Japan - $100M in grants - $2B in loans

KYOTO, Japan - Japan pledged up to $2.1 billion in aid Sunday to the Asian Development Bank to combat global climate change and promote greener investment in the region.

The money is part of a new initiative rolled out by Tokyo to support development amid increasing concern that Asia’s breakneck economic growth is leaving the environment in tatters. It comes just days after a breakthrough agreement in Thailand set the world’s first roadmap for fighting global warming.

Under Japan’s push, Tokyo will grant $100 million to set up two special funds aimed at environmental friendly economic development and investment. It will also provide up to $2 billion in loans to the Asian Development Bank over the next five years to further promote regional investment.

"Climate change is an imminent challenge," Japanese Finance Minister Koji Omi said while announcing the plan at the ADB’s annual meeting in Kyoto. "Each country should recognize the issue as their own challenge."

Tackling environmental problems is emerging as a top priority at the ADB, which was chartered four decades ago to fight poverty through economic growth. The ADB is working to counter a mentality that poor nations must sacrifice the environment to the march of progress, amid criticism that the bank funds such rampant development.

Over the last three decades, Asia’s energy consumption has grown by 230 percent, and it is expected to double again by 2030, ADB President Haruhiko Kuroda said Sunday. The region already accounts for a quarter of the world’s greenhouse gas emissions _ a leading cause of global warming.

Japan, which has the second-highest voting power in the ADB after the United States, will channel up to $100 million into two new funds - the Asian Clean Energy Fund and the Investment Climate Facilitation Fund.

The funds are envisioned as promoting renewable energy resources, such as solar power, and encouraging nations to build environmentally friendly infrastructure. They also aim to attracting greener investment.

"I expect this initiative will help ensure sustainable development in the region," Omi said...

"I think for quite some time, Asia has made the assumption that you grow first and worry about the environment later," Nag said. "I think we have overcome a main stumbling block, more or less, that was in the mind. That the environment is something you don’t need to worry about today."

In Kyoto, some 3,000 delegates from the ADB’s 67 member governments will debate plans to make the bank more responsive to environmental woes. The bank currently spends $1 billion a year on clean energy.

But activists assail the bank for continuing to fund coal projects, which are vilified as fanning global warming. The bank has no immediate plans to phase out funding coal, saying it’s more economical for poor countries...

The report, a summary of a study by a U.N. network of 2,000 scientists, said the world has to make significant cuts in gas emissions through increasing the energy efficiency of buildings and vehicles, shifting from fossil fuels to renewable fuels, and reforming both the forestry and farming sectors.