Climate Change Vulnerability and Poverty Nexus: Climate Finance in

Bangladesh M. Zakir Hossain Khan

Transparency International Bangladesh

Email: zhkhan@ti-bangladesh.org

Economic and Poverty Status of Bangladesh

Economic growth is estimated on average of 6.5% since 2010

Over 70% out of 52 Millennium Development Goal (MDG) targets already met or on track towards 2015

Poverty rate reduced from 60% in 1990 to 31.5% in 2010

Poverty incidence, based on national poverty line ($1.13 per capita per day), is projected to decline from 31.5 percent in 2010 to 24.47 percent by 2014

The UN Human Development Report 2014 claims Bangladesh has been graduated from Low Human Development (LHD) category to Medium Human Development (MHD) category in 2013

Climate change vulnerability and Bangladesh

• Loucks et al. (2010) predict a 96% decline in tiger habitat in Bangladesh’s Sunderbans mangroves with a 28 cm sea-level rise if sedimentation does not increase surface elevations. Rising winter temperatures are expected to result in poleward expansion of mangrove ecosystems (Section 5.4.2.3)

• Wassmann et al. (2009a, 2009b) current temperatures of Bangladesh are already approaching critical levels during the susceptible stages of the rice plant (March-June)

• Sea-level rise threatens coastal and deltaic rice production areas in Asia, such as those in Bangladesh and the Mekong River Delta (Wassmann et al., 2009b)

• In a low crop productivity scenario, countries such as Bangladesh would experience a net increase in poverty of 15% by 2030 (Hertel et al., 2010)

Source: IPCC 5th Assessment Report (AR) WGII, Chapter 24: Asia including Bangladesh)

Poverty Impacts in the Climate Change Vulernbale Zones of Bangladesh

Potential Risk of Sea-level Rise in Bangladesh

Bangladesh may loose around 29,846 Square Km that includes several small islands such as Hatia, Moheshkhali, Saint Martin,

Bhola and other Sothern coastal areas (IPCC, 3rd Assessment Report)

Poverty and Climate Change Nexus

Poverty rate is the highest level in The coastal zone of

Bangladesh which is vulnerable to sea level rise

Northern part of the

country that is also identified as drought-prone areas

Climate Finance in Bangladesh

Source: CPIER, 2012

Flow Chart 1: Present Structures and Processes of Fund Flow for Climate Finance

Source of

Fund

Coordination

Implementation

MRV

Key

Actors

CC

U,

CP

TU

(IM

ED

)

Monitoring

& Evaluation

C&

AG

, W

B,

3rd

Part

y

Financial

Audit

Pa

rlia

men

tary

Sta

nd

ing

Co

mm

itte

e o

n

Min

istr

y o

f E

nv

iro

nm

ent

an

d F

ore

st

Oversight

Oversight

MoEF

ERD of Ministry of Finance

(Responsible to deal any foreign funds to

Bangladesh Government)

PKSF

Government

Organization

NGO’s &

CSO’s

Bangladesh

Govt.

BCCTF (Trustee Board,

Technical Committee,

Theme Committee)

Proposed BCCRF

Secretariat

CCU

BCCRF

(Governing Council,

Management

Committee)

DPs

MDBs

World Bank

BCCRF Unit

PPCR Unit

Adaptation

Capacity Building

Mitigation

Research ERD

Project Purpose Flow of Fund High

Medium

Low

Fund Transfer

Actors’ Role Funding/Project Approval

Coordination & influence Enforcement, Monitoring

& Evaluation

Project Implementation

Other Relations Accountability

Trustee

Coordination

Monitoring & Evaluation

Proposed Relation

(Coordination)

Climate Finance in Bangladesh

402.6

188.2 262.5

146.1 100.3

284.2

13.7 14.5 65.5

886.8

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

1000.0

BCCTF BCCRF PPCR Japan FSF GEF LDCF Other Total

In M

illio

n U

S$

Pledged Approved

Climate dimension expenditures actually represent 22% of total government budget and 6.51% of GDP – Climate Fiscal Framework, 2014

Climate Finance in Bangladesh

0.03

0.1

0.1

0.1

0.2

0.3

0.4

0.5

1.8

3.0

4.5

4.6

9.4

10.0

16.9

17.5

30.7

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0

Ministry of Fisheries and Livestock

Education

Chittagong Hill Tracts Affairs

Women and Children Affairs

Health and Family Affairs

Science and ICT

Defence

Communication

NGO Funding (BCCTF + BCCRF)

Shipping

Agriculture

Disaster Management and Relief

Others (British and German Govt + World …

Environment & Forest

Water Resources

Power Energy and Mineral Resources

LGRD & Cooperatives

Less CF allocation for most cyclone and drought prone areas at which extreme poverty rate is also the highest

Less CF allocation for most cyclone and drought prone areas at which extreme poverty rate is also the higher

CF Mechanism to address Vulnerability to CC and Poverty

Lessons learned Way Forward

Gaps in addressing climate change into development planning especially disaster risk reduction especially targeting the poor Households- led to mal-adaptation

Integrated development planning as well as financing with proper consideration of CC vulnerability

Proper assessment of the CC vulnerability and targeting as well

Strict consideration of bottom-up approach in developing adaptation plans and programs

Approved projects from both BCCTF and BCCRF partially addressed CC vulnerability but missed to address poverty stricken climate venerable areas

In approval of the projects (either from BCCTF or any development project) consideration/focus on numbers (both amounts of funds and projects in total) for individual/political influence rather than vulnerability

The highest level of pro-active disclosures of decision-making process as well as adaptive actions at the ground

Regular dissemination of climate change and poverty vulnerability data across regions and income groups

Challenges: Mal-Adaptation and Planning Risks of Top-bottom Approach Limited proactive disclosures of Information (e.g. Project proposals, project completion reports, Construction Design/Plan Collection; Evaluation Report etc.

US $1400 @ per structures; total 2003 Faulty Design of cyclone

resilient housing

Political consideration

in targeting and

contracting

Not have prior consultation with targeted

Household

Lack of proper monitoring

and evaluation

Faulty fund disburse may

push the vulnerable

people in the most

vulnerable

CF Mechanism to address Vulnerability to CC and Poverty

Lessons learned Way Forward

Linkages in preparation of the National Adaptation Plan and Five Year Plan/Annual Development Plan is not visible

Coordination between MoEF and MoP should be established

Even though transparency in financing (like using climate marker under the Climate Fiscal Framework - CFF) is improved but clear gaps in ensure proper accountability at implementation especially unusual delay in implementation of the adaptation projects

Have to establish a coordinated body like Climate Change/Finance Commission for effective disclosures, knowledge management, proper adaptation planning, create scope for citizens watchdog role;

Create mechanisms for effective engagements of the vulnerable citizens into adaptation project planning, approval and implementation

How the MoF or Audit Department would capture gaps in planning or mal-adaptation or knowledge level linkages on climate change vulnerability and assess the projects in terms of that is not clear in the proposed CFF

How expected level of integrity, accountability, competency and capacity of NIEs would be ensured by Climate Change Cell of the MoF to access funds from the Green Climate Fund is not clear

M. Zakir Hossain Khan

Transparency International Bangladesh

zhkhan@ti-bangladesh.org

Climate finance is not just money it tells lives and livelihoods