Asia is gearing up for increased infrastructure financing to support the drive for stronger economic growth. That's good news for narrowing the perennial gaps in energy and transport blocking growth in many economies. But, unless accompanied by protective safeguards, these projects risk damaging the environment, climate and communities — and hindering growth.
This must be a top concern for both the established lenders, such as the World Bank and Asian Development Bank (ADB), and the two new lenders for development: the Asian Infrastructure Investment Bank (AIIB), planned to be established in Beijing later this year, and the New Development Bank of BRICS countries. That is because failed safeguards cost far more than sound regulation and enforcement.
Recall the 2010 BP-Amoco Gulf of Mexico oil spill in the United States which cost $25 billion in damages and clean up. Air quality disasters from industrial emissions and from forest fires continue to hurt countries and their neighbors in East and Southeast Asia.