MANILA, PHILIPPINES: The Kyoto Protocol, which came into force yesterday, is an important tool to help the Asia and Pacific region achieve sustainable development, ADB President Haruhiko Kuroda said yesterday.
"Going forward, our greatest challenge will be to 'mainstream' more sustainable means into development," Mr. Kuroda told at special meeting held at ADB's Manila Headquarters to mark the event.
"The Kyoto Protocol, and specifically the CDM [Clean Development Mechanism], are key building blocks that allow us to begin this transformation."
The Kyoto Protocol, established in 1997, sets binding targets for the reduction of greenhouse gas emissions by industrialized countries to mitigate risks from global climate change. Developed countries and economies in transition agreed to reduce their greenhouse gas emissions by an average of 5.2% from their 1990 levels during 2008-2012.
Among other things, the Kyoto Protocol establishes the CDM, a new financial instrument under which a project in a developing country that reduces greenhouse gas emissions, relative to a baseline, generates emission reductions The project owner can then sell the emission reduction "credits," once they are certified, to an interested buyer, which might include an industrialized country or a specific industry.
"I have to admit that, as an economist, I can appreciate a market-based instrument that finally creates a monetary value for positive impacts on environment," Mr. Kuroda said. "However, we know that the CDM involves a new and complex process in the initial stages. Developing countries are thus least equipped to participate in this innovative process."
ADB's CDM Facility, announced in September 2003, therefore, assists developing countries and project developers in overcoming barriers related to CDM, Mr. Kuroda said. It provides technical and administrative assistance, and shoulders up-front costs of CDM due-diligence and regulatory requirements, until a transaction is successful.
He said ADB is one of the few institutions today that provide base financing to enable projects to reduce greenhouse gas emissions.
"Asia has become the hot spot for potential CDM projects in the past two years and the potential for greenhouse gas mitigation projects among our developing member countries looks very promising," he added.
"ADB will strive to channel more funds and capacity development assistance to its member countries, to enable them to realize the new opportunities afforded by the Kyoto Protocol and other carbon markets."
Also speaking at the meeting were Philippine Energy Secretary Vincent Perez and Environment and Natural Resources Secretary Michael Defensor.
In closing remarks, ADB Vice-President Geert van der Linden said that ADB will seek partners to invest in new projects that can reduce greenhouse gases while contributing to poverty reduction - such as renewable energy, energy efficiency, sustainable agriculture, and forestry.
He added that as one of the Executing Agencies of GEF, ADB will channel funds from the Kyoto Protocol's Adaptation Fund to help developing countries cope with the negative effects of climate change. "As Asia's development partner, we will strive to mainstream climate change adaptation in our development strategies and projects," he said.