THE Asian Development Bank (ADB) expressed support for carbon pricing schemes that will help developing Asia make global value chains more sustainable.
In its “Asian Economic Integration Report 2024: Decarbonizing Global Value Chains” report, the bank said that carbon pricing is the “key mechanism” for mitigating emissions.
“To significantly reduce carbon emissions globally, while also making sure climate efforts are more effective and sustainable, carbon pricing initiatives need to be extended to other regions outside the EU, especially Asia,” ADB Chief Economist Albert Park said.
The bank said Asian economies are “contributing substantially” to the rise in greenhouse gas emissions.
“The primary cause of human-induced climate change is the burning of fossil fuels, which increases GHG concentrations in the atmosphere. Carbon dioxide emissions from fossil fuels and industry cause most of the increase,” it said.
“Developing Asia accounts for a large and growing share of carbon dioxide emissions as global production structures are influenced by the rise of global value chains, population dynamics, and technological change,” it added.
In developing Asia, carbon dioxide emissions increased 114% between 1995 and 2018.
Apart from carbon pricing, the ADB also cited other mechanisms to decarbonize global value chains such as reducing the cost of green technology; promoting renewable energy research and development; diffusing technology to help economies with their green transitions; and encouraging further support from multilateral banks to fund green infrastructure.
As of 2023, the ADB approved $3.5 billion worth of loans to invest in 14 projects in the Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area.
The Department of Finance is studying the potential development of carbon pricing instruments through a carbon tax and emissions trading system. — Luisa Maria Jacinta C. Jocson
