

Trend:

NGO Forum on ADB, a network of over 250 civil society organizations across Asia calls out the Asian Development Bank (ADB) to end its green posturing and make real commitments towards a Paris aligned policy and appropriate clean energy investments, Trend reports with reference to ADB.

This demand coincides with this year's Asia Clean Energy Forum (ACEF) 2020 which started yesterday, June 16.

This year, ACEF’s thematic focus is centered upon building an inclusive, resilient sustainable energy future, recovering and rebounding from the social and economic crisis of the pandemic. Yet, the stark reality is that the ADB's policies and practices effectively fail to reflect such a vision, undermining rather than upholding the just, appropriately scaled, and participatory energy transition urgently needed by these times.

Rayyan Hassan, Executive Director of NGO Forum on ADB states that the “ADB Energy Policy 2009 is draconian and outdated and heavily embedded in coal and fossil fuels. The old policy is a complete contradiction to the Paris Agreement! A new ADB Paris 1.5 degree aligned Energy Policy is urgently needed to support Asia's renewable energy pathway to reach its NDC targets.”

ADB’s carbon-intensive energy portfolio is rooted in the fact that its “clean” energy agenda is a grave misnomer.

“There is no such thing like 'clean coal'- coal still stays the dirtiest energy resource. Even the newly announced Chinese Green Bonds will exclude so-called 'Clean Coal' projects from their portfolio. ADB should not stay behind,” said Nora Sausmikat of Urgewald, a Germany based NGO.

Although climate change is considered as a key issue in the ADB Energy Policy of 2009, the Bank itself admits that not all of its clean energy investments are considered climate investments. Without strict criteria for “clean” energy and a firm exclusion for the financing of coal projects, the 2009 Energy Policy has enabled the Bank to make dirty commitments, providing a crutch for the next generation of advanced coal and gas power plants.

Gerry Arrances of Center for Energy, Ecology, and Development (CEED) Philippines explained that “ADB must pursue and promote a 1.5°C Pathway—reaching a global CO2 emissions decline of 45% from 2010 levels by 2030, and net-zero CO2 emissions by mid-century—without false solutions”.

Hemantha Withanage from the Center for Environmental Justice, Sri Lanka said that “ADB has spent over USD 5 billion for dirty coal power plants and it has a historical responsibility for climate-induced migration. It is expected that over 200 million will become climate refugees by 2050 and ADB should make its energy policies to reverse this situation”.

It is also undeniable that the COVID-19 pandemic impacts the climate crisis. According to the Asian Development Bank (ADB) report in 2017 on climate risk in Asia, it was estimated that global flood losses are expected to increase to $52 billion per year by 2050 from $6 billion in 2005. The ADB report also identified that food shortage due to climate impacts could increase the number of malnourished children in South Asia by 7 million.

In the words of Sreedhar Ramamurthi, from Environics Trust, India: “the ADB (as with most of the MDBs) seems to be desperate to make use of the crisis and enhance its opportunities to lend. The ADB must realize that bigger loans for the same kind of destructive mega infrastructure projects cannot help the people nor the economy. In the case of India, the ADB in its tick-box mentality, claim that the emergency COVID-19 fast track loans are in tune with the country strategy! I will caution the bank and appeal to the ADB Board to ensure safeguards are not compromised in the name of an emergency or ‘unprecedented" situation’”.

The greenwashing approach of ADB in the climate policy space is now apparent. ADB’s climate responsibility is not in its statements in various global platforms but rather revealed through its energy sector investments. The ADB has heavily invested in fossil gas and related infrastructure in the last 3 years across Asia and is now facing the reality of stalled construction and rising environmental & social costs. There is also the issue of lack of meaningful consultations with local communities on project planning, and lack of pre-project information disclosure; two critical issues which have led to a disconnect from real sustainable development outcomes. It needs to be noted based on our assessment from 2010-2020 clean energy infrastructure in public health is an immediate need, which has seen nothing but neglect for a decade from the ADB, said the report.

Vidya Dinker of India based Indian Social Action Forum (INSAF) explained that "ADB has spent over 40 million USD in strengthening capacities in India, Indonesia, Kyrgyzstan, Sri Lanka, etc., yet not a single Country Safeguard Systems (CSS) is optimal for Safeguard Policy Statement (SPS) delivery. We hope the ADB will continue to take responsibility for delivering its own SPS until CSS achieve equivalency as articulated in the SPS 2009."

The future of ADB Energy investments is in renewable energy and community microgrids and it has no space for fossil fuels especially coal. The ADB should take a deep look at its lending portfolio in the energy sector and makes an immediate shift towards renewable energy pathways for a Paris Aligned COVID-19 recovery. Data suggests renewable energy will create more jobs and is cheaper to produce. Long-term investments in the sector are needed to ensure sustainable energy access for the most vulnerable. The age of fossil fuel baseload power generation has come to an end and ADB must take action in these last 10 years towards the 2030 IPCC P1 pathway, the bank said.

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