The Greater Mekong Subregion (GMS) comprises Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, Thailand, Viet Nam, and the Yunnan and Guangxi Provinces of the People’s Republic of China. Connected by the Mekong River, the subregion covers 2.6 million square kilometers and has a combined population of about 332 million. The GMS has been one of the fastest growing regions in the world, with gross domestic product (GDP) growth averaging over 9.5% annually between 2000 and 2009.

Much of this growth has been driven by intensive use of natural capital, and fueled by cross-border trade and investments. Guided by a vision of greater “connectivity, competitiveness and community”, the GMS Economic Cooperation Program (ECP) of the Asian Development Bank (ADB) has played a key role in promoting such investments in transport, energy and telecommunications. Economic growth in the subregion was also accompanied by significant progress on human development, poverty reduction and health.

Growing prosperity has however come at high environmental costs. Forests are an example of a natural asset under pressure. New roads and other infrastructures improved physical connectivity throughout the subregion, providing access to previously inaccessible landscapes. These investments also opened up new areas for settlement and economic use, and promoted the growth of regional towns. At the same time, they have also led to large-scale land use changes and contributed to forest cover loss and fragmentation of ecosystems. Across the GMS, about 8 million hectares of forests—an area equivalent to almost one third the size of Lao PDR—were lost between 1990 and 2010. This has serious consequences on biodiversity and the provision of ecosystem services.

Climate change adds considerable risks to the people, natural capital and economies of the GMS. More frequent extreme weather events and shifting rainfall patterns are among the major threats. Rural people—comprising nearly 67% of the GMS population—are particularly vulnerable due to their dependence on climate-sensitive agriculture and forest resources. Major GMS investments in energy and transport, particularly in the Mekong Delta and along other coastal areas, are vulnerable to sea-level rise and storm surges.

Climate change also adds challenges to maintaining natural capital in key biodiversity landscapes in the GMS. With more extreme weather events, watersheds—particularly those already degraded—become more vulnerable to increased runoff, erosion and landslides. Biodiversity could further decline as climate change contributes to species extinction, changes in compositions and geographical distributions of species, and changes in the functioning of ecosystems. Climate change could also worsen human impacts on landscapes and biodiversity. For example, rural communities may cope with income loss from climate shocks by overharvesting forest products or clearing more forests for crops. This situation is already evident in several biodiversity conservation corridors in Lao PDR, Cambodia and Viet Nam.

The GMS countries responded to a growing concern about the environmental impacts of rapid economic development by launching the GMS Core Environment Program (CEP) in 2005. The Program is administered by the ADB within the framework of the GMS Economic Cooperation Program and overseen by the environment ministries of the six countries that form the GMS Working Group on Environment. The CEP’s initial focus (2006-2012) was on improving environmental planning, and promoting an integrated approach to conservation and development in high-value, high-pressure biodiversity landscapes. CEP pilot projects during this phase have placed nearly 1.3 million hectares under a sustainable management regime, improving land tenure security by establishing community protected areas and livelihood plantations. As a direct result of these community management efforts, 3,722 hectares of land have been reforested. Rural communities have also been supported in reducing their dependence on forest resources through livelihood diversification.

Strengthening climate resilience has been added as a core pillar of the CEP during the current phase (2012-2016). This is due to the recognition that to safeguard the subregion’s natural capital and development gains, GMS countries need to understand the emerging climate risks and invest in adaptation actions for both human and natural systems. Particularly in the focal landscapes of CEP, climate change is likely to compound the impacts of rapid economic development and intensive resource use, thus amplifying pressures and threats on the ecosystems and species in these landscapes. On the other hand, natural capital, when managed sustainably, can provide a means both to mitigate climate change (e.g. reduction of greenhouse gas (GHG) emissions through sustainable forestry and participatory forest carbon monitoring) and help people better adapt to a changing climate (e.g. healthy forests, watersheds and mangroves acting as the subregion’s “ecological infrastructure”, which can complement, and in some cases replace, physical infrastructure in reducing the impacts of climate shocks). Therefore, the focus of CEP climate work is to support GMS countries to integrate climate considerations in development planning and sustainable management of natural capital in order to achieve development, conservation and climate co-benefits. Examples of key activities include:

• Developing a participatory framework for climate vulnerability assessment and identification of adaptation responses in GMS rural communities, and building capacity of GMS practitioners to apply the framework;

• Investigating the role of financial strategies and instruments, such as savings, micro-insurance and contingency funds, as part of an adaptation strategy for rural communities, focusing on delivery mechanisms such as Community Development Funds;

• Establishing an online regional knowledge base, which hosts climate projection data along with analytical tools, the assessment guideline and training materials, to support climate change adaptation planning in the GMS;

• Developing climate profiles for the seven transboundary landscapes, and supporting development of climate integrated conservation strategies for these landscapes;

• Coordinating the GMS Climate Change Roundtable, an ADB-led dialogue and joint-action forum among development and research institutions working on sustainable livelihoods and climate change in the GMS.

• Implementing demonstrative pilot projects, including those on ecosystem-based adaptation (EbA) and REDD+ readiness, and identify opportunities for upscaling at both the landscape and community levels.

These activities build on the successful CEP pilot experience, and leverage synergy with other regional initiatives such as the GMS Forest and Biodiversity Program supported by the Global Environment Facility (GEF), the Mekong Adaptation and Resilience to Climate Change Project (Mekong ARCC) of the US Agency for International Development (USAID), and the World Bank-WWF collaboration to develop a framework to operationalize EbA in the GMS.

Beyond its programme activities, CEP is also seeking to raise the profile of climate change issues in the strategic agenda of GMS regional cooperation. The upcoming Fourth GMS Environment Ministers’ Meeting (EMM4) on 27-29 January 2015 in Nay Pyi Taw, Myanmar, provides a momentous opportunity for this effort. The theme of EMM4 is ‘Increasing Investments in Natural Capital in the GMS.’ Specifically, EMM4 will aim to garner high-level commitment that the GMS must scale up efforts to protect and enhance its natural capital to ensure that current and future development of the subregion is inclusive and sustainable. Among expected outcomes of EMM4 are a tangible action plan and enabling partnerships to scale up investments in natural capital, including those that will deliver substantial climate change adaptation and mitigation benefits.