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Multilateral development banking in a fragmented climate system: shifting priorities in energy finance at the Asian Development Bank

A Correction to this article was published on 26 February 2018

This article has been updated

Abstract

Multilateral development banks (MDBs) are increasingly supporting climate change mitigation efforts. However, little is known about how and why this role in climate finance has evolved, and how MDBs are managing this change internally. This paper addresses these questions through an analysis of energy support provided by the Asian Development Bank (ADB). The paper maps trends in the number and monetary value of ADB energy projects and technical assistance activities, presenting descriptive statistics on five categories of energy between 2000 and 2014. The results indicate that ADB while decreased its support for fossil fuel interventions, this sector continues to enjoy substantial funding support. At the same time, support for sustainable energy projects has also increased, reflecting the Bank’s evolving priorities and providing a rough proxy for its entry into the climate finance system. These new insights enhance understanding of the changing dynamics of multilateral climate finance and its complex relationship with development finance institutions. Given their financial resources and policy influence, it is essential for MDBs to support the goals of the new global climate finance architecture. But to be considered a serious actor in the climate finance system, ADB has to revisit its policy architecture, strengthen its accounting procedures, and coordinate its efforts with those of other actors across this fragmented system.

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Fig. 1

Source: Author calculations based on ADB Annual Reports 2000–2014

Fig. 2

Source: Author calculations based on ADB (2015a)

Fig. 3

Source: Author calculations based on ADB (2015a)

Fig. 4

Source: Author calculations based on ADB (2015a)

Fig. 5

Source: Author calculations based on ADB (2015a)

Fig. 6

Source: Author’s calculation from ADB (2015a)

Change history

  • 26 February 2018

    The article title was incorrectly published in the original publication. The correct title is given in this correction.

Notes

  1. 1.

    Monetary values reported in this article are in US dollars.

Abbreviations

ADB:

Asian Development Bank

AfDB:

African Development Bank

DMCs:

Developing member countries

MDBs:

Multilateral development banks

GHG:

Greenhouse gas

MW:

Megawatts

ODA:

Official development assistance

OECD:

Organization for Economic Cooperation and Development

SDGs:

Sustainable Development Goals

SE4All:

United Nations Sustainable Energy for All

UNFCCC:

United Nations Framework Convention on Climate Change

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Acknowledgements

I thank ADB project officers who were always quick in responding to my queries. I also thank Prosanto Pal, Jakob Skovgaard, Jonathan Pickering, Carola Betzold, and three anonymous reviewers for their comments. I also thank Cynthia Barakatt for reading the text and for suggesting improvements. Errors and omissions, nonetheless, remain my sole responsibility.

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Correspondence to Laurence Delina.

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A correction to this article is available online at https://doi.org/10.1007/s10784-018-9394-0.

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Delina, L. Multilateral development banking in a fragmented climate system: shifting priorities in energy finance at the Asian Development Bank. Int Environ Agreements 17, 73–88 (2017). https://doi.org/10.1007/s10784-016-9344-7

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Keywords

  • Climate finance
  • Multilateral development banks
  • Asian Development Bank
  • Mitigation finance
  • Sustainable energy