Building a resilient, inclusive and climate-just Asia Pacific
By RAIJELI NICOLE and LAN MERCADO | Oxfam in the Pacific and Asia

When the members and governors of the Asian Development Bank (ADB) meet in Nadi, Fiji on May 1-5 for its 52nd annual meeting, it will be a hugely symbolic moment for the climate vulnerable regions all over and the Pacific in particular providing an opportunity for these leaders to hear directly from the worst affected about addressing our climate change realities.

This meeting is the largest gathering of the ADB and its partners and provides a unique platform for a wide spectrum of stakeholders to engage directly with the institution on development issues and challenges confronting the Asia Pacific.

Held for the first time in the Pacific, the meeting gives us a chance to engage openly with those that wield power in the ADB.

While the threats and risks the Asia Pacific face from climate change are well known, the recent Intergovernmental Panel on Climate Change (IPCC) report on the impacts of global warming of 1.5°C above pre-industrial levels, tells us the worst is yet to come.

The report forecasts that within the next 10 years, should the average global temperature continue to increase unabated, climate-induced disasters such as extreme changes of weather patterns, coral bleaching, ocean acidification and sea level rise of apocalyptic consequences are imminent for particularly vulnerable countries such as those in the Pacific islands, in South East Asia and South Asia.

For all of us climate change is no longer just a development issue that needs to be mainstreamed in national plans – it is a matter of survival.

We urge Asia Pacific leaders to use this opportunity to raise six critical issues with the ADB that would help build a resilient, inclusive and climate-just Asia Pacific:

  • Accelerating energy transition;
  • closing the adaptation finance gap;
  • organically growing the domestic finance sector;
  • building the capacity of governments to effectively implement policies:
  • prioritising social accountability, ensuring financial transparency in climate finance, and;
  • creating meaningful participation for communities.

Accelerating energy transition

The Asia Pacific is estimated to have the highest number of upcoming coal-based power plants in the world with at least 120 under construction and twice that number planned. The emissions from the region are going to rapidly accelerate in coming years while large parts of the world including Europe and North America are reducing emission levels. Hence in the coming years the region would be key to ensuring that we meet the IPCC recommendations and help restrict climate change to 1.5°C.

An assessment of the current IFI lending, especially ADB lending in the region, indicates a strong emphasis on fossil-fuel based power generation as compared to renewables.

Under these circumstances it is essential for the ADB to accelerate and ensure complete alignment with the Paris Agreement- this means urgently tackling barriers on renewable energy and energy efficiency, and phasing out finance for fossil fuels. It also means the ADB should look to create shift among the financial sector in the region by encouraging their financial intermediary partners to eliminate exposure to coal and fossil fuel financing and encourage them to invest in sustainable green bonds and clean energy investments.

Another major area linked to energy transition where the ADB should be encouraged to play a leading role is the attainment of Sustainable Development Goal 7 on clean and affordable energy for all, where ABD investments can encourage clean cooking solutions, off-grid and mini-grid projects etc that meet the needs of women and vulnerable communities in poor, rural areas.

Finally, the ADB should look to create a strong strategic dialogue process with the Climate Vulnerable 20 group of countries (V20) working closely with them to support their 100 percent renewable energy goals and helping them champion renewables in the region.

Adaptation finance gap

The ADB needs to improve its approach to investments in adaptation and resilience-building. Akin to international trends, the Asia Pacific region has a significant adaptation finance gap.

Evidence suggests that the ADB continues to prioritise mitigation initiatives in the larger Asia Pacific region. Adaptation finance accounts for only 22 percent of the US$4.5 billion of climate finance the ADB mobilised in 2017.

Because of its dominant presence in the Pacific, the ADB needs to urgently recalibrate its funding approaches in the Pacific.

It needs to explore investment opportunities beyond the low-carbon route and relate it more to building resilience. Investing in mitigation solely on carbon-saving criteria is unlikely to be the optimal resilient route for the Pacific.

Most importantly, the ADB should aspire to a balance between mitigation and adaptation finance in line with the directions of the 2015 Paris Agreement, and elevate adaptation investments to be of equal significance to mitigation when investing in countries’ responses to climate change.

Organically growing private sector

The ADB needs to rethink its current approach of using public finance to leverage private finance. The ADB, like other large international financial institutions in the region, tends to prioritise investments in large-scale infrastructure (like renewable energy initiatives) as their approach to resilience-building in the Pacific.

Experts have indicated that this infrastructure-focused approach tends to discourage the local private sector from investing in these areas. From our perspective, the best way to engage the private sector is for decarbonisation in the Pacific to be ‘organic’, enabling domestic enterprises to create the market.

The domestic sector needs to move from mere uptakers of technologies to drivers of low-carbon technologies.

The underlying message for donors and development partners is the need to pursue a long-term view of channelling resources beyond just readying the private sector to catalyse public finance.

This recommendation, however, needs to be contextualised because not all Pacific island countries have an advanced private sector that can support such efforts.

Building institutional capacity

The ADB’s focus must turn to strengthening Pacific Island governments’ capacity and institutions. There is an urgent need for more investment to strengthen the governance structure of our governments when mainstreaming climate change across ministries, and implementing and enforcing policies.

The Pacific is rife with climate change policies but implementation is lacking as capacity and resources are not available. To effectively translate policies into concrete actions, donors need to shift away from viewing government as a donor-recipient and focus instead on building Pacific government capacity to effectively regulate and enforce these policies.

Social accountability and financial transparency in climate finance

Climate finance must transform the lives of the most vulnerable people in our communities- women, children, people with disabilities, and older people- and also ensure strong accountability mechanisms like transparency measures.

Providers of climate finance have an obligation to ensure that the most vulnerable –– are able to benefit from climate change-related investments.

Climate change investments must adopt a ‘do no harm’ approach so that everybody benefits and no one is left behind in the process. There is a need for donors to have:

  • grounded knowledge of the context and the needs of vulnerable groups;
  • to recognise and be informed of the behaviour, attitudes, characteristics expressed by women, persons living with disabilities, people living in rural and remote areas or outlying islands, and;
  • to integrate these into planning, design, implementation, monitoring and evaluation of climate change projects.

Also, how donors measure project impacts in the region must move beyond quantifiable figures (such as how many women benefit) to also include inequality and social accountability indices that capture the effectiveness of climate finance for the livelihood of communities.

The ADB should also strive to ensure that the robust financial transparency and accountability mechanisms they adhere to are not overlooked in the operations of their financial intermediary partners. This includes ensuring complete disclosure of all higher risk project related information, screening out intermediaries not willing to commit to such a disclosure process, incentivizing intermediaries to extend finance to only clients who consent to disclosing their financial relationship.

Meaningful engagement with communities

We need to move towards a financing model rooted in the principles of public, private, and people partnership (PPPP), where the views of all are taken into account when designing climate change responses.

Meaningful engagement and participation of communities is mandatory and should be strongly supported.

Climate change in the region needs to be framed from a ‘humanistic perspective’ – that the benefits are more than just economic.

It will be a hard conversation, but one that needs to happen now for the sake of all our survival. Having these conversations will also mean that we recognise there are power imbalances that need to be addressed so those people who are most vulnerable are also part of the decision-making processes.

People over profits

The Pacific region in particular is the ‘canary in the coal mine’ of what will happen to the rest of the world if global warming is not immediately halted.

The IPCC 1.5°C report clearly states that mitigation and adaptation/resilience initiatives need to be simultaneously scaled-up and implemented in an urgent manner.

The region needs to be given a chance to fight for its survival. Access to climate finance that allows for resilience-building in an inclusive and just manner is our best hope in a highly uncertain and ‘changing’ future.

Climate finance sources such as the ADB should start viewing the call for more adaptation finance in the Pacific as an ethical and moral investment, instead of a business-as-usual venture. Simultaneously supporting mitigation finance and supporting the process of energy transition in Asia, especially South East Asia, is crucial in the fight against climate change.

It is time that people instead of profits are prioritised because the cost of business-as-usual is one that the Asia Pacific will pay for dearly.

Raijeli Nicole is the Regional Director for Oxfam in the Pacific based in Suva and Lan Mercado is the Regional Director for Oxfam in Asia based in Manila, Philippines.