The Asian Development Bank (ADB) is setting up a new fund aimed at slowing down the onset of climate change and to help the Asia-Pacific region adapt to the expected devastating impact of global warming.

The ADB will provide an initial $40 million to the Climate Change Fund, which will be open for further contributions from countries, other development organisations, foundations, the private sector and other sources.

ôThe purpose of the fund is to facilitate greater investments in developing countries in Asia and the Pacific to address the causes and consequences of global warming,ö says Werner Liepach, principal director of ADBÆs office of co-financing operations.

Liepach says money from the fund will be used to provide grant financing for technical assistance, investment projects, research and other activities, and interested parties are welcome to participate in the fund.

Climate change has been identified by several fund managers as one of the major long-term investment trends that will shape equities markets worldwide. Deutsche Asset Management, for one, has noted that spending and investments for climate change-related efforts will be on the rise and these will provide opportunities for portfolio investors.

WooChong Um, director of ADBÆs energy, transport and water division, says the Climate Change Fund expands the resources available to address global warming from only mitigation activities, such as clean energy and carbon financing, to a more holistic programme that includes activities in mitigation and adaptation as well as financing projects.

ôIn addition to supporting transition to low-carbon economies and establishing climate resilient infrastructure, this fund will allow ADB to address the cross-cutting social vulnerability issues related to climate change such as changes in livelihood, resettlement, and health impacts,ö Um says.

The Asia-Pacific region is particularly vulnerable to climate change, according to the ADB. Some 1.2 billion people could experience freshwater shortages by 2020, while crop yields in Central and South Asia could drop by half between now and 2050. AsiaÆs major coastal cities, including Bangkok, Jakarta, Karachi, Manila, Mumbai, and Shanghai are vulnerable to flooding. Within this century, residents of Tuvalu, the Maldives and costal Bangladesh may become so-called ôclimate refugeesö.

ôAsian developing countries are now the fastest growing source of new greenhouse gas emissions and they will soon be the largest absolute source,ö says Um. ôThis new fund will help us pool resources from around the world to invest here in Asia to help deal with this problem.ö

The ADB has been working on climate change for well over a decade. It already provides countries with access to new investment financing mechanisms in energy efficiency, renewable energy, and other low-carbon infrastructure. The new fund is part of an effort to increase its investments in helping countries adapt and avoid the negative consequences of climate change.