Graduation to developing nation: Bangladesh’s challenges in climate financing
May 21st, 2018 at 2:32 pm
Governance and transparency are two other vital issues that need to be improved in the coming days
Graduation to developing nation: Bangladesh’s challenges in climate financing

By Nazrul Islam

Bangladesh, one of the most populous countries in the world, has recently qualified to be graduated to developing nation from the group of Least Developed Countries. With a population of more than 160 million, the South Asian nation attained all three criteria to become eligible for the graduation from the LDC group as its Gross National Income per capital rose to 1,274 dollars against the minimum requirement of 1,230 dollars.

According to United Nations statistics, the country scored 72.9 on Human Asset Index, higher than required 66, and 24.8 on Economic Vulnerability index, putting it below the requirement of less than 30. With constant economic growth of over 6 per cent in almost past two decades despite the fact that there were political turmoil and natural disasters, Bangladesh is more focused on sustainable development. In the process of its development, the country will face numerous challenges with rapid urbanization, industrial development and population growth (with 1.04 per cent annually). And, combating environmental degradation will be one of the major issues during the juncture of development paradigm shift as most of the people are unaware about their duties to the nature yet.

Bangladesh climate change impacts

River erosion —

After graduation in 2024, Bangladesh will have a grace period of another three years to enjoy all LDC-specific benefits. Therefore, there are approximately 10 years for the country to prepare to start the new journey and it needs to be prepared a smooth graduation by taking into account a many issues that include environment to achieve the UN’s Sustainable Development Goals by 2030. Bangladesh entered the LDC group four years after gaining independence from Pakistan in 1971 followed by years of political turbulence, including at least 15 years of military dictatorship. The country returned to parliamentary democracy in 1991.

Let us look into as to how Bangladesh, one of the members of 134 developing country group, will overcome the challenges in the coming years in combating climate change impacts and other issues related to environmental governance. The issues include loss of biodiversity and land degradation as well. Under the developing country group there are several sub-groups – 48-member Least Developed Country, 52-nation African Group, 42-member Small Island Developing Group and eight-member Latin American Group called AILAC.

Since Bangladesh’s formal graduation to the developing nations group will happen in 2024, the country, initially, is expected to face no problem in terms of its existing support from different international groups for financing climate change projects. Under the 2015 Paris Agreement, which gave special attention to the LDCs and the SIDS for adaptation related programmes, the support will be continued as priority. In this case, Bangladesh will continue to get the financial supports from Green Climate Fund and LDC fund.

The country will, however, not qualify for money from the LDC-specific funds under the Global Environment Facility, which is presently supporting with 24 million dollars to carry out projects for awareness and capacity building schemes. Some more funds will be available from the facility. Bangladesh will lose some pockets, from where funds are dedicated for the LDCs, only after 2024. There is no other negative impact predicted so far.

“Yet, we have another option to be remained wide-open after the 2024 as the 2015 Paris agreement clearly prioritised vulnerable countries for climate financing,” said Ziaul Haque, director of Department of Environment.

Given the geographic location, Bangladesh, a Himalayan delta, remains in the group of vulnerable countries.

“If we don’t get support as LDC, we will qualify for assistance as vulnerable country even after the graduation to developing nation,” Haque, who heads the project on National Capacity Development for Implementing Rio Conventions through Environmental Governance, said adding that the Paris agreement priority would help Bangladesh’s climate negotiation in the post-2024.

But, the country cannot afford to be complaisant with whatever the international agreements supports in terms of financing climate change. It needs to prepare for a better management and solutions to the challenges in the post-2024 scenario.

Look for alternative sources of funding

Bangladesh environmental funding

Green Climate Fund, one of the major funding source for climate financing

Instead of depending on commitments, Bangladesh needs to search for alternative sources of funding once it is graduated to the developing nation group. The Green Climate Fund (GCF) is one of them.

Founded in 2010 within the structure of United Nations Framework for Climate Change Convention (UNFCCC), the Fund is designed for assisting developing countries in adaptation and mitigation practices to combat climate change. The Fund is bases in Songdo district of Incheon, South Korea.

Capacity building for accessing funds

Bangladesh will need to enhance capacity to access to this Fund. “For that we will need to develop better projects and submit them to the Funds,” Haque said. It is very important to enhance the capacity of the officials at both public and private levels to develop better projects. Chances for funding in climate change would be slimmer if Bangladesh fails to develop better projects.

Enhancement of officials’ capacity to developed appropriate project is one of the priorities that Bangladesh will need in the changing scenario as the country will have to compete in a bigger group where all other developing nations may seek for the same funding. So, bettering the projects will ensure chances for getting the funds with no trouble.

Governance

Governance and transparency are two other vital issues that need to be improved in the coming days. The donors always want to see the money is being spent efficiently and properly. They want to see the process is transparent. That must be ensured. The country must fulfil the financial criteria set by the donors. And capacity building for financial management both at public and private sector is also prerequisite.

High-concessional credit facilities

Bangladesh has long been taking about only to receive the grants to climate change adaptation programme to combat the adverse effects as the country is less liable for global warming. But time has time to rethink the financing measures as grants in the global arena have been drying out fast.

Ziaul Haque has supplemented saying, “We had a policy that we as victim of the global warming caused by the developed nations will never receive loan or credit for those programmes.  But we have shifted from this policy”.

The situation has changed. Bangladesh needs to take bigger projects for adaptation.

“In this case, we have decided in principle to take concessional loans alongside the grants from the Green Climate Fund. The GCF encouraged us to take loan as the global grants have been shrinking,” he said. The donors call for a portion of grants while the lions share to be as high concessional loan, which will be repaid in a timeframe of 40 to 50 years.

Bangladesh now needs bigger projects to undertake. The smaller project has little impacts nowadays. Mid and long-term projects help improve the situation.

Bangladesh climate change

Nazrul Islam is a Bangladeshi  journalist, he can be reached by e-mail ; nimithu@gmail.com