Human actions involving development projects that burn fossil fuels are admittedly a major driver of climate change. But despite the fact that historically most developing countries including Bangladesh are latecomers so far as their contribution to global warming is concerned, they are still the worst victims of climate change. In this context, the Global Climate Risk Index 2021 ranked Bangladesh as the seventh extreme disaster risk-prone country in the world. Against this backdrop, amid a host of measures it has been adopting to combat the destructive impacts of climate change, fresh challenges are coming from the development financiers, who, in line with the Paris agreement (of December, 2015's UN climate change conference held in Paris), are reportedly, setting conditions regarding financing the country's development projects. Notably, a document incorporating the guidelines titled 'Direct Investment Lending Operation' was signed last October by multilateral development funders including the Asian Development Bank (ADB), the World Bank Group (WBG) and the European Investment Bank (EIB), holds that they may or may not invest depending on their meeting the conditions of low-carbon emission.
Obviously, to meet such lending conditions, Bangladesh will have to be rather selective about choosing projects. To add to these concerns, some experts have warned that after July this year, no development financing would be forthcoming for projects that are based on coal and other fossil fuels. Since Bangladesh has in most cases to depend on funding from its foreign development partners to finance its development projects, the government will have to be very convincing in its dealing with the foreign financiers so that many of its ongoing projects, especially the infrastructure-related ones, that are energy-intensive, are not unduly affected by their pro-green financing bias. It is more so for the projects to be undertaken in the future.
At the same time, it is urgent that necessary steps are taken to increase the expertise of people involved with preparation of development projects for making those climate-compliant. No doubt, that would require introduction of carbon-capture and carbon-storage technologies that are expensive. This would call for extra attention from the policymakers so that selection of the energy-efficient technologies that emit less carbon but at the same time are within the affordable limit of a developing economy like Bangladesh are made. Here is where comes the issue of negotiation skill on the part of those behind project designs. Knowledge of carbon-reduction technologies would be crucial in this case. Otherwise, there is the risk of choosing options that are unnecessarily expensive and burdensome for projects to be undertaken.
But apart from the requirement of designing development projects to suit the green bias of development financiers, Bangladesh as a highly climate vulnerable nation has its own exigencies for transition to a greener, renewable energy-based economy. It does already have its green growth targets as envisaged in the 8th Five Year Plan and the Bangladesh Perspective Plan 2041. At this point it may be recalled that to sustain its economic growth and move further ahead towards a greener future, the World Bank (WB), recently, produced a draft strategy paper taking into account the requirements of the major sectors of the economy including energy, manufacturing, transport and agriculture. In the next two decades, as part of the climate action financing for Bangladesh, the massive initiatives to that end would require over US$200 billion. Since a major development partner, WB, is on Bangladesh's side in its march to a green development path, the government can well turn it to its advantage while securing funds for its development projects from different project financiers.
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