Anomalous public fund allocation for mitigating climate change impact

Bangladesh is one of the worst victims of climate change in the globe. As a deltaic country, it has a lot of cross-border rivers, which work as catalysts to lessen the impact of climate change and natural disasters. However, the water flows of the rivers have been restricted or obstructed by some man-made interventions over the decades. Those obstructions have already made the country's northern and northwestern regions draught-prone and dry. The northwestern drought-prone and Barind districts have emerged as one of the most climate vulnerable regions in Bangladesh. The population in this area is primarily composed of marginalised and plain-land indigenous communities. Drought, groundwater depletion, unpredictable rainfall, extreme heat-wave, less rainfall, persistent dense fog, severe cold spells, non-seasonal rainfall, heavy rain, water logging, hailstorms, nor'westers, floods etc are the most common climate change-induced disasters in the northwestern region.

However, the region has been getting less attention both from scientific research as well as from the development work front. Substantial financial allocation is needed to overcome the impacts of climate change. Different national resilient plans are available here in Bangladesh, but the fund allocation was not raised adequately in the region. The Centre for Participatory Research and Development (CPRD) and HEKS/EPER have recently conducted a study on climate change impacts and resource allocation gaps in the drought-prone Barind districts. This write-up attempts to illustrate the financial gap analysis from the study.

FUND REQUIREMENTS UNDER DIFFERENT NATIONAL RESILIENT PLANS FOR DISASTERS-PRONE BARIND REGION: Delta Plan 2100: The Bangladesh Delta Plan 2100 (BDP 2100) is a strategic and comprehensive development plan formulated by the government aimed at addressing challenges posed by the country's deltaic geographical configuration and susceptibility to natural disasters as well as long-term challenges for development outcomes by climate change.

The total capital expenditure on projects in the investment plan is estimated to be nearly Tk 4075.92 billion (US$37 billion) up to the year 2040. If it adds the cost of the feasibility study, operating and maintenances, the total expenditure on the plan is expected to reach Tk 5728.32 billion (US$52 billion). Annual expenditure on the Delta Plan will be Tk 220.32 billion (US$2.0 billion) on an average over the first 10 years. Among the total Tk 4075.92 billion (USD 37 billion) project cost, 5.0 per cent investment is estimated for the drought-prone and Barind areas (DBA); 30 per cent for the Coastal zone; 23 per cent each for Urban Areas and for Cross Cutting issues; 16 per cent for Rivers and estuaries; 2.0 per cent for Chittagong Hill Tract; and 1.0 per cent for Haor and Wetlands. If the 5.0 per cent of the 'Delta Plan 2100' allocation is considered for the DBA, the required amount will stand at Tk 286.416 billion.

NATIONAL ADAPTATION PLAN (NAP): The NAP 2023-2050 aligned the north-west drought-prone Barind districts (DBA) with 3 climate stress areas, namely - (1) Drought Prone and Barind areas (Naogaon, Chapai Nawabganj, Rajshahi, Bogra, Joypurhat, Rangpur, Dinajpur, Meherpur, Chuadanga, Kushtia, Jeshore, Magura, Jhenaidah), (2) Northern, northwestern region (Panchagarh, Thakurgaon, Nilphamari, Lalmonirhat, Rangpur, Kurigram, Dinajpur), and (3) Chalanbeel and low-lying area of the northwestern region (Pabna, Natore, Sirajganj, Rajshahi, Naogaon). The NAP is formulated to enhance the country's resilience to the impacts of climate change. The interventions are mainly based on the identified key sectors and distributed across climate stress areas, and some of the initiatives are inclusive of several climate stress areas.

The total investment of NAP is estimated at Tk 25,336.8 billion (equivalent to US$230 billion) for entire Bangladesh and the amount is distributed in 113 projects based on developed adaptation pathways and sectoral adaptation requirements. After an analysis of the 113 schemes in various sectors, it is found that 17, 20, and 17 projects are earmarked for the DBA, NNW, and CBL areas respectively. As the interventions are taken for the multiple climate stress areas, the study has segregated investment amounts equally, mentioned in each of the climate stress areas, and calculated the approximate amount earmarked for the DBA. For example, in the intervention titled "Extension of climate-smart technologies for increasing irrigation water use efficiency" under the code CSA1, the authority spans 10 distinct climate stress areas and allocated an amount of Tk313 billion. The fund has been divided equally for each of the 10 climate stress areas.

By scrutinising the NAP, the aggregate investment for the DBA stands at Tk 1.189.563 billion. The investment on Barind is only 4.695 per cent of the total amount of the NAP. On the other hand, some interventions were undertaken nationwide, and some were only for urban areas (URB). If we include the 4.695 per cent funds in the above-mentioned amount allocated nationwide and to the allocation for URB, the total estimated investment for the DBA will stand at Tk 1,644.358 billion. It is only 6.49 per cent of the total investment of NAP.

MUJIB CLIMATE PROSPERITY PLAN (MCPP): The MCPP 2022-2041 is a comprehensive strategy for addressing the increasing impacts of climate change and building resilience in various sectors of the country's economy. The plan sets 6 key priority areas for implementing activities, including i) Accelerated Adaptation, ii) Just Transition of Labour and Future-Proofing Industry with Technology Transfer, iii) Increasing Public Revenue to Spend on the Most Vulnerable, iv) Comprehensive Climate and Disaster Risk Financing and Management, v) Leveraging 21st Century Technologies for Wellbeing, and vi) Maximized Renewable Energy, Energy Efficiency and Power & Transportation Sector Resilience. Though the MCPP has not mentioned any geographical area-based action plans, the investment in resilient pathways, including energy, water, transport, supply chains, value chains, and so on, will entail costs of at least US$ 89.72 billion by 2030.

CURRENT RESOURCE ALLOCATION TREND TO THE CLIMATE-STRESSED BARIND REGION: Bangladesh Climate Change Trust Fund (BCCTF) is one of the crucial financial instruments that provide resources for climate-related projects and activities in Bangladesh. The BCCTF was established in 2010 within a legal mandate by the 'Climate Change Trust Act' passed in the national parliament in 2010. BCCTF adheres to the six key thematic areas outlined in the Bangladesh Climate Change Strategy and Action Plan (BCCSAP). Among 790 projects, the BCCTF distributed a total of 67 projects (or 8.5 per cent of the total projects) to the DBA. The estimated cost of the Barind region's projects is Tk1.463 billion.

Interestingly, it is equivalent to just 4.077 per cent of the total allocation in the BCCTF. However, the largest amount of trust fund is earmarked for infrastructure development projects. The frequency of this type of project is 431, which is 54.6 per cent of the total allocations.

Every year, Bangladesh prepares a climate budget report following the recommendation of the Climate Fiscal Framework (CFF), which is prepared by the Ministry of Finance (MoF). Accordingly, the first climate budget was announced in 2017. The climate budget investment comes from the country's national budget and is allocated for adaptation and mitigation and also for ensuring its sustainable development. The latest study has identified a total of 264 climate-relevant ongoing projects under the Annual Development Programme (ADP) under the national budget. A total of 25 climate-relevant ministries/divisions are directly or indirectly involved with their implementations. Out of the 264 projects, the DBA region has got only 18 projects costing Tk 60.92 billion.

RESOURCES ALLOCATION AND GAP ANALYSIS: The Bangladesh Delta Plan 2100 has allocated a meagre 5.0 per cent of the overall investment for the DBA districts. The required amount is Tk 286.416 billion up to the year 2040. To break it down further, the annual required fund allocation for these initiatives stands at Tk 16.848 billion. On the other hand, the NAP (2023-2050) has allocated funds worth Tk 1644.358 billion for the drought-prone Barind districts, which are aligned with three climate stress areas: DBA, NNW, and CBL. When assessed on an annual basis, this allocation stands at Tk 44.442 billion.

In addition, the 'Mujib Climate Prosperity Plan' fails to address specific actions based on geographical regions. However, it has estimated a fund of Tk 9883.55 billion for implementing the MCPP up to the year 2030. Since the estimated MCPP fund is not segregated for any geographical areas, we are considering at least 6.49 per cent of the total like the NAP's 6.49 per cent allocation for drought-prone and Barind districts. It that case, it will require a total Tk 641.44 billion for the DBA region to implement the MCPP up to the year 2030. Then the annual required fund allocation will stand at Tk 37.73 billion.

From the inception of the government trust fund in 2010, the DBA districts has so far received a total of Tk 2.766 billion funds, with the amalgamation of the allocation of three climate stress areas --DBA, NNW, and CBL. It means, these three climate-stressed areas have received Tk 0.2128 billion funds on an average annually. Meanwhile, the DBA districts, which are segregated into three climatic stress areas, DBA, NNW, and CBL, has received Tk 60.92 billion fund allocations during the FY2023-24 under the Annual Development Programme (ADP) of the national budget. This allocation is also known as the 'climate budget.' The cumulative fund disbursement from the BCCTF and climate budget (FY2023-24) is Tk 61.132 billion. It means there is an investment gap of Tk 37.88 billion.

If we analyse the fund allocations under the key national plans including the MCPP, the Delta Plan -2100, and the NAP, alongside two other government financial instruments-- 'Climate Budget' and BCCTF, we will find a huge financial gap on the way of making drought-prone and Barind (DBA) region climate resilient. To implement the three national plans, a huge disparity and lack of synchronisation in fund allocation were identified. It also creates a big question regarding the regional disparity in terms of public fund management. Proper public fund management for tackling and combating the climate change impacts is imperative at this moment. The government needs immediate action to boost the fund allocation in the country's climate-stressed and impoverished northern and Barind region.

Md Shamsuddoha, Chief Executive; Al Imran, Senior Officer (Research and Campaign); Naznin Sultana, Senior Officer (Research and Advocacy), CPRD; FHM Humayan Kabir- Senior Journalist; ([email protected]); and Shekhar Chakraborty, Sr. Partnership Coordinator & Programme Advisor (Climate Change), HEKS/EPER