Rationale for conducting the analysis

The world is not keeping up with its commitments under the Paris Agreement, and the commitments are not keeping up with changing climate. The countries of Central Asia are planning for the next 26th UNFCCC Conference of the Parties in Glasgow, and have the opportunity to show up with new, more ambitious nationally determined contributions and equipped with a portfolio of climate project proposals for investors. The contributors of this report hope it helps the region expand its vision of what climate financing is and achieve a new level of planning for climate investments, and equally hope it helps traditional and new donors see Central Asia’s potential to take climate action and to invest further resources in the region.

Through a rigorous approach to assessing the climate benefits of projects, analysts can capture and present climate activities and progress in a balanced picture that can help the countries set their climate priorities and determine where to invest. The results are likely to open eyes to the significant potential of the private sector to support climate initiatives, and may lead to more governmental incentives for renewable energy and other climate projects at a range of scales. Policymakers in the region may also discover how much hydrometeorological services contribute to progress on climate change, and the extent to which local efforts at afforestation add up to significant contributions. Governments can support these already existing domestic efforts, and other similar domestic work to great effect, but they have to understand them first.

A rigorous approach to assessing the climate costs of projects is also likely to help clarify climate priorities. When ambitious plans for investments in coal and cement collide with ambitious plans for clean energy, the analysis of costs and benefits can help policymakers determine a balanced course of action. An ongoing comprehensive assessment of the climate relevance of projects and programmes can provide an understanding of how and why to support the decoupling of the economy and the environment so that the economy can grow without a corresponding environmental cost. The knowledge of the distribution of climate-relevant investments can also help policymakers identify areas that need more support.

This approach implicitly encourages a transformation in the way governments think about climate finance. By counting the climate-related financing in a credible manner, governments position themselves to know how to imagine and propose co-financing of large global climate fund projects. They can also demonstrate to potential investors that they understand their own particular situation. The knowledge that comes from this approach opens up possibilities for developing rationales for climate activities through government actions — the imposition of regulatory requirements on mining operations to ensure climate safety at high elevations, for example. Large state-owned companies could demonstrate the value of investing in climate activities as an example that others may follow — sponsoring decentralized afforestation projects is one current example.

Finally, the knowledge developed in a comprehensive analysis of climate activities can inform the development of insurance programmes. By one estimate the average annual losses to disasters in Central Asia is $10 billion (GFDRR). The region does not even have adequate coverage available for severe weather events, much less long-term threats from droughts and other climate-related perils. The analysis of expenditures attributed to climate activities may help insurers understand the terminology and dynamics of climate risks sufficiently to make the calculations necessary to offer improved and expanded coverage.