High-level Post-Paris Dialogue V.K. Duggal Senior Climate Change Specialist Asian Development Bank

Climate Change Challenges  Slide 1: Relevance of the PA to the regional development agenda The commitment by over 180 countries is the clearest articulation yet of the truly global effort that is needed to control greenhouse gas emissions and help adapt to climate change. The agreement to restrict warming to well below 2 degrees Celsius and to pursue efforts to reach 1.5 degrees is especially relevant to Asia and the Pacific: home to 4 billion people one of the most vulnerable regions in the world to climate change home to 5 of the top 10 GHG emitters (China, India, Japan, South Korea and Indonesia) Regional dialogue on how to implement the agreement and how to collaborate at a regional level is essential Substantial progress has already been made across the Asia and Pacific region for example developing and using clean energy, including both renewable energy and energy efficiency. The scale of growth in clean energy investments, enabling policies by government, and renewable energy capacity installed has been massive in the region. participating in carbon markets (e.g. CDM – more than 80% of registered CDM projects are in Asia Pacific) first and only bilateral mechanism – the JCM – initiated by Japan, with 10 countries in Asia Pacific having signed agreements employed diverse policy instruments e.g. domestic ETS (PRC), leader on REDD+ (Indonesia), clean energy levy (India) Ambitious INDC commitments across the region (e.g. Japan, 26% from 2013 levels; Singapore 36% from 2005 levels) But   The most important challenge for Asia Pacific going forward is to pursue climate change mitigation measures while the region is growing. The Asian economy as a whole is growing at a solid pace of 6% annually. It will expand from a third of world GDP today to about one half by 2050. Must adopt a low carbon development pathway, and commitment in Paris indicates willingness to do this. Key challenges: balancing economic growth and rapid urbanization with mitigation goals huge diversity across the region – not one size fits all – some of the largest emitters, and other countries with negligible emissions; physical geography varies: there are small, low-lying island states as well as landlocked, mountainous countries ensuring that the huge demand for infrastructure is met in a way that is climate resilient greater deployment of low carbon technologies offer key to achieve twin goals of development and mitigation identifying ways to encourage greater private sector involvement in climate change solutions

Paris Agreement - Relevance to the Regional Development Agenda The Asian economy as a whole is growing at a solid pace of 6% annually. It will expand from a third of world GDP today to about one half by 2050 Robust economic growth has led to significant rise in GHG emissions in the Asia and Pacific region, with Asia’s share of global GHG emissions projected to increase from 42.8% in 2010 to 51.2% by 2035 The region is also highly vulnerable to the impacts of climate change, presenting new challenges for development efforts Asia and the Pacific region is home to 4 billion people and one of the most vulnerable regions in the world to climate change The region is home to 5 of the top 10 GHG emitters - China, India, Japan, South Korea and Indonesia  Slide 1: Relevance of the PA to the regional development agenda The commitment by over 180 countries is the clearest articulation yet of the truly global effort that is needed to control greenhouse gas emissions and help adapt to climate change. The agreement to restrict warming to well below 2 degrees Celsius and to pursue efforts to reach 1.5 degrees is especially relevant to Asia and the Pacific: home to 4 billion people one of the most vulnerable regions in the world to climate change home to 5 of the top 10 GHG emitters (China, India, Japan, South Korea and Indonesia) Regional dialogue on how to implement the agreement and how to collaborate at a regional level is essential Substantial progress has already been made across the Asia and Pacific region for example developing and using clean energy, including both renewable energy and energy efficiency. The scale of growth in clean energy investments, enabling policies by government, and renewable energy capacity installed has been massive in the region. participating in carbon markets (e.g. CDM – more than 80% of registered CDM projects are in Asia Pacific) first and only bilateral mechanism – the JCM – initiated by Japan, with 10 countries in Asia Pacific having signed agreements employed diverse policy instruments e.g. domestic ETS (PRC), leader on REDD+ (Indonesia), clean energy levy (India) Ambitious INDC commitments across the region (e.g. Japan, 26% from 2013 levels; Singapore 36% from 2005 levels) But   The most important challenge for Asia Pacific going forward is to pursue climate change mitigation measures while the region is growing. The Asian economy as a whole is growing at a solid pace of 6% annually. It will expand from a third of world GDP today to about one half by 2050. Must adopt a low carbon development pathway, and commitment in Paris indicates willingness to do this. Key challenges: balancing economic growth and rapid urbanization with mitigation goals huge diversity across the region – not one size fits all – some of the largest emitters, and other countries with negligible emissions; physical geography varies: there are small, low-lying island states as well as landlocked, mountainous countries ensuring that the huge demand for infrastructure is met in a way that is climate resilient greater deployment of low carbon technologies offer key to achieve twin goals of development and mitigation identifying ways to encourage greater private sector involvement in climate change solutions

Implementation of Paris Agreement Focus on implementation The Paris Agreement is largely anchored on the implementation of Nationally Determined Contributions (NDCs) between 2020 and 2030 Most vulnerable countries will need to focus on adaptation Nationally Determined Contributions (NDCs) Signify the willingness of countries to take action to reduce their emissions, in the context of their national circumstances Starting point for bigger ambitions, enhancing targets to achieve at least the 2 degrees goal Clear ambitions from Asia and the Pacific Absolute emission reductions from business-as-usual levels Reduce emission intensity of growth Increase the share of renewable energy in the energy mix Improve forest cover Slide 2: How can Implementation of PA can help countries in the region   The focus must now shift toward implementation. Paris agreement is the framework for for future global action on climate change but significant work is needed to translate this into action. The Paris agreement is largely anchored on the implementation of NDCs between 2020 and 2030 The world’s most vulnerable countries will need to focus on adaptation. The financing decision agreed in Paris will go a long way to help develop low-carbon economies and build resilience and adaptive capacity for developing countries. This includes a provision to extend and scale up climate finance beyond 2025, starting with a funding floor of $100 billion annually between 2020 and 2025.  But, there are no explicit targets, and still substantial work to be done to mobilize 1) other sources of public funding aside from ODA and 2) mobilize private sector funding The nationally determined contributions (NDCs) made in Paris signal the willingness of countries to take action to reduce their emissions, in the context of their national circumstances.  While they do fall short of meeting the target of keeping global warming below 2°C, one must see this as a baby step, in the context of bigger ambitions. The Paris agreement aspires to efforts that could lead to keeping the global temperature rise to a more ambitious 1.5°C, early peaking of emissions, and a zero net emission world in the second half of this century. With these broad contours and a robust arrangement in place for monitoring, reporting and verification of mitigation actions; and a global review every 5 years with a view to ratcheting up ambition in NDCs, one must remain optimistic on the delivery of commitments. We have seen clear ambitions from Asia and the Pacific Many of them still rely on fossil fuels, but clear articulation in their NDCs to either undertake absolute emission reductions from business-as-usual levels (e.g. Bangladesh, Bhutan, Indonesia, Kazakhstan, Philippines, Tajikistan, Thailand, and Viet Nam), reduce emission intensity of growth (e.g. People’s Republic of China [PRC], India, and Malaysia), increase the share of renewable energy in the energy mix (e.g. PRC, India, Lao People’s Democratic Republic, and Papua New Guinea), or improve forest cover (e.g. Cambodia, Lao PDR, and Sri Lanka) are indicative of their resolve to shift their national emissions curves in the right direction.

Challenges for the successful implementation Developing an effective policy framework: NDCs are high level policy plans and translation of commitments at country level is critical Need capacity to assess different policy options and develop appropriate policy instruments Deployment of advanced and cleaner technologies: Without the use of frontier technologies, the targets set at COP21 will not be achieved Countries need to invest more in advanced and cleaner technologies such as energy storage, smart-grid technologies, carbon capture and storage etc. Cost and financing of low carbon technologies: Costs of cleaner technologies still offer a barrier – adding costs and risks to projects Innovative financing solutions are needed Slide 3: Challenges for the successful implementation   Political commitment to targets, such as at COP21, is important, but target setting is only the start. There remain significant challenges to the successful implementation of the ambitions under INDCs, across Asia and the Pacific Challenges are complex, and for example purposes I would like to highlight three today The first challenge is how to develop an effective policy framework. NDCs are high level policy plans and translation of commitments at country level is critical. What domestic policies will governments pursue, and at what pace will they proceed with implementing, or developing policy measures? Need capacity to assess options, develop appropriate policy instruments, design policy AND implementation measures (e.g. funds, grant schemes, taxes/levies) For example: Assessing whether market mechanisms may be appropriate e.g. a domestic ETS Specific regulations to incentivize development and deployment of low carbon technologies in the region Reducing fossil fuel subsidies Grant schemes to assist with financing Tariff reform to incentivize clean energy    The second challenge is the cost and financing of low carbon technologies and low carbon development more generally. The upfront cost of cleaner technologies whether renewable energy or energy efficiency are still too high. The uncertain and intermittent nature of renewable energy sources, such as solar and wind, adds costs and risks to projects. Lack of operating history for many RE technologies in countries Deters commercial finance we need to find better and innovative financing solutions. The third challenge is technological. Without the use of frontier technologies, the targets set at COP21 will not be achieved. Countries need to invest more in advanced and cleaner technologies but often, these technologies are deployed in more advanced economies first We should make further efforts to improve energy storage and smart grid technologies that integrate clean energy into power systems. To better use coal resources, we must develop carbon capture and storage technologies.

Opportunities for ADB Scale up climate finance ADB has announced its target to double climate financing to $6 billion per year by 2020 Support Policies, institutional and regulatory frameworks ADB supports governments in strengthening both policies and institutional and regulatory frameworks, developing clear strategies to achieve their NDCs through technical assistance Deployment of innovative and advanced technologies ADB supports innovative and advanced technologies for clean energy development in its member countries Slide 4: Opportunities for action – ADB The ADB is a key institution in the region with the ability to assist DMCs with many areas of climate change action Scale up climate finance: ADB has announced its target to double climate financing from $3 billion [per year to $6 billion per year by 2020. Of this, $4 billion will support mitigation and $2 billion will be for adaptation. [Out of the $4 billion for mitigation, $3 billion annually will go to clean energy projects on renewable energy and energy efficiency, such as solar and wind, and transmission projects with smart grid technology. Another $1 billion will be used on sustainable transport and mitigation efforts in the urban and water sectors.]   Support Policies, institutional and regulatory frameworks: ADB supports governments in strengthening both policies and institutional and regulatory frameworks, and enforcing them effectively. ADB is supporting governments to develop clear strategies to achieve their INDCs through technical assistance. Also provides technical assistance to other stakeholders (e.g. capacity building on carbon markets and bilateral mechanisms) [ADB encourages and assists countries in reducing fossil fuel subsidies. We are happy to see that the People’s Republic of China (PRC), India, and Indonesia have taken advantage of low oil prices to cut fossil fuel subsidies. They are using the resulting fiscal savings to invest in infrastructure including clean energy, as well as expanding targeted subsidies on poor households.] [Using policy based loans, ADB is promoting energy sector reforms to create an enabling environment for clean energy investment.] Technology: ADB supports innovative and advanced technologies for clean energy development in our member countries. [ADB works with authorities to ensure that more advanced and cleaner technologies are incorporated in its energy projects. For that purpose, we are reviewing our procedures for every stage of our projects, including project design, preparation, and procurement. Projects with advanced technology or green content will be prioritized for ADB financing. ADB has helped the PRC and Indonesia establish centers of excellence to expand their research on technology and related policies for carbon capture and storage.]

ADB’s Climate Finance Target  Slide 1: Relevance of the PA to the regional development agenda The commitment by over 180 countries is the clearest articulation yet of the truly global effort that is needed to control greenhouse gas emissions and help adapt to climate change. The agreement to restrict warming to well below 2 degrees Celsius and to pursue efforts to reach 1.5 degrees is especially relevant to Asia and the Pacific: home to 4 billion people one of the most vulnerable regions in the world to climate change home to 5 of the top 10 GHG emitters (China, India, Japan, South Korea and Indonesia) Regional dialogue on how to implement the agreement and how to collaborate at a regional level is essential Substantial progress has already been made across the Asia and Pacific region for example developing and using clean energy, including both renewable energy and energy efficiency. The scale of growth in clean energy investments, enabling policies by government, and renewable energy capacity installed has been massive in the region. participating in carbon markets (e.g. CDM – more than 80% of registered CDM projects are in Asia Pacific) first and only bilateral mechanism – the JCM – initiated by Japan, with 10 countries in Asia Pacific having signed agreements employed diverse policy instruments e.g. domestic ETS (PRC), leader on REDD+ (Indonesia), clean energy levy (India) Ambitious INDC commitments across the region (e.g. Japan, 26% from 2013 levels; Singapore 36% from 2005 levels) But   The most important challenge for Asia Pacific going forward is to pursue climate change mitigation measures while the region is growing. The Asian economy as a whole is growing at a solid pace of 6% annually. It will expand from a third of world GDP today to about one half by 2050. Must adopt a low carbon development pathway, and commitment in Paris indicates willingness to do this. Key challenges: balancing economic growth and rapid urbanization with mitigation goals huge diversity across the region – not one size fits all – some of the largest emitters, and other countries with negligible emissions; physical geography varies: there are small, low-lying island states as well as landlocked, mountainous countries ensuring that the huge demand for infrastructure is met in a way that is climate resilient greater deployment of low carbon technologies offer key to achieve twin goals of development and mitigation identifying ways to encourage greater private sector involvement in climate change solutions

Sum Up Asia and the Pacific is critically important for global climate mitigation efforts International and regional cooperation is very important Deploying clean technologies should be an integral part of the growth strategy for Asian countries Financing for climate change action is essential in order to implement commitments under the Paris Agreement

Asian Development Bank Thank you V.K. Duggal Senior Climate Change Specialist Fund Manager - Future Carbon Fund Sustainable Development and Climate Change Department Asian Development Bank Tel (632) 632-5937 vkduggal@adb.org