Climate Finance Landscape of Asia and the Pacific

By Asian Development Bank

This report assesses climate finance in Asia and the Pacific and analyzes how it can be harnessed by developing member countries to expand climate action and spur low-carbon, resilient growth. Designed to help governments and development partners identify and address barriers, it offers a subregional breakdown and underscores the need for equitable access to funds to help countries meet their climate targets. It assesses financing gaps, considers how to increase investment, and outlines ways to scale up climate finance so that it reaches the countries and sectors that need it most.

• Language: English
• Publisher: Asian Development Bank
• Release date: Aug 1, 2023
• ISBN: 9789292702786

Book preview

CLIMATE FINANCE LANDSCAPE OF ASIA AND THE PACIFIC

AUGUST 2023

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2023 Asian Development Bank (ADB)

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Some rights reserved. Published in 2023.

ISBN 978-92-9270-277-9 (print); 978-92-9270-278-6 (electronic); 978-92-9270-279-3 (ebook)

Publication Stock No. TCS230305-2

DOI: http://dx.doi.org/10.22617/TCS230305-2

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Note:

In this publication, $ refers to United States dollars.

ADB recognizes China as the People’s Republic of China and Korea as the Republic of Korea.

Cover design by Ross Locsin Laccay

Cover photos: All photos by ADB.

Contents

Tables, Figures, and Boxes

Foreword

The Asia and Pacific region is a crucial part of global efforts to curb climate change. It contributes around 50% of the global greenhouse gas emission (GHG) total, and many countries in the region are vulnerable to the adverse impact of climate change. These countries include several small island developing states and 11 of the 20 countries most affected by extreme weather events in 2000–2019 (Germanwatche. V. 2021).

All developing countries of the Asian Development Bank (ADB) in the region have prepared their Nationally Determined Contributions (NDCs) and are at different stages in the preparation of their long-term strategies (LTSs) for low-emission and climate-resilient development, laying out their commitments toward achieving the goals of the Paris Agreement. These mitigation, adaptation, and other climate measures committed to by governments need financing in order to be realized. However, according to the Climate Policy Initiative (2021), current global investments fall short and annual climate finance must increase by 590% to meet the climate objectives set for 2030.

In Asia and the Pacific, a region where swift and massive climate action is necessary, governments, financing institutions, the private sector, and key stakeholders must work together to mobilize sufficient and timely climate finance to support such action. Besides exploring additional financing sources and making these sources available for climate action, all these players must examine the effectiveness of the current use of climate finance, and the first step in that direction would be to assess how climate finance flows from the sources to the recipients.

This publication assesses the climate finance landscape of Asia and the Pacific, and of each of the five subregions that compose it: Central and West Asia, East Asia, South Asia, Southeast Asia, and the Pacific. It traces climate finance flows—from the sources (e.g., public, private) to the financing instruments employed (e.g., loans, grants) and the uses of funds (e.g., adaptation, mitigation, sectors)—and seeks to reveal the gaps in climate finance so that these can be addressed.

Climate Finance Landscape of Asia and the Pacific is intended for sources, intermediaries, and recipients of climate finance—including governments in developing economies and developed countries, development finance institutions, the private sector, and civil society stakeholders, who can make climate finance available and accessible, and channel it to the countries, institutions, and sectors that need it most.

In 2021, ADB announced its ambition to increase its cumulative climate financing to $100 billion between 2019 and 2030, and to allocate $34 billion of this amount for cumulative adaptation and resilience investments, and $66 billion for cumulative mitigation financing. ADB also aspires to reach $12 billion in cumulative climate finance for private sector operations by 2030, and to crowd in an additional $18–$30 billion to support the development of more commercially viable and climate-friendly businesses. Guided by Climate Finance Landscape of Asia and the Pacific, ADB—as the climate bank of the region—can strategically direct resources to support the low-carbon and climate-resilient development objectives of sovereign and nonsovereign clients. In 2022, ADB committed climate financing from own resources reached $6.7 billion, of which $2.7 billion is on adaptation and resilience and $4.0 billion is on mitigation.

With this publication, ADB hopes to enhance collective knowledge of climate finance and help mobilize financing for the effective design and implementation of climate actions to achieve the global goals set in the Paris Agreement.

Noelle O’Brien

Director, Climate Change

Climate Change and Sustainable Development Department

Asian Development Bank

Acknowledgments

This publication is a knowledge product of the Asian Development Bank (ADB) under the regional knowledge and support technical assistance program Building Institutional Capacity: Delivering Solutions under Operational Priority 3 of Strategy 2030 (TA 6627-REG)—Study on the Climate Finance Landscape of Asia and the Pacific (54176-001).

It is based on the implementing consultant’s report prepared by the Climate Policy Initiative’s Luthfyana Larasati, Tiza Mafira, Pedro Fernandes, Baysa Naran, Rajashree Padmanabi, Chavi Meattle, and Muhammad Zeki.

The report was prepared under the overall guidance of Esmyra Javier, climate change specialist (climate finance), Climate Change, Resilience and Environment Cluster, Climate Change and Sustainable Development Department (CCSD), with support from Hannah Ebro (former consultant) and Marlene Vinluan, senior analyst and project coordinator.

The report benefited significantly from the comments and valuable insights by Jiro Tominaga, country director; Srinivasan Ancha, principal climate change specialist; Benita Ainabe, senior financial sector specialist of the Southeast Asia Department (SERD); Jeff Bowyer, senior climate change specialist of the Pacific Department (PARD); Dongmei Guo, environment specialist of the East Asia Department (EARD); Belinda Hewitt, senior disaster risk management specialist of SDCC (formerly from EARD); Nathan Rive, senior climate change specialist; Malte Maass, climate change specialist; Kathleen Coballes, climate change officer of the Central and