Greater Mekong Subregion (GMS) Climate Change and Environmental Sustainability Program (CCESP)

1. Greater Mekong Subregion (GMS) Climate Change and Environmental Sustainability Program (CCESP) Southeast Asia Department Asian Development Bank (ADB)

2. ADB Strategy 2030

3. Catalyzing and mobilizing financial resources for development

5. Why is climate change and environmental sustainability an ADB operational priority? • GEO-6 (March 2019): Climate change has become an independent driver of environmental change and poses a serious challenge to future economic development; Climate change will amplify existing risks and create new risks for natural and human systems (Well established). For example, In 2017, the number of undernourished people was estimated to have increased to 821 million, partly due to severe droughts associated with the strong El Niño of 2015–2016. • Achieving the 2°C Paris Agreement target could save US$ 54.1 trillion for a global expenditure of $US 22.1 trillion. • Achieving a 1.5°C target could lead to a health saving of $US3.3-8.4 trillion for India and $US 0.3-2.3 trillion for China. • Limiting global warming to 1.5°C will require (i) rapid and far reaching transitions in land, energy, industry, buildings, transport and cities and (ii) global net human-caused emissions of carbon dioxide need to fall by about 45% from 2010 levels by 2030, reaching net zero around 2050.

6. Meeting DMC Climate Ambitions: S2030 • Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability • Focus on low greenhouse gas emissions development, approach to building climate and disaster resilience, environmental sustainability, water–food–energy nexus • Scaling-up ambition by 2030: • At least 75% of the number of its committed operations(on a 3-year rolling average, including sovereign and non-sovereign operations) will support climate change mitigation and adaptation • $80 billion cumulative in climate finance from ADB’s own resources for the period 2019–2030 • Stock-taking by 2023: • Carry out a midterm review of the CCOF2030, including the viability of achieving 2030 target, and if necessary, recalibrate the operational framework, and targets

7. Climate finance: A key Pillar of Strategy 2030 ADB’s cumulative climate finance $15.4 Billion (2014–2017) ADB’s climate finance will reach $80 Billion cumulatively between 2019 and 2030 2017 Mitigation Finance by Sector 2017 Climate Finance by Region

8. Background • Increasing degradation in ecosystem services and environmental quality in the GMS • Growing threat of climate change manifested through droughts, floods, sea level rise, cyclones and other extreme events • Core Environment Program Phase I (2006-2012): • Strengthening key sector strategic planning processes • Supporting enhanced biodiversity and livelihoods in key biodiversity landscapes • Improving national environmental monitoring systems • Core Environment Program Phase II (2013-2019): • Enhancing environmental and social safeguards • Adapting to climate change and building resilience • Institutional capacity strengthening for environmental management • Ecosystem financing mechanisms

9. GMS CEPStrategic Framework and Action PlanEndorsed by GMS Ministers of Environment in Feb 2018

10. GMS Core Environment Program Strategic Framework and Action Plan Impact: Environmentally sustainable and climate-compatible economic growth and prosperity in the GMS Outcome: Environmental quality, green growth and climate resilience across the GMS enhanced Outputs: • Green technologies and sustainable infrastructure adopted • Investment in Natural resource management and ecosystem services increased • Strategies for green growth, climate resilience and disaster risk management implemented

11. Proposed next phase GMS Climate Change & Environmental Sustainability Program (CCESP) 2020-2025 1 ACliFF CCF – Adaptation + SECO/AUSTRALIA Theme6 Adaptation & DRM Theme 1 • CRM Support • NAP Support 3. CBADRM 4. EbA GMS Platform on Adaptation HLTF Built on: CEP Phase I and II and CEP Strategic Framework and Action Plan Aligned with: Strategy 2030 OP3 / CCOF 2030 EOD 2030 SDGs Green Technologies Theme 5 for Environmental Protection & Climate Action (AI, IOT, Block chain) NDF some from CCF TA Mitigation CC+DRM NDC Advance for Decarbonizing Agriculture, Energy & Transport GMS CCEP GT + SI Theme 2 Financing Facility for Green Infrastructure and Technologies CPI Finance Lab NR+ ES Climate Smart Landscapes Air, water (River + marine) & Land Pollution SFM, REDD+, CBFM, PES, BCC Theme 4 CC+DRM = Climate Change + Disaster Risk Management GT+SI = Green Technologies + Sustainable Infrastructure NR+ES = Natural Resources and Ecosystem Services ACliFF: Asia Climate Financing Facility SECO: Swiss – State Secretariat for Economic Cooperation CCF: Climate Change Fund CPI: Climate Policy Initiative CRM: Climate Risk Management in priority sectors NAP: National Adaptation Planning CBADRM: Community-based Adaptation and Disaster Risk Management EbA: Ecosystem-based adaptation AFD GEF CCF-REDD+ Sustainable waste management (circular economy) (Plastic) GEF AFD? Theme 3

12. Common elements across themes • Investment feasibility and pilot financing support; • Knowledge management support and technology uptake; • Policy and strategic planning support; and • Scalability of support depending on funding availability

13. Theme 1: Green Technologies Issues/Challenges for GMS Proposed Activities Green technology needs assessments Best practices for technology policy leapfrogging Improving digital literacy in farming communities Enhancing use of digital technologies to promote regional cooperation and integration Piloting of green/digital technologies Block chain-enabled climate action monitoring (e.g., emissions, off-grid energy) Pollution monitoring and management Sustainable forest management (e.g., drones) Mobile phone-based early warning systems • Digital technologies such as smart meters are projected to link more than 1 billion households and 11 billion smart appliances in interconnected electricity systems by 2040. • GMS countries’ interest in Industry 4.0 • Limited uptake of digital technologies • Internet of Things • Artificial Intelligence • Robotics • Drones and autonomous vehicles, etc. • Lack of enabling policy environment • Lack of skilled manpower in some countries • Lack of adequate demonstrations on nationally appropriate digital/green technologies for climate action and environmental sustainability

15. Theme 2: Financing for Green Infrastructure & Technologies Issues/Challenges Proposed Activities Analyze enabling environments to (i) develop public-private partnerships for green infrastructure (ii) assess public and/or private incentives; (iii) lower financial costs; (iv) develop uniform standards or registration conditions for climate investments; and (v) identify mechanisms to overcome barriers for accessing climate finance Strengthen capacity to mobilize climate and environmental finance Enhance capacity of financial institutions and the private sector to preferentially support green infrastructure and technologies Pilot innovative financing options (e.g. vehicles to catalyze private capital, blended finance, PPPs) for sustainable infrastructure and uptake of green technologies, (e.g., GMS low carbon technology marketplace) • Financing needs: Meeting the goals of Paris Agreement: $12 trillion over the next 25 years • ADB estimate on Infrastructure financing needs in Asia: $1.7 trillion per year ($26 trillion from 2016-2030) • Current infrastructure investments in Asia are well below levels that are needed - $880 billion vs. 1,300 billion • Southeast Asia: $213 billion per year ($3.2 trillion from 2016-2030) • Green infrastructure and technologies: No estimate • Financing for green technologies and digital technologies – extremely limited in GMS

16. Theme 3: Pollution and Waste Management Issues/Challenges Proposed Activities Provide policy advice and strategic planning support on Strategic Environment Assessment (SEA), Environmental Quality Standards, Economic instruments, and guidelines and standards on Air, Water, and Soil Pollution Control and Remediation Strengthen institutional capacities for data management, circular economy and sustainable waste management. Conduct feasibility studies on appropriate technologies for (i) integrated land management and (ii) rural waste management Prepare concept papers for sub-regional investments on rural waste management and pollution control • Resource demands in GMS continue to expand in line with the region’s increasing population, rapid urbanization and continued economic growth. • Increasing levels of air, water (river and marine) and land pollution throughout GMS & severe health impacts and growing burden on public institutions • Unsustainable rates of consumption and excessive waste throughout the value chain • The Ha Noi 3R Declaration and Ha Noi Goals (2013-2023) at the 4th Regional 3R Forum in Asia and the Pacific – Progress is patchy in GMS • Infrastructure planning for integrated pollution control and waste management (e-waste, marine litter and coastal plastic waste, food waste) needs improvements. • Regulations and standards for pollution control and watse management need further strengthening in terms of emforcement.

17. Theme 4: Climate-smart Ecosystem Landscapes Issues/Challenges Proposed Activities Analyze and design compensation mechanisms for ecosystem services focusing on climate change mitigation and adaptation benefits from a landscape perspective Provide GMS-wide policy support for agroecology, sustainable forest management, REDD+ and community-based forest management Strengthen institutional and technical capacity to mobilize financing for natural resource conservation and management Pilot ecosystem-based approaches and nature-based solutions for climate resilience and greenhouse gas mitigation • Land degradation has affected 23% of landscapes under human use, including two-thirds of agricultural lands. • The loss of biodiversity in GMS reduced ecosystem resilience and increased vulnerability to threats including negative impacts of climate change. • Institutional capacity for integrating macro-climate impacts into sustainable landscape management has improved in some GMS countries but scope exists for further improvements. • Financing available for protection of landscapes to deliver climate benefits in the GMS is still limited. • Very few pilots have been conducted in the GMS to demonstrate climate mitigation and adaptation benefits of ecosystem-based approaches or nature-based solutions.

18. Theme 5: Decarbonization of Agriculture, Energy and Transport Sectors Issues/Challenges Proposed Activities Provide policy support for implementation of Nationally Determined Contributions (NDCs) focusing on AFOLU, energy and transport sectors Prepare climate investment plans for priority sectors or subsectors based on analysis of NDCs Develop results framework indicators to monitor progress towards NDC commitments by selected GMS countries Strengthen institutional and technical capacity to catalyze public-private partnerships in decarbonizing AFOLU, energy and transport sectors Develop concept papers and implement pilot projects to promote greater uptake of low carbon technologies in partnership with the private sector Piloting and scaling up green freight options, including preparation of national road maps for green freight • Recent IEA study: • Energy demand grew at its fastest pace this decade, with a 2.3% increase globally and in SEA • Energy efficiency has been increasingly ignored, despite the economic gains from relatively simple measures to curb energy waste. • The current GHG emission rate, if it persists, will result in continuation of global temperature increase of ~0.2°C per decade crossing the 1.5°C Paris Agreement target by the 2040s. • Agriculture, forestry and land use (AFOLU), energy and transport sectors contribute most to the GMS emissions. • Decarbonizing strategies will generate technology innovation, business development and job creation, contributing to broader socioeconomic development of GMS.

19. Theme 6: Adaptation and Disaster Risk Management Issues/Challenges Proposed Activities Set up GMS-wide Platform on CCA and DRM in partnership with Global Commission on Adaptation to identify subregion-specific policy needs for CCA and DRM create mechanisms for attracting private sector participation in CCA and DRM – crop insurance, etc. Targeted support for operationalizing National Adaptation Plans as climate investment plans Capacity strengthening for mainstreaming climate risk management in development planning, early warning systems, and for piloting innovative disaster risk financing instruments Support pilots on community-based adaptation and disaster risk reduction by CSOs Demonstrate ecosystem-based adaptation approaches (alternative livelihoods, infrastructure upgrades, soil conservation, water regulation, etc.) • GEO-6 Regional assessment identified climate change adaptation (CCA) and disaster risk management (DRM) as the highest priority for action in Asia. • Nerly41 % of climate-induced disasters over the last 20 years occurred in Asia Pacific region (more than any other region in the world). Economic damage caused by disasters in Asia and the Pacific increased from USD52 billion in the 1970s to more than USD 523 billion in 2005–2014, which is 45 % of the global total. • Disaster risk in GMS is expected to increase further due to climate change and poorly or unplanned development in locations exposed to hazards. • Agriculture, water resources, energy and transport sectors need priority attention for CCA and DRM. • Improved CCA and DRM policies, enabling frameworks, capacity strengthening, increased investments are all critical.

20. Thank you. Southeast Asia Department Asian Development Bank (ADB)