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SOUTHEAST Asian countries need to invest $ 3.1 trillion in climate-adjusted infrastructure in the region by 2030 to recover from the pandemic, according to a new report from the Asian Development Bank (ADB).
In the report titled Green Finance Strategies for Post-Covid-19 Economic Recovery in Southeast Asia, ADB said investments are necessary to develop and grow green economies and create jobs for around 650 million people.
However, ADB said that these investments should be financed by innovative, environmentally sustainable and climate-resilient financial instruments, such as Covid-19 transition and green bonds, blue credits and green securitization efforts.
“A green recovery is needed for Southeast Asia to foster long-term sustainable job creation in a region with more than 650 million people,” said ADB Vice President Ahmed M. Saeed, who will speak at the forum on 9 October.
“It will drive equitable growth, protect the environment and help governments meet the goals of the Paris climate agreement. This timely book shows how green finance can stimulate growth in the region and overcome the challenges of climate change and a global pandemic, ”he added.
ADB said that green finance refers to all instruments, investments and financing mechanisms that contribute to the objectives of climate and environmental sustainability.
These aim to reduce greenhouse gas emissions, boost climate resilience, and improve environmental protection, such as air and water quality, ecosystems, and biodiversity.
These have been in demand as efforts against climate change are needed in regions like Southeast Asia. On the one hand, the cities and rivers of the region are among, if not, the most visible manifestations of the impact of overuse and contamination of natural capital resources.
The report said that more than half of the plastic that enters the world’s oceans can be traced back to five growing economies, four of which (Indonesia, the Philippines, Thailand and Vietnam) are in Southeast Asia.
He also noted that Myanmar, the Philippines, Thailand and Vietnam were among the top 10 countries most affected by extreme weather due to climate change in the past 20 years, according to the Global Climate Risk Index.
With this, the ADB said that governments should also use green finance to leverage national green goals and programs and move away from fossil fuel or carbon-intensive investments.
While some countries have embarked on green projects and bonds, the ADB said much more must be done to help Southeast Asian economies meet their large financing needs and accelerate economic recovery in a sustainable way.
The Philippines, ADB noted, has embarked on the Green Program that aims to provide P2.5 billion in assistance to make 145 cities more livable and sustainable.
The program is already part of “Build, Build, Build,” the Philippine government’s national infrastructure development program.
“[The report] aims to emphasize the critical role these instruments can play in leveraging scarce public sector funds to mobilize green funds from all sources, such as private pension and insurance funds, commercial banks, and capital markets. The combination of such funds will be critical to Southeast Asia’s recovery from Covid-19 amid the worsening infrastructure funding gap, which was more than 60 percent prior to the pandemic, ”said the Green Financing Catalytic Facility. (ACGF) of the Association of Southeast Asian Nations (Asean). Head of Unit Anouj Mehta.
The ACGF is a fund administered by the ADB and is part of the Manila-based multilateral development bank’s support for green infrastructure, including thematic bonds, national green finance vehicles, green projects and other initiatives.
With a growing green finance market in developing Asia, ADB committed $ 6.5 billion in climate finance from its own resources in 2019.
The ADB aims to reach a cumulative $ 80 billion from 2019 to 2030 in climate finance under its Strategy 2030, with a commitment to make 75 percent of all ADB projects climate relevant by 2030.
