Climate Change Operational Framework 2017-2030

Enhanced Actions for Low Greenhouse Gas Emissions and Climate-Resilient Development

• Publisher: Asian Development Bank
• Year: 2017
• ISBN:
  9789292579081
• Topic: Scienze biologiche
• Subtopic: Riscaldamento globale e cambiamento climatico

The Climate Change Operational Framework 2017-2030 is intended to provide broad direction and guidance for enhancing resilience and strengthening climate actions in the operations and business processes of the Asian Development Bank (ADB). It positions ADB to facilitate, collaboratively and proactively, a regional shift toward a low greenhouse gas emissions and climate-resilient development path. The operational framework provides guidance across all ADB sector and thematic groups to support climate adaptation and mitigation actions, operationalizing ADB's commitment to provide at least $6 billion per year in climate change financing from its own resources by 2020. It outlines actions and the institutional measures to be implemented to enable ADB to meet the climate needs of its developing members.

II. DIRECTIONS: THE CLIMATE CHANGE OPERATIONAL FRAMEWORK 2017–2030

29. The Paris Agreement, which entered into force in November 2016, will have an important role in framing global climate policy and incentivizing climate action. As of June 2017, 148 countries, including most DMCs, had ratified the Paris Agreement, indicating overwhelming support for the 2°C target, and the aspirational target of 1.5°C. To meet the 2°C target, global GHG emissions will need to stop growing before 2030 and start to decrease, with emissions peaking in some developed countries before they do in developing countries. The NDCs outline the contributions of each country to GHG emission reduction, and collectively establish a framework for meeting the climate challenge. The NDCs also outline adaptation needs and priorities, as well as the needed financing, technology and capacity-building support required from external sources to implement the mitigation and adaptation actions. Aside from the NDCs, a range of other climate and development plans and commitments of the DMCs will require external support.

30. The CCOF2030 will help ADB support climate actions proposed by its DMCs as its contribution to national sustainable development and international efforts to address climate change, while improving resilience to climate impact. ADB will take a customized approach, tailoring support to individual DMC circumstances, needs, and demand. ADB will engage proactively with its DMCs, taking into account that assistance will be demand driven but that demand from some DMCs for climate-related support is still latent, and not yet explicit. By focusing on key areas such as policy, financing, technology, knowledge and capacity, and partnerships and networks, and putting the full range of its assistance modalities, knowledge, and experience at the disposal of its DMCs, ADB seeks to become an even more effective partner of its DMCs in their pursuit of sustainable development.

31. Given the fact that most of the world’s climate-vulnerable people live in its DMCs, ADB will revise its approach to addressing climate change and disaster impact to decrease the acute and chronic impact of climate change and weather-related disasters. ADB recognizes that climate impact ranges from increasing frequency and intensity of extreme weather events, such as floods, tropical cyclones, and droughts, to slow-onset events, such as shifting precipitation patterns and rising sea levels. ADB is addressing this issue by ensuring that all its projects are climate sensitive and take climate risk into account in project design.²⁸ ADB will enhance this effort by strengthening assessments of both climate and disaster risk from the country and regional perspective, besides improving assessments at the project level. These measures will help in identifying common issues so that no-regret and low-regret solutions can be developed in a broader context, both in terms of spatial considerations and use of crosscutting approaches.

32. In keeping with the experience of the last few years, ADB expects demand from its DMCs for ADB assistance, including for private sector operations and public-private partnerships (PPPs), to increase rapidly and substantially because of the aforementioned increase in risks associated with climate change, and the commitments the DMCs have made under the Paris Agreement to contribute to climate action.

33. ADB has a comparative advantage in promoting regional cooperation and integration for its DMCs as financier, capacity builder, knowledge provider, and honest broker. These four roles in support of climate action are most distinctive, given the regional nature of the issue. In this manner, ADB will support regional responses and collective actions, particularly to improve policy coordination among DMC governments and the private sector, as well as partnership and networking among development partners, to increase the scale of GHG reduction efforts and the efficiency and effectiveness of adaptation measures.

A. Vision and Outcome

34. The CCOF2030 is intended to provide broad direction and guidance for enhancing resilience and strengthening climate actions in ADB’s operations and business processes, including country partnership strategies (CPSs), country operations business plans (COBPs), sector and thematic strategies, DMC programs and projects, TA, and knowledge and capacity-building support. The CCOF2030 gives ADB strategic guidance for climate action, while ensuring that ADB can remain responsive to the changes—climate impact; economic, social, and environmental developments; and progress on climate action and the SDGs—that are expected to take place in the region and at the global level in the 2020s, and are likely to be rapid and substantial.

35. The vision of CCOF2030 is enhanced action for low GHG emissions and climate-resilient development in ADB’s DMCs, with ADB contributing as a leading development partner of its DMCs through its strengthened portfolio of public and private climate operations.²⁹ This vision is aligned with the three strategic agenda items under Strategy 2020—inclusive economic growth, environmentally sustainable development, and regional integration—and will be integrated with ADB’s forthcoming Strategy 2030, which will guide ADB’s mission to end poverty, promote prosperity, and build a more inclusive, sustainable, and resilient Asia and the Pacific.

36. The CCOF2030 builds on the substantial experience and progress of the DMCs in addressing climate change and ADB’s own experience in scaling up climate-related assistance to its DMCs, particularly over the last decade. The analysis behind the CCOF2030 drew on ADB’s rich knowledge base. Six supporting studies were undertaken: (i) a research study to improve understanding of climate risks across the region;³⁰ and (ii) five background papers intended to assess opportunities for ADB to improve resilience through its water resource investments, scale up low-emission energy investments; strengthen the integration of resilience and low-emission objectives through urban operations; strengthen and simplify rapid access to advanced clean technologies; and optimize the achievement of select SDGs through climate operations.³¹ The actions and priorities outlined below benefited from consultations with various stakeholders during the preparation of the Strategy 2030, and a regional consultation workshop with the DMCs on the CCOF2030 held in March 2017.

B. Operational Principles

37. The CCOF2030 is grounded in five fundamental principles, which are intended to steer ADB programming and operational decisions in support of its target outcome (Figure 3):

Figure 3: Climate Change Operational Framework 2017–2030

ADB = Asian Development Bank, DMC = developing member country.

Source: ADB.

1. Supporting Ambitious Climate Objectives Articulated in Nationally Determined Contributions and Other Climate Plans

38. Ensure coherence of ADB policies, strategies, and sector and thematic plans with developing member country climate and development objectives. Given the substantial and long-term efforts to address climate change, many DMCs have expressed the need for support in their strategic planning, policy making, and investment at the national, subnational, and sector levels. ADB will ensure that applicable ADB policies and strategies are reflective and supportive of DMC needs related to adaptation and mitigation, in line with their overarching development objectives and acknowledging the evolving priorities, capacities, and vulnerabilities of the DMCs. ADB sector and thematic operational plans will support climate change mitigation and adaptation, and disaster risk management, as will the departmental, divisional, and sector and thematic group work plans.

39. Use country partnership strategies as important entry points for ensuring that ADB support is in line with developing member country climate priorities, including those articulated in the nationally determined contributions. ADB will ensure that successive generations of CPSs are supportive of a long-term transition toward low GHG emissions and climate-resilient development paths in the DMCs. Robust diagnostics, including climate models and analyses of climate risk, and adaptation and mitigation needs and opportunities, must underpin the CPSs. These diagnostics will inform country programming and project prioritization and selection by ADB. While current ADB private sector operations do not follow a similar pattern of programming, country analytical work will give due attention to the importance of scaling up the private sector’s role in mobilizing finance and investment.

40. Create demand for climate-related support. For a demand-driven institution like ADB, it is important to consider that many DMCs are still in the process of recognizing and articulating their climate needs and priorities, which may not be fully expressed in their current NDCs or climate and development plans. Some DMCs do not currently prioritize climate mitigation and adaptation in their interactions with ADB because of a lack of knowledge or sense of urgency, or for other reasons, including the historical role of ADB in the country or ADB’s accustomed role as financier of conventional infrastructure projects. In these cases, ADB may employ a more proactive approach that transcends the traditional, demand-driven model of assistance. ADB can strengthen DMC demand for support for climate action through deeper engagement with the DMCs in dealing with climate risks and opportunities, backed by targeted analytical and capacity-building TA. ADB may develop new modalities for working with DMC decision makers to help them understand vulnerability to climate impact as well as mitigation opportunities, and formulate relevant requests for ADB support. There is growing recognition that it is not sufficient to limit climate change support to ensuring that ADB projects are climate proofed. ADB is well placed to help its DMCs identify and implement the programs, projects, and policy and institutional reforms that are most urgent and critical for an effective climate response.

2. Accelerating Low Greenhouse Gas Emissions Development

41. Enable low-emission transformation. The DMCs’ NDCs recognize the need for low GHG emissions development. With the Paris Agreement now in force, the DMCs have agreed to ratchet up their emission reduction ambitions within the 2020–2030 time frame. Transitioning to low-emission development paths requires the implementation of low-emission urban, energy, and transport transformation strategies, and finance flows aligned with these strategies. ADB will enable this change by prioritizing scaled-up investments to decarbonize economies, making selective use of concessional finance for mitigation while increasing engagement through its private sector operations and supporting innovative PPPs, and promoting mitigation through multisector approaches, for example, low GHG emissions, climate-resilient urban development.

42. Prioritize scaled-up investment in low greenhouse gas emission energy generation and energy efficiency. This will require an approach to project selection and development that considers a project’s compatibility with a low GHG emission development path alongside its development impact. Currently, a project’s contribution to GHG mitigation is considered an upside, rather than a key project feature. As the sector with the largest share of GHG emissions, the energy sector continues to provide the largest mitigation potential. Renewable energy and energy efficiency in sectors such as transport, buildings, and industry can also contribute significantly to mitigation efforts. Though projects in these sectors are often economically and technically viable, a number of barriers can prevent energy investments from being realized. Overcoming these barriers may require ADB assistance.

43. Make selective use of concessional finance for mitigation. Recognizing that projects that mitigate GHG emissions often have higher upfront cost than conventional alternatives, and that concessional climate finance for mitigation is becoming increasingly scarce, ADB will focus on mobilizing concessional finance for mitigation projects that: (i) would become economically viable with the help of concessional financing; (ii) would not otherwise be implemented because of a lack of financial resources; or (iii) would not be implemented because of an information gap, mismatched incentives, or economic rigidity, such as the high transaction costs for small projects.

3. Promoting Climate Change Adaptation

44. Identify opportunities to contribute to increased climate resilience beyond climate proofing. The sectors with the greatest potential for scaling up adaptation investment are agriculture and natural resource management, and integrated water resources management in rural areas. Opportunities in urban settings commonly comprise interventions across multiple sectors, including drainage, flood risk management, water supply and sanitation, waste management, slum upgrading, housing, and transportation. Moreover, programs and projects in social development, such as investments in social protection and community-driven development, provide opportunities to deliver targeted support to the most vulnerable households and communities to strengthen resilience.

45. However, systematic approaches to optimizing such opportunities are not yet built into sector or multisector planning or lending operations. ADB currently has a relatively limited pipeline of projects in agriculture and natural resource management. The water resources pipeline, somewhat dominated by irrigation upgrading, appears to be expanding to include more system-wide integrated water resources management programs. Key challenges will be to direct investments towards highly vulnerable areas and communities and to prepare sector plans and investment programs and projects that include improving climate resilience as a priority objective.

46. Focus on urban resilience. The region’s growing cities concentrate many of the people most at risk from the impact of climate change. Some DMCs are made more vulnerable by informal settlements, lack of adequate infrastructure and public services, and limited institutional capacity. Given the urban growth expected in the region, particularly the rise of small- and medium-sized cities, much of the needed infrastructure is yet to be built, yielding significant opportunities for low GHG emissions, climate-resilient development from the outset. Cost-effective, large-scale solutions to adaptation are not going to be achieved through individual sector or technology solutions, but rather through systemic and cross-sectoral urban development strategies and investment.

47. Promote climate-resilient development at the community level. Since the impact of climate change and disaster risk is felt most by vulnerable communities, more investments targeted at the most vulnerable households and communities and encourage community-level solutions to strengthen resilience are required. Investments that adopt community-driven development approaches and operate according to the principles of local empowerment and demand responsiveness can support the needs identified by the communities, including the need to strengthen the resilience of community assets, diversify livelihood, implement ecosystem-based measures, and strengthen early warning systems. In fact, such investments allow the bundling of resilience-building measures at the community level with local development priorities, thereby making them more beneficial and...