Climate Change Operational Framework 2017-2030 by Asian Development Bank;

Author:Asian Development Bank;
Language: eng
Format: epub
Publisher: Asian Development Bank Institute
Published: 2017-08-15T00:00:00+00:00

71. Support the use of carbon market mechanisms. The Paris Agreement paves the way for the resurgence of carbon markets even though they are likely to be decentralized and diverse. Given the level of GHG emission reduction targets set by some DMCs and their interest in using market mechanisms36 in achieving such targets, ADB will build on its established role as a key source of technical and financial support for the development and interlinking of carbon markets in the region. ADB will support carbon pricing initiatives across the region, including development of domestic ETSs in interested DMCs through TA projects and pilot programs to maximize opportunities to secure financial support from carbon markets. The development of ETSs, a new international carbon offset mechanism, as well as existing and future bilateral mechanisms, will strengthen the ability of such markets to grow and help the DMCs achieve ambitions set out in their respective NDCs by effectively accessing climate finance and adopting low emission technologies. Together with its development partners, ADB will support its DMCs in making policy choices for appropriate carbon pricing measures and in implementing these measures. ADB has included in its Guidelines for the Economic Analysis of Projects a shadow price for GHG emissions.37

72. Support the integration of climate considerations and disaster risk management during project preparation. ADB will support the early-stage integration of climate and DRM considerations during infrastructure project preparation and prepare stand-alone climate projects or projects with significant climate components. ADB has a number of project preparation facilities, such as the Asia Pacific Project Preparation Facility, established in 2014, which has provisions for prioritizing projects in sectors identified by the DMCs as contributing to climate resilience and sustainable development and regional economic integration. This is relevant for virtually all sectors, particularly when built infrastructure is being proposed.38 Box 7 presents a trust fund established to enhance project readiness.

Box 7: Project Readiness Improvement Trust Fund

The multi-donor Project Readiness Improvement Trust Fund (PRI Fund) was established in June 2016 to strengthen the climate mitigation and adaptation components of investment projects and improve project preparedness, in terms of design and procurement, for dealing with climate change impact. The PRI Fund will complement existing financing modalities of the Asian Development Bank (ADB) for supporting project readiness and help to reduce start-up and implementation delays. The PRI Fund received an initial contribution of €7 million from the Nordic Development Fund and is targeted at developing member countries in Southeast Asia.

See ADB. n.d. ADB Project Readiness Improvement Trust Fund. https://www.adb.org/site/funds/funds/project-readiness-improvement-trust-fund

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