U.S. BACKS CLEAN ENERGY -- IN ASIA

by Emad Mekay

(IPS) WASHINGTON -- The United States and the Asian Development Bank (ADB) are joining forces to coax Asian nations to switch to cleaner forms of energy, in hopes of averting a predicted spike in carbon emissions by the world's fastest-growing region.

"Action must be taken now," said Oliver Carduner, who directs the U.S. Agency for International Development mission in Asia. "If not, it will become much more costly to take action in the future."

USAID is co-hosting a three-day high-profile gathering, the Asia Clean Energy Forum, at the ADB's headquarters in Manila, where some 300 experts are working to churn out recommendations for Asians to ramp up clean energy across the region.

Ironically, the U.S. itself has been criticized in Asia, especially in China, as well as other parts of the world for trying to pass responsibility for dealing with global warming to developing countries while ignoring its own major role in fuelling climate change.

Three weeks ago, the agency released a report warning that emissions of carbon dioxide, the most common greenhouse gas, will more than triple from Asia's six largest nations by 2030.

It said that if alternatives like wind, solar, and biofuels are scaled up, they could reduce annual emissions of carbon dioxide in these countries by 3.5 billion metric tons, or 25 percent of projected increases above current levels.

The ADB, in which the U.S. is a major shareholder, has also been on board with the U.S. energy plans for the region.

Haruhiko Kuroda, the ADB's president, said in a statement Tuesday that his bank will actively promote clean energy sources and solutions like conservation, cap-and-trade schemes and emission taxes on greenhouse gases.

"Clean energy, including energy efficiency and renewable energy, needs to be actively promoted," Kuroda said.

At the start of the forum Tuesday, he told Asian nations to start planning "for the inevitable worsening of climate change," warning that greenhouse gases remain in the atmosphere for many decades.

The Manila-based Bank unveiled a number of incentives, including increasing spending on clean energy programs to one billion dollars a year.

"While this is only a small fraction of the region's needs, I am confident we can use this contribution to catalyse significant additional resources," Kuroda said.

The International Energy Agency says that the region will need four trillion to five trillion dollars in new energy infrastructure between now and 2030. Most of these investments are expected to be directed toward electricity, primarily coal-fired power plants, which are some of the most polluting energy sources.

The regional bank, which lent $8.5 billion last year, has also begun a comprehensive review of its energy policy. Officials say the result will be a new strategy to guide ADB energy sector operations to replace the 1995 energy policy that set the parametres and conditions for its energy loans.

The draft strategy paper that has emerged so far requires the ADB to assist its member countries in meeting "energy security" and help them "transition to a low carbon economy."

The final version is said to promote efficient and less polluting sources and technologies, and greater use of indigenous forms of renewable energy.

Two months ago, the Bank unveiled a program for co-financing, knowledge-sharing and risk-sharing with Japan and Australia. Soon to come are new credit products that will allow local banks in Asia to more aggressively finance clean energy projects, which they have traditionally shied away from for their perceived risks and high costs.

The ADB also pledged to share the risks with businesses switching to cleaner energy by offering to convert loans to grants if performance goals are not met.

"We have to wait and see how they do this transition," said Mishka Zaman of the Asia department at the Bank Information Center (BIC), a Washington-based watchdog of international financial institutions.

"At the moment they are putting in place vehicles to allow them to move in this direction, but at the same time, and in terms of fossil fuel lending, we do not see that," she said, referring to the continued lending to oil, gas and coal projects.

BIC says that the Asian Development Bank, as one of the main sources of development funding in the region, is largely responsible for setting economic development agendas in Asian countries, and its adherence to fossil fuel financing does not fit with its rhetoric on clean energy.

And while the United States and the ADB would like to see Asian countries shoulder the burden of cleaning up the environmental mess created by industrialized nations, activists say, efforts to cut greenhouse gases are complicated by the high demand for energy in the region.

"Asia faces a particularly daunting challenge in securing the energy it needs to support growth and poverty reduction in a responsible, sustainable manner," Kuroda acknowledged Tuesday.

Seventy percent of Asia's energy needs are met with fossil fuels, a primary source of greenhouse gases. Asia now accounts for one-quarter of the world's greenhouse gas emissions (the United States alone accounts for another 25 percent).

About one billion people in Asia, home to the largest population of poor people -- more than 600 million still live on a dollar a day or less -- do not have access to modern forms of energy.

Kuroda admitted that Asia was also affected by emissions from high energy consumption in industrialized countries.

Meanwhile, the United States and China have been squabbling over whose responsibility it is to cut emissions first.

China charges that current pollution levels are mainly attributable to decades of industrial activities by rich nations, especially the United States, the world's largest emitter of carbon dioxide. Washington has resisted caps on its emissions for fear that they will dampen its economic productivity.

"While actions at the national level are important, the case for collective global action is clear. There will be no winners on the planet if the current pattern of energy consumption continues to rise and greenhouse gas emissions remain unabated," Kuroda said.

Earlier this month, leaders of the Group of Eight most industrialized nations agreed in Heilingendamm, Germany to seriously consider at least halving global emissions by 2050 -- the minimum that scientists say is needed to avert the worst impacts of climate change.