Financing needs in tackling the climate change-related challenges in Bangladesh is huge. The allocation for comprehensive disaster management decreased from 11.68 per cent in FY2015-16 to 6.91 per cent in FY2023-24. However, the implementation of the National Adaptation Plan (NAP) will require USD 230 billion during 2023 to 2050 time period. Besides, developing climate resilience capacity will require seven times the current spending amount at a rate of USD 8.5 billion per year, with USD 6.0 billion per year from external sources, according to the Ministry of Environment, Forest and Climate Change (MoEFCC).
During the dialogue organised by of the Centre for Policy Dialogue (CPD) titled ‘Review of Climate Budget and Recommendations for Climate Public Finance Management in Bangladesh,’ Dr Fahmida Khatun, Executive Director, CPD, emphasised the importance of the climate budget and highlighted the significance of Green Public Finance Management (PFM). The dialogue took place on Tuesday, 11 July, 2023, at the BRAC Centre Inn Auditorium in Dhaka.
In her keynote presentation, Dr Fahmida Khatun, stressed that a Green PFM plays a crucial role in improving the allocation of public expenditure towards climate and environmental goals, generating revenue through green fiscal measures, and ensuring transparency and accountability in climate-related spending.
‘Bangladesh has laid a foundation for Green PFM through policies and initiatives but requires a comprehensive design and implementation’, she underscored.
She pointed out that the allocation for the MoEFCC has increased to 0.033 per cent of Gross Domestic Product (GDP) in FY2023-24 from 0.031 per cent in the revised budget of FY2022-23. However, this increase falls significantly short of the targets set in the 8th Five Year Plan, which aims for an allocation of 0.10 per cent of GDP by 2025 and 0.5 per cent of GDP by 2041.
Referring to a World Bank study, she highlighted that Bangladesh will require a minimum of USD 12.5 billion, equivalent to around 3 per cent of its GDP, by the year 2025.
She emphasised the need for the reform of climate budgeting, urging that it be transformed into an all-inclusive strategy aligned with national priorities and integrated with the PFM reform agenda.
‘For better integration of climate budget tagging into the national budget process, and for better tracking of climate-related expenditures, capacity development of relevant human resources is also essential’, noted Dr Fahmida Khatun.
She suggested the ministry of finance should be in charge to drive reforms of the climate budget. Other ministries should be part of the reform process to establish their ownership in the process.
‘Broader stakeholders including the private sector, non-government, civil society, and community-based organisations should be engaged in the formulation and implementation of climate budget process’ said the Executive Director.
In his remarks as the Chief Guest, Mr Saber Hossain Chowdhury, MP, Chairman, Parliamentary Standing Committee on Ministry of Environment, Forest and Climate Change emphasised that it is crucial to gain a comprehensive understanding of the funding gap for Bangladesh in relation to climate finance and assess the adequacy of available resources. He opined that the magnitude of the global economy implies the presence of funds, but it appears to be insufficiently directed towards climate change initiatives.
Mr. Tanvir Shakil Joy, MP, a member of the Parliamentary Standing Committee on the MoEFCC, highlighted the lack of awareness regarding the climate budget. He emphasised the importance of involving grassroots communities in climate change adaptation but expressed concerns about their limited awareness. Capacity building is a crucial component, as individuals responsible for implementing projects aimed at mitigating climate risks need to possess adequate knowledge about climate dynamics. Simply providing funding is insufficient; having the necessary capacity to effectively execute these initiatives is equally vital.
While underscoring various issues related to climate change, Dr M Asaduzzaman, Former Research Director, Bangladesh Institute of Development Studies (BIDS), urged that there should be a legal and governance framework approved by the parliament which will monitor the allocation of climate fund. While the climate fiscal framework was developed in 2020, its practical implementation and impact on resource generation need to be assessed.
During the discussion, Ms Nayoka Martinez Bäckström, First Secretary, Environment & Climate Change, Development Cooperation Section, Embassy of Sweden, Bangladesh, highlighted that inclusive budgeting can contribute to multiple climate and environmental goals simultaneously, such as investing in climate adaptive infrastructure or waste management, which can have positive effects on reducing greenhouse gas emissions and sustaining public health. She also opined that that several budget measures can contribute to multiple climate and environmental goals simultaneously. For instance, investing in climate adaptive infrastructure can have clear effects on sustaining livelihoods, reducing displacement, and more. Similarly, decisions regarding increased investment in waste management, such as solid waste management, have direct implications on reducing emissions and promoting public health.
Commenting on 25 ministries and divisions that were considered while preparing the climate budget, Dr Haseeb Md Irfanullah, Visiting Research Fellow, Center for Sustainable Development (CSD), the University of Liberal Arts Bangladesh, opined that the Ministry of Youth and Sports should have been included in the climate budget. He highlighted that there are certain activities that overlap or should be grouped together but are segregated in the current structure. For instance, under the categories of food, social protection, and health, we discuss adaptation to drought, salinity, submergence, and heat. However, adaptation to cyclones is categorised under infrastructure. To ensure a more cohesive approach, it is essential to address these overlaps and align activities accordingly.
‘Despite the existence of the NAP, the Delta Plan, and other local development plans, none of them have been integrated into the climate fiscal framework,’ said Dr Maliha Muzammil, Climate Change Specialist, Resilience and Inclusive Growth (RIG) Cluster, United Nations Development Programme (UNDP). She also underscored that the finance division lacks a dedicated coordination mechanism or body to fulfill the role of coordination. It is crucial to address this capacity gap and identify the appropriate entity or individual who can effectively carry out the coordination mechanism.
Mr Partha Hefaz Shaikh, Director, Policy and Advocacy, WaterAid Bangladesh, highlighted that in regions characterised by substantial climate risks, such as coastal areas, hilly regions, and the frequently overlooked haor, the level of investment is alarmingly insufficient. He emphasised that it is essential for every ministry to comprehend their role and contribution to climate policies. This understanding necessitates addressing capacity development needs within each ministry. Moreover, it is crucial to establish mechanisms that allow civil society organisations (CSOs), international non-governmental organisations (INGOs), and non-governmental organisations (NGOs) to actively participate in this process.
In his closing remarks, the Chair of the session, Professor Mustafizur Rahman, Distinguished Fellow, CPD, mentioned that it is essential to address the challenges within Bangladesh’s policy and planning processes, as well as in coordination with our global and development partners, in order to effectively mitigate and adapt to climate risks.’
High-level policymakers, diplomats, foreign delegates, researchers, development practitioners, academicians, business leaders, civil society representatives, development partners, and journalists participated in the dialogue.