As the Asian Development Bank (ADB) meets for its 2021 Annual Meeting, Recourse together with NGO Forum on ADB, the Big Shift Coalition and Fossil Free ADB call on the institution to step up its game and start addressing the climate crisis in a new publication, ADB’s Energy Future.
Despite pledging to support the Paris Agreement on climate change, the Japan-led multilateral development bank’s (MDB’s) policies are out of date. Significantly, its 2009 Energy Policy provides next to no limits to fossil fuel support – a crucial first step to become Paris aligned. 2021 is a vital year for climate action and ADB has several opportunities to step up its game. It is timely that ADB is finally reviewing its Energy Policy this year – and this needs to result in a new policy fully aligned with the Paris Agreement.
Coal is still allowed in the Energy Policy and scratching the surface of its portfolio, there are a number of loopholes and greyzones whereby ADB could in fact be supporting more fossil fuel projects than is immediately obvious. This includes financing through financial intermediaries (FIs) and support for transmission and distribution (T&D). ADB also supports natural gas, linked to significant rises in the world’s greenhouse gas emissions – effectively undermining the Paris goals.
As ADB updates its Energy Policy, it should take three key steps:
1) End all direct and indirect finance for fossil fuels. The new energy policy should explicitly end all ADB financing and support for all existing and new coal, oil and gas fossil fuel power generation projects and related infrastructure, including T&D.
2) Scale up funding to sustainable, renewable energy projects taking a people-centred approach that ensures a climate safe and equitable future. All energy projects funded by the ADB must help lift more people out of energy poverty and contribute to a just transition.
3) Demonstrate leadership as a forward-thinking climate bank. Becoming a true climate bank must include aligning all financing and activities — including private sector financing and investing through financial intermediaries — with a pathway that limits warming to 1.5°C, prevents social and environmental harms, and ensures meaningful consultation with impacted communities.
Read more and take action in ADB’s Energy Future.