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MANAGEMENT RESPONSE TO THE EVALUATION KNOWLEDGE BRIEF ON REDUCING CARBON EMISSIONS FROM TRANSPORT PROJECTS On 6 August 2010, the Director General, Independent Evaluation Department, received the following response from the Managing Director General on behalf of Management: I. General Comments 1. We welcome IED’s Evaluation Knowledge Brief (EKB) on Reducing Carbon Emissions from Transport Projects. The EKB provides important information and outlines of tools that can inform ADB’s efforts to assist its developing member countries (DMCs) in moving their economies onto lowcarbon growth paths and reducing the carbon footprint of Asia, as set forth in ADB’s Strategy 2020. 2. The EKB highlights transport as the fastest growing major contributor to global climate change due to the unprecedented increase in motorized transport, particularly in the Asia region. The EKB acknowledges ADB’s critical role in shaping and expanding transport sector investments in Asia, and confirms the role the sector plays in economic growth in DMCs. Improved accounting of the sector’s environmental impacts is important, while not diluting the sector’s broad role in the development agenda. 3. The EKB focuses on CO2 emissions. Transport is a multi-faceted sector with many, often conflicting demands and requirements. Balancing is required in aiming to reduce CO2 from the transport sector and taking into account other development impacts, in particular, on economic growth and on poverty reduction through improved access to health, education, employment and economic opportunities. One development impact should not override the others, and close cooperation with DMCs to support their priorities is essential. 4. The EKB provides an outline analytical tool to measure CO2 emissions through an assessment of a sample of recent ADB transport projects, and offers recommendations to pilot test emission measurements in future ADB transport projects. The EKB highlights that current data and tools to support CO2 impact analysis in the transport sector are inadequate to address emerging public policy analysis needs. The report recognizes that ADB is working in cooperation with other multilateral institutions and transport stakeholders in developing and enhancing analytical tools that take into account CO2 emissions, local air pollution and other costs and benefits of transport projects. While the report adds to understanding in the area, additional work is required before concrete actions can be taken to fully implement measurement of CO2 emissions in ADB’s transport sector. 5. Enhanced monitoring and evaluation of the sector’s carbon emissions, together with expanded environmental and other benefits and costs of transport projects, is in line with ADB’s Sustainable Transport Initiative Operational Plan 2 (STI OP),1 which will guide future support in the sector. As such, ADB is already working in the direction of the recommendations proposed in the EKB. 6. The EKB recommendations, if implemented fully, will have considerable resource implications for ADB as well as on the capacity within DMCs. The recommendations of the EKB need to be considered with current limitations in mind and progressively piloted, where applicable, to ensure that ADB can implement the recommendations in a systematic and sustainable way. II. Comments on Specific Recommendations 7. Recommendation 1: Adopt carbon emissions as a consideration for project design, review and appraisal. We agree, but with the understanding that a suitable approach will first be developed by ADB and other relevant parties (e.g., other multilateral development institutions, GEF, and relevant UN and bilateral agencies) following additional work. The EKB stresses the lack of adequate data; development of a suitable approach will require considerable improvements in the current data. ADB is working with other multilateral development institutions in this regard and will continue to do so. Once developed, the methodology will be pilot tested on selected new projects to ensure the robustness of the data and the methodology, while taking into account DMC capacities. 8. ADB’s STI OP highlights the need to address climate change in transport, including assessing carbon emissions during project design, review and appraisal. ADB has initiated work to review the transport sector project pipeline and to develop evaluation and monitoring mechanisms to ensure the mainstreaming of STI OP in future operations and support to DMCs. This will include a review of how projects are developed and an opportunity for alternative analysis and economic evaluation, including environmental and social benefits and costs. 9. Recommendation 2: Encourage modal shift in ADB investments. We agree. ADB’s STI OP outlines targets for future subsector support with a noticeable increase in low-emission modes such as public transport, nonmotorized transport, rail, and water transport. ADB will work closely with DMCs to identify suitable opportunities in line with DMCs’ development plans. 10. Recommendation 3: Consider systematic indicators to monitor the intensity of carbon emissions from transport investments in alignment with the emphasis given in ADB’s Strategy 2020 to climate change issues. We agree, but with the understanding that a robust methodology will first be developed by ADB and other relevant parties. There are currently limitations in data and suitable methodologies to monitor relevant indicators. Significant work is required before such indicators can be used meaningfully. The ADB STI OP proposes mechanisms to monitor future transport assistance and assess its sustainability under a range of economic, social, and environmental criteria. These will be developed and piloted in future transport projects to monitor the mainstreaming of STI in ADB operations. 1 ADB’s Sustainable Transport Initiative Operational Plan (STI OP) was approved by the President on 20 July 2010. 3 11. Recommendation 4: In partnership with DMC governments, align ADB’s sustainable transport initiative with nationally appropriate mitigation actions (NAMAs). We agree. This alignment will, however, depend on the status of development of NAMAs with transport components in DMCs. ADB will continue to work closely with DMCs to identify areas of assistance to promote low-carbon growth paths. Where applicable, these will be linked to relevant components of DMCs’ NAMAs.