The Asian Development Bank (ADB) has just released its new Draft Energy Policy which states that the bank “will not finance any new coal-fired capacity for power and heat generation or any facilities associated with new coal generation.” In the draft, ADB concedes that its old energy policy “is no longer adequately aligned with the global consensus on climate change, [and the] ongoing global transformation of the energy sector.”
Chuck Baclagon, 350.org Asia Finance Campaigner issued the following statement:
We welcome this step because it brings to fruition the years of painstaking resistance from communities and organizations against energy projects that come at the expense of health, ecosystems and the climate.
The exclusion of coal in the new investment policy further affirms that coal is not only bad for the environment and our climate, it is also a bad investment because of the growing risk of coal infrastructure becoming stranded assets. Investors have already caught on to the fact that coal can no longer be the least-cost option for baseload demand, even before factors such as public health impacts and environmental damage are priced in.
We are concerned, however, that the new policy still states that the Bank may still finance natural gas projects (including gas transmission and distribution pipelines, LNG terminals, storage facilities, gas-fired power plants, natural gas for heating and cooking) under certain conditions.
It is imperative that support for all types of fossil fuels, not just coal, must end. To align with what ADB calls the global consensus on climate change, there must be a swift and early phase-out of existing fossil fuels projects with an accelerated and just transition to a clean, renewable and community-centered energy system.