Funds aplenty for Bangladesh to become greener

DEVELOPING countries such as Bangladesh should not worry about financing projects aimed at climate change adaptation and making their industries green as funds are aplenty globally, said a top expert.  

“Money is not actually in short supply in the world if you have good projects,” Simon Maxwell, executive chair of London-based Climate and Development Knowledge and Network, told The Daily Star in a recent interview in Dhaka.

“In fact, people tell me about the shortages of bankable projects,” he said, adding that there are many banks, funds, programmes and initiatives that are providing money.

The intelligent recipients and customers of those funds have to look across the whole range of available finance and maximise the use.

“The Green Climate Fund has been set up to do new things. We will have to make sure that the fund is properly capitalised,” he said, adding that Bangladesh has been one of its beneficiaries. 

As of now, the fund has $10 billion and the development economist thinks it would certainly get more money.

Maxwell said not so long ago, Bangladesh, regularly hit by natural disasters, was mentioned as a basket case. “Now, Bangladesh has made fantastic progress.”

It has taken all the disaster preparedness measures, due to which it is much less vulnerable now. Still, the big risk is that climate change could be a “slap in the face” for Bangladesh.

Maxwell said Bangladesh should be lauded for its active role in the climate debates in Paris in December last year.

“It is exciting that people do take it seriously, and it is amazing to me that Bangladesh is so influential on the world stage.”

Bangladesh is at the fore-front of the countries, along with the Maldives and small island states, exposed highly to climate change-induced disasters -- and Bangladesh has put the issue on the agenda.

It is not just a sort of crying for help, but it is actually an intelligent political strategy that is being rolled out by Bangladesh, he said.

Bangladesh contributed immensely in putting the issue of vulnerability on the public stage alongside mitigation and helped to influence the spending priorities of the Green Climate Fund, he added.

“When you come to the negotiation you need to have a strong voice. Bangladesh does that for itself and leads other vulnerable countries.”

There are concerns that in the face of a sharp decline in oil prices, there will be a big shift towards diesel-run vehicles, disrupting the country's move toward renewable energies and technology. This is where the role of the government comes in, Maxwell said.

The cost of renewable energy is changing a lot, with the prices of solar having slumped 90 percent. In many cases, solar and onshore wind energies are actually competitive with other sources of energy.

“If you are in a remote area and not connected with the grid network, the grid connection will be very high. In such cases, solar and wind power can deliver the same power much, more cheaply.”

He said it would be incorrect to say that spending on renewable energy has collapsed. For instance, in 2014, it was $260 billion around the world, and in 2015 it was $350 billion. 

Renewables now account for more than 20 percent of the final energy consumption in the world.

“So, it is growing slowly. The new energy investment is tending toward renewables, because of concerns over oil prices and there are many countries that worry about their energy security,” Maxwell said.

If countries shift away from polluting cars, buses, industries, and power stations, they will make a big difference.

Maxwell said Bangladesh has huge potential in the area of renewable energies such as solar and tidal power, and hydroelectricity, possibly in collaboration with the country's neighbours.

He is aware of Bangladesh's success in solar energy and added that developing countries could also consider having a very big solar power plant to supply electricity to the grid.

“We should not assume that solar is an energy resource for people; solar can be a resource for everybody and can be fed into the grid on a very large scale,” he said, adding that investment has to be made for energy efficiency.

One of the big challenges for the future of climate change is actually big new cities that will appear around the world because of urbanisation, Maxwell said.

“You need to put houses and work closer together, better transport and green buildings. So, that is the new frontier.”

He said growth and climate actions are not incompatible because the new sources of growth are going to be in the green industries.

“There are many examples where green issues are going to give you competitive advantage.”

Despite having one of the lowest per capita emissions in the world, Bangladesh, like other countries, will have to get to zero carbon emission by 2070, he said.

So, Bangladesh will have to make sensible decisions now for the future.

In 1970, the United Nations set the annual aid target for rich countries at 0.7 percent of their gross national income. But only a handful of countries have hit the target so far.

Maxwell added: “The rich countries originally agreed that the climate finance will be new and in addition to the aid commitment. But I think it is now accepted most of the climate finances are not new and additional. It is certainly in some cases re-labelling.”

And the average for all donors is 0.4 percent of their gross national income, instead of 0.7 percent, he said. 

Maxwell, a former director of the Overseas Development Institute, the UK's leading independent think-tank on international development, however said there are some other pressures on aid programmes.

For example, one has to take into account that the big share of aid is now going toward paying for the refugees from Syria and North Africa in Europe. He said there are countries which are way below 0.7 percent, and people need to look a little bit in their mirror.

Donors that are honouring the aid commitment, such as the UK, are making very tough public expenditure decisions: they are giving money to countries such as Bangladesh, instead of spending the money for building new roads and hospitals in their own countries.

“So, that is also a big responsibility for developing countries to make sure that the money is well-spent.”

Bangladesh is a lower middle-income country and on its way to becoming a higher middle-income nation, according to Maxwell.

But donors are not turning their backs on Bangladesh, he said, while pointing out that the country receives well over $1-2 billion in official development assistance a year.

fazlur.rahman@thedailystar.net