Coalition calls on Bank to stop fueling the climate crisis and go fossil free
As the Asian Development Bank meets today for its 54th Annual Meeting to discuss collaboration for a resilient and green recovery, new analysis shows that the Bank has spent $4.7 billion financing gas projects in the region. This undermines its stated commitments on climate and efforts to achieve a “prosperous, inclusive, resilient, and sustainable Asia and the Pacific.”
For the first time in a decade, the ADB is revising its energy policy. ADB management has conceded that its energy policy “is no longer adequately aligned with the global consensus on climate change, ongoing global transformation of the energy sector, and operational priorities of ADB’s new Strategy 2030.” Further, there is growing momentum in the European Union, UK and US to end public financing for fossil fuel infrastructure at home and abroad.
An international coalition of NGOs and movements has formed the Fossil Free ADB campaign to pressure the ADB to stop fueling the climate crisis and end its financing for fossil fuels. The coalition is also calling on the Bank to rapidly scale up investments for renewable energy, including making grants available for public and social ownership of integrated systems, energy efficiency, community microgrids to maximize energy access, and just transition for workers and communities dependent on fossil fuel production.
The climate crisis sends us a clear warning: we can’t keep powering our lives with dirty fuels from the last century. It’s time to power our communities with clean, renewable energy. To do so, we need financial institutions like the Asian Development Bank to immediately stop lending money for coal, gas and oil projects. We demand their leadership in this transition by excluding fossil-fuels in their investment portfolios and by putting in place more stringent environmental safeguards in their investment policies.” Chuck Baclagon, Regional Campaigner, 350.org, Asia
Gas expansion poses one of the greatest threats to meeting the goals of the Paris Agreement and averting the very worst impacts of the climate crisis. According to Carbon Brief, gas played a larger role in increasing global emissions than coal in every year between 2013 and 2019. Of the ADB’s $4.7 billion in financing for gas, the majority was allocated for gas-fired power plants (44%) and exploration/ extraction (21%), according to the analysis by the Fossil Free ADB coalition and Oil Change International.
Further, the ADB is playing a critical role in laying the groundwork for gas infrastructure development and expansion in Asia through its technical assistance program. The ADB approved $11.1 million in technical assistance grants from 2016-2020 to help governments prepare to build out gas pipelines, power plants and LNG terminals across Asia. These grants have had an outsized impact per dollar relative to loans and guarantees.
“The ADB knows better. The Bank knows fossil fuel energy is a key driver of climate change and that its members are among the most climate-threatened in the world, and yet the ADB still finances fossil fuel projects in our region. We demand the ADB stop financing coal, gas and oil.” – Lidy Nacpil Coordinator, Asian People’s Movement on Debt and Development
The ADB’s continued financing and support for gas infrastructure in Asia undermines its climate commitments and its leadership of the multilateral development bank working group on Paris Alignment. To demonstrate real climate leadership, the ADB must align all financing and activities — including private sector financing and financial intermediation — with a high probability 1.5°C emissions pathway and ensuring meaningful consultation with impacted communities.