Commodity Online
MANILA : The ADB on Tuesday announced the establishment of a new carbon fund that will use carbon credits generated beyond 2012 to provide urgently needed financing for clean energy projects in the Asia-Pacific region.

In a statement issued here by the ADB said the Future Carbon Fund could stimulate new investments in clean energy projects even after the current regulatory framework, based on the Kyoto Protocol's first commitment period, expires on December 31, 2012.

The ADB noted that the lack of a new international agreement on post-2012 carbon credits could hamper the level of interest in developing new clean energy projects and other climate change initiatives in developing countries.

'Without long-term price incentives for reducing greenhouse gas emissions, investment trends could quickly return to business as usual,' the bank said.

The bank said the Future Carbon Fund, with an initial target size of 100 million dollars, will provide financing up front for ADB-supported projects that will continue to generate carbon credits after 2012.

The new fund will complement ADB's ongoing Carbon Market Initiative, which provides finance and technical support to projects in the lead-up to 2012.

The ADB noted that the Asia-Pacific region is particularly vulnerable to climate change, with some 1.2 billion people facing possible freshwater shortages by 2020.

It added that crop yields in Central and South Asia could drop by half between now and 2050, while Asia's major coastal cities, including Bangkok, Jakarta, Karachi, Manila, Mumbai and Shanghai, and are vulnerable to flooding.

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