Accelerating climate action in Asia: launch of new UK PACT projects

29 Nov 2023

The UK Partnering for Accelerated Climate Transitions (UK PACT) programme is launching 14 new projects under the Green Recovery Challenge Fund (GRCF). These projects will continue to accelerate climate action across Asia.

UK PACT GRCF supports low-carbon transitions across ODA-eligible countries. Since 2020, it has funded new ideas that address low-carbon challenges and gender equality and social inclusion.

To date, UK PACT’s Green Recovery Challenge Fund (GRCF) has funded 33 projects across four key themes. The themes are key contributors to decarbonisation strategies – greening financial systems (GFS), electrifying urban mobility (EUM), nature-based solutions (NBS) and clean energy transition (CET).

Supporting climate mitigation needs across Asia

Asia accounts for about half of the global carbon emissions and is the most populous region in the world. Fast-growing emissions and the impacts of climate change are a risk to economies and societies. This exposes Asian countries to shocks that can slow sustainable development. In 2021, the GRCF began working in Asia focusing on new projects to support climate mitigation under the GFS and EUM themes in India, Bangladesh, Thailand and Indonesia.

Greening financial systems

Strong financial systems help deliver a green and fair transition. Countries in the region can attract climate related investments by strengthening their climate risk management systems and building sustainable financial frameworks.

For example, a project by the Overseas Development Institute (ODI) in India supported Indian banks, financial institutions and the Reserve Bank of India (RBI) to include climate risks in their financial decisions. This helped nearly 200 staff in risk management and credit lending departments across 10 Indian financial institutions. The project also helped the RBI develop regulatory options to improve supervisory and credit guidance policies and produce an assessment of the financial sector’s exposure to transition risks in India.  

Electrifying urban mobility

While UK PACT projects are designed to address decarbonisation challenges, their impact goes beyond emissions reduction. For example, a project delivered by the United Nations Development Programme (UNDP) in Thailand supported the City of Nakhon Ratchasima (CNR) to electrify their urban transport system. The project analysed the city’s current transport system and spoke to users to understand the problems experienced by vulnerable groups. This helped UNDP to design a fully electrified and more inclusive transport system for CNR. The proposed design aims to improve access for all users, reduce traffic jams, improve air quality and reduce carbon emissions.

Scaling up impact

UK PACT’s new greening financial systems (GFS) projects aim to build greener and more inclusive financial systems. This can result in further investments needed to build successful net-zero economies that benefit all communities. Three new projects will address important challenges:

  • India: supporting Indian financial institutions to build stronger climate risk assessments and working with RBI on banking supervision of climate-related risks. The project will be implemented by ODI in partnership with Climate Bonds Initiative and auctusESG
  • Vietnam: helping local businesses to include climate risks and opportunities in their business strategies and work with policymakers to improve access to sustainable finance. The project will be implemented by The Asia Foundation in partnership with EY (Ernst and Young Vietnam)
  • Thailand: working with Bank of Thailand (BoT) to measure and manage climate-related financial risks using climate risk data and analytical tools. The project will be implemented by Oxford University in partnership with Theia Finance Labs (formerly, 2 Degrees Investing Initiative Germany) and SOAS, University of London

Forests and natural ecosystems are important for the livelihoods of local communities. However, these are threatened by climate impacts, land degradation and unsustainable practices in forestry and agriculture. UK PACT funds new projects under the measuring, reporting and verification (MRV) to improve decision-making and transparency. Projects will help communities and policymakers to develop MRV tools that will encourage sustainable agricultural and forestry practices. For example, one new project will focus on:

  • Embedding strategies and action plans to support a fair and equitable green transition for forest communities in Tamil Nadu – implemented in India by the Keystone Foundation

Building on the past three years, these projects bring new ideas and solutions to the UK PACT portfolio in Asia. They will respond to the most important climate challenges in each country and help increase impact and ambition across the region.

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