Posted on 13 May 2021
(13 May 2021) - The Asian Development Bank has announced it will end funding for new coal-fired power plants, but kept gas in its portfolio of fundable activities, calling it a ‘transition fuel’.
Developing Member Countries (DMCs) in the region contribute 45% of global energy sector greenhouse gas emissions. For Asia to become truly sustainable, “economic development must be rapidly decoupled from its high dependence on curbing fossil-fuel use,” the bank said in its updated draft Energy Policy, released earlier this month for public comment. It will be presented to its Board in October 2021 for approval.
Vanessa Perez-Cirera, WWF Global Deputy Lead Climate & Energy said: “Given the urgent need to reduce greenhouse gas emissions, public funding, whether through multilateral development banks or other development finance institutions, should no longer be used for fossil fuel-based energy supply.” She said climate science clearly shows that keeping average global warming within a maximum increase of 1.5°C demands rapid movement of the global economy to a future powered by sustainable, renewable energy.
David McCauley, WWF Senior Vice President and Global Lead for Public Sector Partnerships, said, “While the proposed shift away from funding “new coal-fired capacity” supports what scientists say we must do, but it does not go far enough to help align the Asia-Pacific region to a path to staying within the 1.5°C global temperature goal of the Paris Agreement.”
The bank must forswear all investments tied to fossil fuel-based power, he said.
By adopting this wider policy, instead of enabling fossil fuel dependencies, ADB can build on its already substantial financing for solar and wind power, energy efficiency improvements, and other investments and support a consistent, rapid transition of the region to a clean and renewable energy future, said McCauley.
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