The Hindu : Business : Give incentives for low carbon technologies: ADB chief

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Wednesday, Oct 17, 2007
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Give incentives for low carbon technologies: ADB chief

Special Correspondent

‘Private-public sector partnership will play a crucial role’

NEW DELHI: Haruhiko Kuroda, President, Asian Development Bank, has underlined the need for policymakers in Asia to create the right incentives for development and use of low-carbon technologies, address market failures and barriers and attract financing.

Asia Pacific Partnership

Addressing an interactive meeting on Technology and Finance for Clean Development under the aegis of the Asia Pacific Partnership (APP) on Clean Development and Climate, Mr. Kuroda, said it was important to put a cost on the external impacts of carbon emitting activities, and to develop innovative mechanisms to finance the additional cost of new technologies.

The ADB President said effective mechanisms for cooperation, technology transfer and knowledge sharing would be needed and as APP has demonstrated, private-public sector partnership would play a crucial role.

Mr. Kuroda said ADB’s commitment to supporting Asia’s transition to a low carbon economy would be demonstrated in an updated energy strategy to be finalised soon.

With focus on India and China, he said the multilateral lending agency has earmarked $1 billion for funding clean energy and environment programmes in the region.

Financing

“The clean energy and environment programme comprises several distinct initiatives, including the energy efficiency initiative which aims to expand our clean energy investment to $1 billion by 2008,” Mr. Kuroda said. As part of the carbon market initiative, the ADB would provide upfront financing and technical support to developers and sponsors of the projects with Green House Gas (GHG) mitigation benefits, he added.

The lending institution, he added, would assist those projects which qualify for benefits as clean development mechanism (CDM) projects under the Kyoto Protocol.

James L. Connaughton, Chairman for Council on Environmental Quality of the White House, said that as per the estimates of the International Energy Agency, between 2005 and 2030, $20 trillion would be spent on energy-supply infrastructure, much of which will be invested in the APP countries.

Almost 85 per cent of this investment would have to come from the private sector. There was thus a dire need to harness the projected investment to advance clean and sustainable energy as the demand for energy is expected to rise by 50 per cent in the coming decades, he elaborated.

Meena Gupta, Secretary, Environment and Forests, said, “We need to look at the issue of financing of technology as well as providing resources for R&D into critical and affordable technologies. In this connection, we need to explore innovative means of financing while ensuring that current channels of financing are not diverted.”

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