Updates to Towards Paris Alignment (2018): Following Up on MDB Climate Tools in 2021

General Information About Updates

Regular (non-bold) font indicates no change since 2018. Bold font indicates change since 2018.

Received responses from:                

• AfDB
• WBG
• IDB
• EBRD

No responses at time of writing (10/29/21) from:

• EIB
• ADB
• AIIB

Summary of MBD Carbon Emissions Mitigation Tools

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Notes

• The IDB has industry benchmarks for high-emitting sectors, such as chemical and cement plants. if the GHG emission intensity of a specific plant is significantly higher than the benchmark, the iDB will have to closely scrutinize the planning of the proposed plant for reduction options as part of its engineering review.
• The AfDB does not have an exclusionary policy for coal financing, but has not invested in a new coal project since 2015 and the Bank’s president confirmed in 2019 that the Bank would no longer finance coal projects.
• The ADB will review their coal financing policies in 2021 as part of their ADB Energy Policy Review.
• Exceptions to the natural gas exclusion list include those co-financed with the EU budget through the 4th list of Projects of Common Interest; gas-fired power plants whose emissions standard of 250g CO2e/kWhe is met over the lifetime of the plant; gas network projects planned to transport low carbon gases; and efficient gas-fired boilers applicable for buildings or small and medium enterprises in line with the EU Eco-Design Directive.
• Consideration will be given to financing upstream gas infrastructure that minimizes GHG emissions and improves energy access for low-income populations.

Sources

• Exclusion Lists: ADB (2009a); AfDB (2012c, 2013); AIIB (2016); EBRD (2014b, 2018c, 2020); EIB (2017a, 2020); iDB (2020.); WBG (2013, 2017a).

• Emissions Performance Standards: EIB (2013b); IDB (2011, 2013).
• Eligibility List: MDBs and IDFC (2015a); AfDB et al. (2018).
• Shadow Carbon Pricing: ADB (2017b); EBRD (2014a); EiB (2020); European Commission, (n.d.); WB (2017a).

GHG Account Policies by MDB

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Notes:

• Net emissions are defined as estimated gross emissions within the project-baseline scenario.

• The baseline scenario is estimated gross emissions without the project.

Sources:

• ADB (2010, 2017b); AfDB (2016); AIIB (2016, 2018); CiFs (2016, 2017); EBRD (2018, n.d., 2020); EiB (2014, 2015); IDB (2016a); IFC (2011, 2017b); WBG (2016).

Shadow Carbon Pricing at the MDB

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Notes:

• Based on the annual increase from the base year used by each bank. As each bank uses a different base year, these prices refer to different years.
• Net emissions = estimated gross emissions with the project – estimated gross emissions without the project (baseline scenario).
• The EBRD is currently revising its policy on shadow carbon pricing and plans to have the revisions complete by the end of 2018.
• ¹ Marked as an improvement because the EIB will no longer use the lower bound values for carbon pricing.

Sources:

• ADB (2016, 2017a, 2017b); AIIB (2018); European Commission (n.d.); EBRD (2013, 2014, 2018a); EiB (2013a, 2014); IDB (2020); IFC (2016b); WBG (2017b).

MDC Climate Finance Targets

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Notes:

• The AfDB is adopting a Climate Change and Green Growth Framework consisting of a long-term strategy, short-term action plan, and commitment date at which point the Bank will be Paris-aligned.
• The EBRD does not have separate targets for climate action. Nevertheless, it expects that the bulk of the finance will be classified as climate finance under the joint MDB approach, in line with the EBRD’s current investment focus.

Sources:

ADB (2015); AIIB (2020); AfDB (2016); EBRD (2020); EiB (2015a, 2015b, 2020); IDB (2020); WBG (2020).