DECARBONIZING THE

WATER SECTOR IN ASIA

AND THE PACIFIC
BEST PRACTICES, CHALLENGES, AND
OPPORTUNITIES FOR PRACTITIONERS
NOVEMBER 2023

ASIAN DEVELOPMENT BANK

CONTENTS

Figures and Boxes v

Forewordvi
Acknowledgmentsviii
Abbreviationsix
Executive Summary x

1 Introduction 1

2 Water Mitigation and Development

Challenges in Asia and the Pacific
Overview of Water Mitigation and Development Challenges
3

3
Defining the Water Sector 6
Water Supply 7
Wastewater, Sanitation, and Hygiene 8
Water Resources Management: Energy and Water Storage 13
Irrigated Agriculture14
Land Use and Forestry Resource Management 14

3 Water Sector Decarbonization Measures

Water Supply
18
18
Wastewater, Sanitation, and Hygiene 21
Water Resources Management: Energy and Water Storage 29
Irrigated Agriculture 30
Land Use and Forestry Resources Management 32
iv Contents

4
Policies and Tools to Support 35
Water Sector Decarbonization
General Water Policies and Tools 35
Water Supply Policies 40
Sanitation and Hygiene Subsector Policies 42
Water Resources Management Policies 44
Irrigated Agriculture Policies 45
Land Use and Forestry Resource Management Policies 47
International Cooperation 47

5 A Framework for Decarbonizing

the Water Sector in ADB Operations
Pillar 1: Accelerate Upstream Engagement and Build Demand for Mitigation-Focused Investments
50

51
Pillar 2: Adopt a Water Community Approach to Build Decarbonization Capacity 52
Pillar 3: Strengthen ADB Staff Capacity 53
Pillar 4: Foster Knowledge, Innovation, and Partnerships 54
Pillar 5: Mobilize Finance for Water Sector Decarbonization 54
Pillar 6: Spearhead Digitalization for Water Sector Decarbonization 55

6 Summary 57

Appendix: Technical Overview of Municipal Wastewater Treatment Plant Operations 58

v

FIGURES AND BOXES

Figures
1 Primary Energy Consumption in Asia and the Pacific, 2000–2021 4
2 Energy Consumption Carbon Dioxide Emissions in Asia and the Pacific, 2000–2021 5
3 Global Greenhouse Gas Emissions by Sector, 2016 6
4 Urban Water Cycle 34
5 Six Pillars Highlighting ADB Actions to Decarbonize the Water Sector 51
A.1 Typical Central Wastewater Treatment Plant 58
A.2 Anaerobic Digestion Process 60

Boxes
1 Sanitation, Greenhouse Gas Emissions, and Public Health 10
2 Water Supply, Wastewater Treatment, Sanitation, and Hygiene Subsectors Emissions 11
3 Energy and Water in Asia and the Pacific 13
4 Water in the Development of the Asia and Pacific Region 16
5 Sri Lanka as an Example 55
FOREWORD

T
he development for a prosperous, inclusive, resilient, and sustainable Asia and the Pacific will be dependent
on our capacity to implement measures to adapt to climate change and reduce carbon emissions. From
1970 to 2020, natural hazards in Asia and the Pacific have affected 6.9 billion people and killed more than
2 million. Many of these hazards resulted in water-related disasters such as floods and droughts.1 Similarly, the
water sector—hereby also defined as the “water nexus” to highlight the interconnection and integration with
other sectors—is an important entry point globally, as well as at the Asian Development Bank (ADB), to scale up
commitments to climate finance and to reduce the impacts of climate change on the most vulnerable countries
and individuals.

Water is the primary medium through which the impacts of climate change are felt. Yet, the water sector itself
has been widely overlooked as a significant source of greenhouse gas emissions and, as a result, caused missed
opportunities to mitigate climate change and support the net-zero carbon transition. The Paris Agreement,
established in 2015 at the 21st Conference of the Parties to the United Nations Framework Convention on
Climate Change (COP21), does not make a direct reference to water. However, water is identified as the number
one priority for many adaptation actions laid out in the nationally determined contributions and is directly or
indirectly related to all other priority areas. With the continuing demands for infrastructure investment and the
shift to a low-carbon growth trajectory, developing Asia and the Pacific needs to increase knowledge and policy
capacity to recognize the economic, social, and environmental costs and opportunities they would face during
the net-zero transition.

This ADB guidance note is second in a set of two guidance notes, which will help mainstream resilience, mitigation
approaches, and activities in the water sector of ADB’s developing member countries (DMCs). The first guidance
note, Mainstreaming Water Resilience in Asia and the Pacific,2 was published in August 2022.

This set of two guidance notes supports ADB’s wider commitment to scaling up climate actions in the region,
including the climate finance target, in line with building climate and disaster resilience—one of the seven
operational priorities of ADB’s Strategy 2030. In 2021, ADB elevated its ambition to deliver climate financing
to its DMCs to $100 billion during 2019–2030, including $66 billion on climate mitigation and $34 billion
on climate adaptation. To help achieve these objectives, ADB in 2022 launched at the COP27 the Asia and
the Pacific Water Resilience Initiative, commonly known as "RUWR: aRe yoU Water Resilient?," a multipronged
endeavor to support local-level authorities of its DMCs to mainstream water security and resilience. Two of
the key actions under the Asia and the Pacific Water Resilience Initiative are additional grant and technical
assistance mobilization, and rapid capacity building and sharing of knowledge, tools, and solutions toward
resilience and decarbonization.

1
United Nations Economic and Social Commission for Asia and the Pacific. 2021. Resilience in a Riskier World: Managing Systemic Risks from
Biological and Other Natural Hazards—Asia-Pacific Disaster Report 2021. Bangkok.
2
ADB. 2022. Mainstreaming Water Resilience in Asia and the Pacific: Guidance Note. Manila.
Foreword vii

ADB remains committed to being a trusted knowledge partner of stakeholders in its DMCs, including
governments, development partners, and the private sector—and providing them with the tools, capacities,
resources, and information needed to enable transformational change toward a water-secure, green, resilient,
inclusive, and sustainable Asia and the Pacific. Alongside the first guidance note, this second guidance note,
Decarbonizing the Water Sector in Asia and the Pacific, maps challenges and opportunities, and entry points for ADB
staff and DMC water sector stakeholders, water nexus entities, and project implementing agencies in the region
toward the achievement of resilient and decarbonization outcomes.

Fatima Yasmin
Vice-President (Sectors and Themes)
Asian Development Bank
ACKNOWLEDGMENTS

T
he guidance note Decarbonizing the Water Sector in Asia and the Pacific was prepared by the
Strategy and Partnerships Team of the Asian Development Bank (ADB) following extensive
consultations with internal and external stakeholders. Alessio Giardino, senior water specialist
(Climate Change) and Geoffrey Wilson, senior water resources specialist, led its preparation under the
guidance and direction of Neeta Pokhrel, director, Pacific and Southeast Asia Team (former chief of the
Water Sector Group) and Satoshi Ishii, director, Strategy and Partnerships Team.

Colleagues from the Climate Change and Sustainable Development Department, Sectors Group, and
Private Sector Operations Department provided valuable feedback and support. The team is especially
grateful to David Morgado (senior energy specialist), Pedro Miguel Pauleta De Almeida (senior urban
development specialist), Hisaka Kimura (advisor, Private Sector Operations Department), Noel Peters
(principal investment specialist, Climate Finance), and Mischa Lentz (senior urban development
specialist, Finance and Investment) for their inputs.

Craig Hart (executive director of the Pace Energy and Climate Center) served as primary co-author
of this report. Casper van der Tak (ADB consultant) peer reviewed the document. Jason Beerman
(ADB consultant) edited the document with support from Joanna Brewster (ADB consultant).
Gino Pascua provided graphic and visual support to the publication. The team is also grateful to
Guy Howard (professor at the University of Bristol) for his feedback and additions.
ABBREVIATIONS

ADB Asian Development Bank

ASEAN Association of Southeast Asian Nations
BOD biochemical oxygen demand
CDM Clean Development Mechanism
CH₄ methane
CHP combined heat and power
CO₂ carbon dioxide
COVID-19 coronavirus disease
CPS country partnership strategy
DMC developing member country
ECAM Energy Performance and Carbon Emissions Assessment and Monitoring Tool
GHG greenhouse gas
G-Res GHG Reservoir
GWI Global Water Intelligence
IPCC Intergovernmental Panel on Climate Change
N₂O nitrous oxide
NDC nationally determined contribution
OECD Organisation for Economic Co-operation and Development
PRC People’s Republic of China
SRI system of rice intensification
STEEP Screening Tool for Energy Evaluation of Projects
UNFCCC United Nations Framework Convention on Climate Change
WASH water, sanitation, and hygiene
WWTP wastewater treatment plant
EXECUTIVE SUMMARY

W
ater is essential for life and is intertwined with virtually every aspect of Asia and the Pacific’s
development path. Yet, the water sector—hereby also defined as the “water nexus” to
highlight the interconnection and integration with other sectors—has been widely ignored as
a significant source of greenhouse gas (GHG) emissions. As a result, water has often been overlooked as
an opportunity to mitigate climate change.

The Asia and Pacific region faces extraordinary challenges in the water sector both in terms of climate
resilience and emissions. One such challenge is that it is home to 60% of the world’s population, yet only
possesses about a third of global freshwater resources.1 The Asia and Pacific region accounts for half
of global warming forcings in the water infrastructure space (encompassing water supply, wastewater
treatment, sanitation, and hygiene) on a 100-year basis, taking into account energy emissions as well
as carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) emissions from water treatment,
wastewater, and sludge treatment for sewer-connected systems and on-site sanitation.2 Estimates
of GHG emissions from wastewater alone indicate that these emissions could be as high as 1.8% of
anthropogenic global GHG emissions, roughly equivalent to aviation sector emissions.3 The broader
water sector’s emissions may be as much as two to three times higher.4

These complex and intertwined challenges of water security, resilience, and decarbonization in Asia
and the Pacific require immediate actions that must be complementary, synergizing opportunities
not only to pursue adaptation and mitigation goals together, but also to optimize outcomes at the
nexus of water use, conservation, land use practices, and overall development goals of the developing
member countries (DMCs) of the Asian Development Bank (ADB). All this must be done while
finding appropriate cost recovery mechanisms for the DMCs or even reducing costs. Improvements in
delivering water, sanitation, and hygiene services to all (and especially under-resourced populations);
managing water resources; and adapting all water and sanitation infrastructure and communities they
serve for greater resilience are essential to Asia and the Pacific’s continued growth and well-being. A
coherent approach to mainstreaming resilience and decarbonizing water sector operations is needed
to ensure that ADB can effectively support and enable policies and investments in its DMCs, leading
to a net-zero transition, while also supporting the DMCs’ development and resilience goals. ADB has
therefore developed a set of two guidance notes to help mainstream resilience and decarbonization in
the water sector in Asia and the Pacific.5

1
United Nations Department of Economic and Social Affairs. International Decade for Action “Water for Life” 2005–2015.
2
Global Water Intelligence (GWI). 2022. Mapping Water’s Carbon Footprint: Our net zero future hinges on wastewater. Oxford. p. 5.
3
GWI. 2022. Mapping Water’s Carbon Footprint: Our net zero future hinges on wastewater. Oxford. p. 2.
4
For example, wastewater treatment plant emissions are estimated as high as 5%, according to World Economic Forum. 2022. How tackling
wastewater can help corporations achieve climate goals. 19 October. The wide range in estimates reflects the likely problems with reporting.
Country greenhouse gas inventory reports to the United Nations Framework Convention on Climate Change, for example, suggest a lower
range, but these numbers do not necessarily focus on the water sector.
5
The first of the two guidance notes is ADB. 2022. Mainstreaming Water Resilience in Asia and the Pacific: Guidance Note. Manila.
Executive Summary xi

This guidance note Decarbonizing the Water Sector in Asia and the Pacific explores the best practices,
challenges, and opportunities that have broad application for supporting climate mitigation and (in
parallel) fostering water and sanitation security and resilience in the region. It is primarily designed for
water professionals and policymakers supporting or working in ADB’s DMCs.

The guidance note evaluates the following five water-related subsectors where ADB is actively
supporting its DMCs:

(i) Water supply

(ii) Sanitation, including wastewater, non-sewered sanitation and drainage, and hygiene
(iii) Water resources management: energy and water storage
(iv) Irrigated agriculture
(v) Land use and forestry resource management

As regional water infrastructure needs are growing rapidly, and these are long-term assets with
several decades of expected service, decarbonizing water infrastructure is essential for avoiding
carbon lock-in over the lifetime of the infrastructure. Monetizing those decarbonization opportunities
wherever possible will be essential to ensure the provision of affordable water and sanitation
services and resources.

Opportunities include increasing water efficiency and promoting water conservation by residential,
business and industrial, and agricultural users, which would greatly reduce the volumes of water
required to be treated by water supply and wastewater infrastructure, and thereby reduce GHG
emissions. Water efficiency reduces water consumption as a measure of the amount of water required
for a particular purpose. Water efficiency differs from water conservation in that water efficiency
focuses on reducing water waste, not forgoing use.

Water efficiency and conservation efforts must be joined by all sectors of the economy—households,
industry, and agriculture—to significantly reduce water sector energy consumption and GHG emissions.
Agriculture, which accounts for an estimated 70% of global water consumption,6 must be a focus
of water conservation programs. As the dominant consumer of water, the agriculture sector
presents opportunities for high water savings with attendant reductions in energy consumption
and GHG emissions.

Technology will play a critical role. Water supply, wastewater treatment, and reservoir management all
present opportunities to transition to renewable energy, as well as to adopt innovative GHG reduction
or avoidance techniques, such as avoiding anaerobic reactions that produce CH4, and, if these
emissions are unavoidable, to capture the CH4 and utilize it to produce energy.

For effective and integrated water resources management, planning and design are essential
considerations to reduce reservoir GHG emissions. Siting, design, and land use practices should reduce
the flooded area used for water storage and cultivation and aim to prevent or reduce the amount of
fertilizer and other organic matter that enters reservoirs and that ultimately lead to GHG emissions.
These methods include locating siting reservoirs in upland areas with lower temperature microclimates
that reduce aquatic plant growth,7 and promoting agriculture practices near reservoirs such as

6
Organisation for Economic Co-operation and Development. Water and agriculture.
7
R. M. Almeida et al. 2019. Reducing greenhouse gas emissions of Amazon hydropower with strategic dam planning. Nature Communications.
10 (1).
xii Executive Summary

Water supply facility in the Marshall Islands. The

Ebeye Water Supply and Sanitation Project is linking
all households in Ebeye, Marshall Islands to upgraded
freshwater and sewage facilities that reduce water leaks
and sewage overflows (photo by Eric Sales).

conservation tillage, crop rotation, and cover cropping that can reduce soil erosion, reduce fertilizer use,
and avoid fertilizer runoff into reservoirs, as well as sequester carbon in soils.8

For Asia and the Pacific, changing large and smallholder farming techniques and building capacity of
institutions and farmers to reduce water consumption, and hence emissions, is especially critical for rice
production. Rice farming followed by soy farming are among the most GHG-intensive crops because of
their high CO2, CH4, and N2O emissions. Possible solutions include substituting these crops with high-
value crops and developing new rice variants, adopting water conservation practices for rice cultivation.

Similarly, integrated planning of urban development and agriculture and other land uses with water
conservation and decarbonization as twin goals can drive efforts to reduce land conversion in order
to protect wetlands and other carbon-storing lands like peatlands, arctic permafrost, salt marshes,
mangroves, and eelgrass beds.

While decarbonizing water and sanitation services, significant opportunities also exist to involve the
private sector and increase private financing in the water sector, a much-needed and missing piece of
the puzzle in the journey toward water security in many DMCs.

The Paris Agreement provides a renewed opportunity to elevate the importance of the water sector in
mitigating GHG emissions, as well as synergizing mitigation efforts with adaptation measures. Because

8
X. Du et al. 2022. Conservation management decreases surface runoff and soil erosion. International Soil and Water Conservation Research.
10 (2).
Executive Summary xiii

water resource systems often do not respect national boundaries, transboundary cooperation will be
essential to manage water resources based on their geography rather than in an uncoordinated, or even
conflicting, piecemeal fashion. Institutions, including ADB, can play an important role in promoting
regional approaches to water resources management and convening regional stakeholders, with a view
to utilizing these resources to maximize water security, economic development, and decarbonization
outcomes. The Paris Agreement’s Article 6 cooperation mechanisms for mitigation outcomes offer
opportunities to finance water sector mitigation measures through internationally transferred mitigation
outcomes, a new type of carbon credit.

Well-founded actions under six mutually reinforcing pillars are proposed, which can set the basis for
ADB to further enhance mitigation actions in the water sector through collective actions with partners
and DMCs. These pillars are complementary to those presented in the guidance note Mainstreaming
Water Resilience in Asia and the Pacific. The proposed approach is integrated and inclusive and focuses
on long-term climate mitigation outcomes through scaling up financing and building capacity, starting
with early engagement of DMCs. The approach provides guidance to the water sector in general, and
to ADB in particular, in developing a portfolio of integrated water or cross-sector projects and programs
with climate adaptation and mitigation outcomes.

The decarbonization pillars would encourage ADB to

(i) accelerate early engagement and build demand for water nexus investments leading to mitigation
outcomes;
(ii) adopt a water community approach to DMC decarbonization capacity;
(iii) strengthen ADB staff capacity;
(iv) foster knowledge, innovation, and partnerships, primarily through leveraging ADB's strategic
position as a center for thought and practice leadership on water resilience and climate mitigation
within Asia and the Pacific;
(v) mobilize finance for water sector decarbonization; and
(vi) spearhead digitalization for decarbonization in the water sector.

The guidance note is organized in four main parts, bookended by an introduction and a conclusion.
Chapter 2 reviews water sector decarbonization challenges in Asia and the Pacific and the central role
water plays in the region’s development. Chapter 3 examines water resilience and decarbonization
opportunities and measures. Chapter 4 looks at policies that countries in Asia and the Pacific can adopt
to support water resilience and decarbonization. Chapter 5 outlines actions for ADB under the six pillars
to further enhance mitigation actions in the water sector.
1 Decarbonizing the Water Sector in Asia and the Pacific

Beneficiaries of Tonle Sap Rural Water Supply and

Sanitation Project in Kampong Chhnang Province,
Cambodia. The project promotes the use of safe
water and hygiene, stops open defecation, constructs
improved latrines, and maintains the water sources
(photo by Eric Sales).

1 Introduction

Water has always been recognized as essential. adapt to climate change. The Paris Agreement’s
Yet, the water sector itself has been widely Article 6 cooperation mechanisms for mitigation
excluded as a significant source of greenhouse gas outcomes are intended to help financially support
(GHG) emissions. As a result, the water sector the implementation of NDCs. Yet, NDCs largely
has often been overlooked as an opportunity to ignore water as a factor in decarbonization
mitigate climate change. planning.1

The Paris Agreement provides a renewed Even though the Intergovernmental Panel on
opportunity to elevate the importance of the Climate Change (IPCC) has recognized the critical
water sector in mitigating GHG emissions, carbon sequestration services provided by wetland
as well as synergizing mitigation efforts with ecosystems toward achieving Paris Agreement
adaptation measures. The Paris Agreement goals,2 only 12 countries have adopted NDCs
supports countries in initiating their own sector- incorporating wetlands3 as a mitigation measure
wide mitigation approaches through nationally during the first iteration of NDCs made during
determined contributions (NDCs), the foundation 2015–2019.4In the current round of NDCs to be
of Paris Agreement efforts to decarbonize and concluded by 2025, while water-related activities

1
T. Rudebeck et al. 2022. Chapter 3: Governance context of water-related climate mitigation measures. Box 3.2. In M. L. Ingemarsson et al., eds.
The Essential Drop to Net-Zero: Unpacking Freshwater’s Role in Climate Change Mitigation. Stockholm: Stockholm International Water Institute.
2
IPCC. 2019. IPCC Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land Management, Food Security, and
Greenhouse gas fluxes in Terrestrial Ecosystems (Approved Draft). Geneva.
3
For the purpose of this guidance note, the term wetlands is used as a generic term for carbon-storing lands and includes peatlands, arctic
permafrost, salt marshes, mangroves, and eelgrass beds.
4
N. Anisha et al. 2020. Locking Carbon in Wetlands: Enhancing Climate Action by Including Wetlands in NDCs. Corvallis, Oregon and
Wageningen, Netherlands: Alliance for Global Water Adaptation and Wetlands International.
Introduction 2

feature more prominently, water remains primarily This guidance note is primarily designed
confined to adaptation measures, and few as a document for water professionals and
enhanced NDCs propose water-sector emission policymakers supporting or working in the
mitigation strategies (footnote 1). developing member countries (DMCs) of the
Asian Development Bank (ADB). The guidance
To help elevate the water sector as a priority note describes enablers and best practices that
for combined mitigation and adaptation efforts, have broad application for fostering climate
this guidance note evaluates the critical role resilience in the water sector. For a summary
that water plays in decarbonization, identifies of the findings provided in this guidance note
opportunities for synergies between mitigation we also refer to the Asian Development Outlook
and more resilient water resources, and proposes 2023 background paper on decarbonizing the
measures that can be taken to advance the pursuit water sector.5
of these opportunities.

5
A. Giardino, G. Wilson, and C. Hart. 2023. Decarbonizing the Water Sector. Background Paper for Asia in the Global Transition to Net Zero.
Asian Development Outlook Thematic Report 2023. Manila: ADB.
Fossil energy. Emissions from coal-fired power plants contribute to air pollution
and greenhouse gas release in Ulaanbaatar (photo by Ariel Javellana).

2 Water Mitigation and

Development Challenges
in Asia and the Pacific
2.1 Overview of Water Mitigation The 20-year global warming potential of emissions
is extremely relevant because it is what occurs
and Development Challenges over the next 20 years that, to a large extent, will
determine the future of the planet. The global
The Asia and Pacific region faces diverse and warming potential of N₂O is 273 times that of CO₂
complex water decarbonization challenges. In over both 20-year and 100-year periods.
the water sector, purchasing carbon-intensive
electricity used in an entity’s operations and The region’s efforts to reduce its GHG emissions
producing GHG emissions from operations— are crucial to the entire world’s efforts to fight
primarily carbon dioxide (CO₂), methane (CH₄), global climate change. The Asia and Pacific region
and nitrous oxide (N₂O)—are both important accounts for one-third of global gross domestic
aspects of the decarbonization challenge. CH₄ product and 42% of global GHG emissions from
is produced by water sector operations in high fossil energy consumption. The People’s Republic
volumes and is an extremely potent GHG over of China (PRC) and India are among the world’s
the short term, with a global warming potential of top three GHG-emitting countries, with the PRC
82.5 times that of CO₂ over a 20-year period, and alone accounting for more than 27% of global
29.8 times that of CO₂ over a 100-year period. emissions based on fossil fuel combustion.6

6
World Bank. Open Data (accessed 5 December 2022).