ADB Bolsters Finance Focus at COP29

As COP29, dubbed the “finance COP” in Baku, Azerbaijan reaches the midway mark, discussions continue around the shape of the future framework of climate investments for developing countries. The New Collective Quantified Goal on climate finance is a key issue among the ongoing negotiations by country representatives.?

The annual climate change conferences represent crucial landmarks in ongoing efforts to address the climate crisis. The importance of this year’s gathering is accentuated by recent research indicating that greenhouse gases reached a record high this year and have continued to rise.?

While ADB is not part of the negotiations, as an observer it has an important part to play in exploring opportunities with partners and hosting a range of events to explain its initiatives to help Asia and the Pacific take climate action. ?

As the fastest growing source of climate finance, multilateral development banks (MDBs) like ADB are key to helping countries cut their carbon emissions and prepare their people, infrastructure, and economies for the impacts of a warming planet.?

MDB Joint Target Boosts Start of COP

A joint climate investment target announced by the MDBs on 12 November provided a fillip to COP29 and laid out an important piece of the climate finance puzzle. The MDBs agreed that by 2030, their annual collective climate financing for low- and middle-income countries would reach $120 billion including $42 billion for adaptation. ?

The banks also aim to mobilize $65 billion from the private sector. The joint statement issued by the MDBs also indicated convergence on how to measure MDB climate results.?

IF-CAP: Using Leverage to Generate More Climate Financing

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With every indication that 2024 will be the hottest year on record, the need to urgently scale up investments in Asia and the Pacific is stark. ?

ADB has been working with its partners to generate larger finance flows for its developing member countries. At COP29, ADB showcased what President Masatsugu Asakawa described as among the most innovative climate financing programs in the world. ?

With sovereign partners underwriting parts of ADB’s existing portfolio of loans, the Innovative Finance Facility for Climate in Asia and the Pacific (IF-CAP) will allow the bank to free up an estimated $11.25 billion in new, dedicated climate financing for the region.?

With Japan, the United Kingdom and the United States having recently signed agreements with ADB, their financial guarantees will add to those of other IF-CAP partners which include Australia, Denmark, the Republic of Korea, Sweden, and Norway.?

ADB Aids COP29 Host Azerbaijan, a Member Country Since 1999

COP29 holds special significance for ADB as it is the first time since COP13 in Bali in 2007 that a DMC is hosting a UN Climate Change Conference. ??

ADB worked with Azerbaijan to help fulfill its role as COP29 Presidency in preparing for the global negotiations and its Action Agenda. ?

ADB’s assistance to the country rests on the bank’s strong support for regional climate action through its Central and West Asia Regional Economic Cooperation (CAREC) Program – which counts Azerbaijan as a member.?

This week, CAREC ministers signed a declaration to work together to find innovative ways to address climate change, improve trade, and advance the Sustainable Development Goals.?

ADB has been helping countries in the region transition from a reliance on coal to renewable energy.?

ADB Launches Initiative to Build Resilience to Melting Glaciers

Glaciers in Asia, often referred to as the Roof of the World, are melting at unprecedented speed due to climate change.?

On 14 November, ADB launched a new regional program, Glaciers to Farms, to address the destructive effects of melting glaciers which threaten to change waterflows, disrupt lives, and destroy ecosystems. ?

The program, expected to mobilize up to $3.5 billion from actors including development partners and the private sector, will promote sustainable water use and food security in Central Asia, the South Caucasus, and Pakistan. ?

The first step will be a series of climate risk assessments focused on the state, rate, and implications of glacial melt in Azerbaijan, the Kyrgyz Republic, Tajikistan, and Uzbekistan, the program, supported by the Green Climate Fund.?

?Supporting Fiscal Resilience and a Just Transition

Two other key issues featured among ADB’s COP29 agenda include fiscal resilience and just transition. ADB launched a new report with recommendations on how finance ministries in Southeast Asia can align investment flows with low-emission and climate-resilient development. Well-known climate finance expert Lord Nicholas Stern joined a post-launch discussion.?

Meanwhile, an ADB-supported COP29 Presidency event focused on the need to ensure that no one is left behind as countries move to a carbon-neutral world. A Just Transition approach recognizes that moving to net zero is not only about cutting emissions – it is essential to avoid social and economic dislocation while creating new jobs, developing green industries, addressing regional development gaps, and protecting vulnerable groups. The event sought views on how to inform the design of ADB’s Just Transition Finance Facility.?

The ADB team in Baku will continue to monitor ongoing negotiations and explore new opportunities with other organizations on how best to address the worsening climate crisis. The repercussions of untrammeled global warming will be particularly severe in Asia and the Pacific, with a new ADB report forecasting a 17% GDP drop across the region by 2070 under a high emissions scenario.

In a positive sign among current efforts to reach a global agreement in Baku, the report also finds strong regional support for climate action – with a survey finding 91% of respondents across 14 economies viewing climate change as a serious problem.?

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