Capacity building crucial for access to climate finance

Bangladesh needs to develop expertise in promoting carbon trading projects, which can generate a huge amount of funds for the country, experts said.
They also suggested gearing up efforts to include private sector and NGOs to improve more access to climate finance for Bangladesh.
Capacity building in climate finance is more crucial in the aftermath of the COP29, which provides almost nothing for climate vulnerable countries like Bangladesh.
Talking to the FE, Environment, Forest and Climate Change Affairs Adviser Syeda Rizwana Hasan said that the outcome of the COP29 was frustrating for countries like Bangladesh who are the worst victims of the effect of climate change.
Against the demand for $1.3 trillion compensation fund these countries got only $300 billion which is meagre compared to the requirement to offset the effect of the climate change, she noted.
Usually, there is a tendency that such fund was included in the foreign aid, but this time the demand was made not to tag this climate money with the general foreign assistance, said Ms Rizwana, also a leading green activist of the region.
Another reason for frustration is that at COP29, the developed countries did not make any commitment to limiting the emission though a limit was fixed earlier, she explained.
About developing expertise in carbon trading, senior officials of the environment ministry told the FE that the World Bank is financing a project in this regard.
"It will end by 2026, and we hope that we can promote carbon trading projects smoothly after that," they said.
As the outcome of the COP29 is frustrating, tapping resources through carbon trading becomes more important, said Concern Worldwide Country Director Mr Manish Kumar Agrawal.
"Climate finance access is very important. Whatever money is available -- let's say this $300 billion -- accessing this fund has been very challenging, and there are a lot of capacity issues, because, you know, that it comes with lot of complexities and a lot of conditions.
"Bangladesh has to really increase its capacity to access those climate finance, like green climate funds. Then there are a lot of multilateral banks which provide those climate finance. So given that Bangladesh has to increase its capacity around accessing climate finance and then utilising it in a transparent manner.
"The carbon finance-related things have been finalised under Article 6 at COP29. This means that there will be a lot more growth in carbon trading, and it is much more regularised. And that's where I think Bangladesh has not really anchored, you know, the carbon credit market.
"So I think that's where, again, Bangladesh can prepare itself to build its capacity on developing projects around carbon trading. And then you know how to encash and mobilise the climate financing form of carbon trade."
According to officials, Bangladesh has so far achieved 19 tons of carbon credit through 12 Clean Development Mechanisms (CDM) projects in the country's gas fields.
Korean and Japanese companies are involved in such projects which are similar to carbon trading projects, they said. According to World Bank officials, Bangladesh has the potential to fetch around US$1.0 billion annually from global carbon market.
The IDCOL implemented projects worth US$1.60 billion.
"We got approval to implement projects worth $2.6 billion, but yet to implement projects worth US$1.0 billion due to the shift in policy to Article 6 of Clean Development Mechanism (CDM)."
Market price of per tonnes of carbon might increase by 50 per cent to US$30 from $20. Bangladesh has a potentiality to trade 40 million tonnes of carbon now.
Carbon trade is the buying and selling of credits that permit a company or other entities to emit a certain amount of carbon dioxide or other greenhouse gases. The carbon credits and the carbon trade are authorised by the governments with the goal of gradually reducing overall carbon emissions and mitigating their contribution to climate change.
Narrating his experience in Baku, Manish Kumar Agrawal said Bangladesh definitely went there with lot of expectations centring climate finance, and the loss and damage fund.
"But unfortunately, loss and damage was completely taken out of this Baku deal. Which means the losses and damages of most climate vulnerable countries like Bangladesh was ignored. And you can see, only this year this country faced five back-to-back disasters and all those were climate induced disaster like cyclone and flooding. And there was a loss of around $1.2 billion.
"And this is not the first time. Every year, certain percentage of GDP is lost because of natural disasters. So funds for loss and damage, adaptation and mitigation should be there, but in reality nothing was committed for these sectors."
Terming the $300 billion 'almost nothing', he said, developing countries actually need $400 million only for adaptation every year, $400 million for loss and damage, and then roughly half a trillion dollar for the mitigation.
"If you look at the Bangladesh context, with a population of 170 million, this is like a drop in the ocean.
"And even who will pay this $300 billion is not clear either. Normally the demand from the developing countries has been that those who have created this problem should pay in proportion. But now, who will pay this was not decided or agreed. Actually, there is no accountability."
Asked how Bangladesh can fill this huge gap of resources, Mr Manish said, "When you look at the context of Bangladesh, the scope for private sector investment has been very limited. Plus private sector always looks for profit. And country like Bangladesh, which prioritizes loss and damage and adaptation, you can't really generate a lot of profit out of it. So the new collective quantified goal (NCQG) was one of the main focuses because, you know, the first target was set in Paris in 2015 of 100 million dollar.
"That was not achieved either by 2020, but was reached in 2022. Even then, most of the money is coming in the form of loan. So there is another debt kind of crisis, and countries like Bangladesh, again, who are already having a lot of debt, you know, getting climate finance also in the name of loan, which means you are further increasing the debt.

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