ADB pushes low carbon development plan for Asia

MANILA, Philippines – The Asian Development Bank urged countries in the Asia-Pacific region to start the transition to a low carbon energy future to combat climate change and achieve sustainable green growth.

The multilateral lending institution said without a proactive action to reduce carbon emissions, the region would easily account for more than 40 percent of global emissions in the next decade.

“With high rates of economic growth, the region must pursue a low carbon development path and make its contribution in cutting greenhouse gas (GHG) emissions to keep global warming well below two degrees Celsius compared to pre-industrial levels,” said Carmela Locsin, director general of ADB’s Sustainable Development and Climate Change department.

The Philippines was among the countries that adopted the 2015 Paris Agreement on Climate Change that covered a 1.5 degree Celsius warming cap for countries.

The deal requires developed economies such as the US and European Union to shoulder more of the burden of limiting climate change through pledging annual financial assistance to developing countries to help them respond to global warming. The agreement also requires developing nations, particularly large emitters such as China and India, to find ways of lowering emissions.

“The region, home to 60 percent of the world population, is especially vulnerable to the effects of climate change. Rising sea levels and extreme weather events of higher frequency and increased intensity pose vital threats to the health and safety of over four billion people in the region and particularly put the poor at risk,” Locsin said.

Locsin said the institution of policies creating the requirement and flexibility to reduce emissions in a cost-effective manner is essential to support climate change efforts in the region. Among these include the establishment of more emission trading systems (ETS) in the region and carbon taxation.

“Low carbon growth in the region offers opportunities not only for meeting out challenges posed by climate change but also for enhanced economic activities facilitating more efficient industries to compete more successfully on global markets,” Locsin said.

Emissions trading involves a regulating authority, usually a government body, that allocates for a price or for a free a limited number of permits for the discharge of carbon emissions for a specific time period. Companies or entities that need to increase their emissions may buy the emissions permits held by other participants in the system.

These permits may also be traded in a secondary market. This scheme has been proven to encourage entities to reduce their emissions or stick to a determined pollution cap.

There are currently 10 countries operating ETS  in the Asia Pacific region. These are Kazakhstan, Korea, New Zealand, China, Japan, India, Indonesia, Thailand, Vietnam and Australia.

The ADB is urging ETS areas to consider implementing linkages to encourage emissions savings.

“As we look to more concerted and ambitious actions to cut GHG emissions, the linking of ETS will be an important approach, it encourages emissions savings where they are cost effective, and minimizes the impact of carbon costs on competing industries through a common carbon pricing mechanism,” Locsin said.

An ADB study conducted in 2013 showed that ETS operating in the region accounted for 38 percent of global carbon emissions.

“Since then, the interest in developing carbon market activities in the Asia and the Pacific region has been growing,” the ADB said.

The ADB expects developing Asia to grow 5.7 percent in 2016 and 2017, contributing 60 percent to global growth.