The plan agreed at the United Nations talks in Lima, Peru is a key first step toward a global climate change agreement due to be finalised this year. It would be none too soon. The Intergovernmental Panel on Climate Change recently warned again that the world must act now to avoid irreversible damage.
Despite such clear warnings, many people believe economic growth and climate action are incompatible. The fact is, we can cut greenhouse gas emissions to avoid climate catastrophe and still enable strong economic growth. Countries that are vulnerable to floods, changing weather patterns, and other climate impacts like Thailand would be key beneficiaries even if they are not big carbon emitters themselves.
Many countries in Asia and the Pacific have put in place green growth policies. They have made strong commitments to pursue economic growth in a way that limits carbon emissions and ecological degradation. Contrary to perception, leaders of developing countries in the region understand the importance of such policies and wish to be a part of global efforts for mitigating emissions.
Three sectors stand out as crucial in the fight against climate change: energy, cities, and land use and agriculture
First, the Asian Development Bank (ADB) data forecasts Asia's share of world energy consumption will increase from 34% in 2010 to 51% in 2035. This 51% would be in line with its share of global population. However, Asia has an opportunity to make a special contribution to global efforts for mitigation. Greater investment in cleaner forms of conventional power, such as natural gas, or in renewable energy like solar and wind power is needed to answer that demand.
Increasing the energy efficiency of buildings, transport, and industries would also curb energy demand. The ADB estimates that investing just 1–4% of overall energy sector investment in energy efficiency measures like better insulation in buildings and efficient home appliances could meet 25% of developing Asia's projected increase in primary energy consumption by 2030.
Second, more than 40% of the region's population lives in cities. This will grow to around 65% by 2050. Asia needs to build better connected cities that use mass public transport. Cities also need to be more compact, with urban spaces incorporating homes, businesses and leisure areas.
India offers the classic example of the city challenge. As the second-largest urban system in the world after China, India is poised to have more than half a billion people living in cities by 2030. But the pace of growth in urban services and infrastructure lags far behind the population influx, resulting in serious environmental consequences. This is what the Global Green Growth Institute (GGGI) in India is trying to address. By defining green growth in the city context and drawing on existing best practices, GGGI is developing a framework for policymakers to integrate the "green growth approach" in their planning to simultaneously achieve multiple developmental objectives — economic, social and environmental.
Third, demand for food in Asia is rising as populations grow and become wealthier. At the same time, almost all suitable agricultural land is already under cultivation. Therefore, Asia must improve agricultural supply chains so that better farm-to-market roads and storage facilities reduce food waste. Innovative farming such as drip-fed irrigation will cut water and energy needed to produce food.
In the Philippines, the ADB is helping farmers introduce new types of salt-tolerant rice so that land lost to saltwater intrusion may once again become productive. Restoring forest areas is another effective way of sequestering carbon and conserving biodiversity. Paying farmers to retain and maintain their forests can provide rural incomes.
Despite encouraging signs in many Asian countries, much remains to be done.
Some governments are enacting such policies as subsidising gasoline while delaying much-needed investment in mass transit. Instead, they should phase out fossil fuel subsidies and use released resources to promote climate-friendly investment and innovation. Governments should also adopt well-designed regulations and predictable carbon pricing.
Green investment can be largely financed by Asia's domestic investors and by long-term institutional investors such as life insurance and pension funds. Asia should make more productive use of its own large pools of savings. Investment from outside Asia should be encouraged, too. The region needs to improve the investment climate and create more bankable projects, including through public-private partnerships. The ADB and other multilateral development banks are also scaling up their green investment, and organisations like GGGI are increasingly assisting countries to develop projects that are ready for green investment.
Taking this opportunity, we would like to stress that a strong and equitable international climate agreement is essential to support ambitious domestic actions by both developing and developed countries. Developed countries should show leadership by aggressively reducing emissions and by mobilising financial and technological support for developing countries.
In short, developing countries in Asia and the Pacific can grow and develop and still reduce the impact of climate change. But we must act now.
Takehiko Nakao is the president of the Asian Development Bank and a member of the Global Commission of the Economy and Climate. Yvo de Boer is the director-general of the Global Green Growth Institute.