Aligning the Asian Infrastructure Investment Bank (AIIB) with the Paris Agreement and the SDGs: Challenges and Opportunities
Future infrastructure investment in Asia is one of the factors that will be decisive in staying at 1.5°C or overshooting this threshold.
In its 1.5°C special report the IPCC concluded that unless mitigation ambitions are significantly raised no later than 2020 and global emissions are decreased by about 45% from 2010 levels by 2030, it will be almost impossible to prevent climate change from overshooting the 1.5°C threshold.
Fast and steep emission cuts require a fast socio-economic transition, enabled by more ambitious internationally cooperative and transformative policy frameworks and a strong shift in investments from unsustainable ‘brown’ (fossil fuels) to sustainable ‘green’ (renewable energies) investments. The IPCC calculates that the necessary energy investments between 2018 and 2050 for Asia alone are in the range of USD 300–1,300 billion per year.
The Asian Infrastructure Investment Bank (AIIB) pursues the goal of infrastructure development in Asia and Africa. It has committed to meeting environmental and social standards and implementing the Paris climate targets.
Germany is the largest non-Asian shareholder in the AIIB. The aim of Germany’s membership is to promote good governance, high environmental and social standards and sustainable development goals in the lending activities of the first multilateral development bank under Chinese leadership.
Three years after the Bank commenced operations, this report analyses the Bank's guidelines and past experience in selected countries (China, India, Bangladesh, Russia).
We find that the AIIB’s policies and strategies show a strong narrative of transformational change and sustainability. It is also the fastest-growing MDB in terms of both membership and capital investments. However, looking at investment criteria, the AIIB is not yet setting new standards in terms of Paris-alignment. The bank does also not yet reach international standards with regard to accountability, information disclosure and complaint handling.
However, the AIIB is a new bank. The review and amendment of its environmental and social safeguards, the further development of its sector strategies and project portfolios, and the elaboration of a Paris-alignment framework jointly with other MDBs, all announced for 2019 and 2020, provide the decisive window of opportunity to put things on track. The report provides policy recommendations in this regard.
Thomas Hirsch (Climate & Development Advice) (Lead author),
Sophie Bartosch (Germanwatch),
Yao Anqi, Guo Hongyu (Greenovation Hub),
Yulia Menshova (Russian-German Bureau of Environmental Information),
Ajita Tiwari Padhi (Indian Network on Ethics and Climate Change),
Md Shamsuddoha (Center for Participatory Research and Development)