Climate Financing in National Budget: Where Do We Stand?

Bangladesh, one of the most at-risk countries to adverse impacts of climate change is also one of the
most resilient countries to disasters. Working together, its citizens, government, civil society,
scientists, national and international NGOs, and business communities made significant progress over
the years despite increasing disasters with greater intensity; therefore, economic growth of the
country has been steady. However, the growth rate may be slowed down and all our development
gains may fail due to climate change. Last year massive flooding in the ‘Haor’ area badly affected the
rural economy, infrastructure and agriculture including crop and freshwater fisheries. This year, once
again, inadequate preparation in terms of having an early monsoon and heavy downpour may once
again hamper agricultural production equivalent to estimated 0.5 to 1 percent of GDP1.

The Government of Bangladesh, and noted in the Climate Protection and Development: Budget
The report, 2017-18, is committed to addressing the climate change-induced risks and vulnerabilities given
their significant bearing on our development agenda. As part of its commitment, the Government
adopted Bangladesh Climate Change Strategy and Action Plan (BCCSAP) reflecting its priority agenda.
It also established Bangladesh Climate Change Trust (BCCT) and placed at its disposal a fund called
Bangladesh Climate Change Trust Fund (BCCTF) from its own sources to finance projects for
implementation of BCCSAP.

It also conducted Climate Public Expenditure and Institutional Review
(CPEIR) in 2012 which provided very useful recommendations having analysed the policy and
institutional context together with the financial management arrangements of the agencies involved
in climate activity in Bangladesh. In 2014 Bangladesh adopted its Climate Fiscal Framework (CFF) as a
forerunner in this region and beyond in introducing a climate-sensitive public financial management
(PFM) system. The CFF prompted a set of specific interventions to make our budgeting exercise
climate inclusive.

We, ActionAid Bangladesh and International Center for Climate Change and Development, welcomed
the venture of the Government of Bangladesh for publishing its first report on a climate-sensitive budget
analysis where it outlined the trend of climate relevance in 6 selected ministries showing a 4.4%
increase in development budget in 2017-18 FY compare to 2014-15 FY. Overall, in 2017-18 FY, climate-relevant
the allocation was 19.20% of total budget over 76 thousand crore taka (about 14.5 thousand crore
taka). We recognise the significance of the allocation and a sign of taking preparedness to fight climate
change.

However, there are number of issues that requires attention such as
– lack of clarity on double counting of allocation within the projects and ministries.
– the figure provided by the “climate dimension” of expenditure which measures the extent of
climate mainstreaming in government spending i.e. to what extent are government-funded
projects integrate climate issues. The figures from 2017-18 show that in total 20% of
government funds pay attention to climate – ranging from 45% in the Annual Development
Programme and 11% of the revenue budget. This shows good progress is underway, but that
further mainstreaming of climate into government spending is still required. Finance Division, Ministry of Finance (2017), Climate Protection and Development: Budget Report 2017-18

– The 2017-18 climate budget report does not show the quality in terms of the impacts of
climate expenditure. Is climate expenditure achieving its desired results and reducing risk and
vulnerability?

We, ActionAid Bangladesh and International Center for Climate Change and Development, request
the government to calculate household expenditures as the largest source of climate expenditures –
these are the crores of taka spent by poor women and men adapting to climate change either before
or after climate change, related change has occurred. These expenditures include changes in crop
practices, changes in house design such as plinths and after a disaster the costs of rebuilding and
replacing lost goods, overcoming illness and injury or the cost of migrating to safer locations.

As the next budget declaration is only 10 days away, we would like to encourage the government to
share the expenditure analysis as well call upon the government to provide a rigorous analysis of all
ministries and projects receiving climate finance. We understand that investing in climate change can
mean investing in both building human resources, (over 43% of the amount in 2017-18 was allocated
for capacity building) and techno-managerial solutions to climate change impact, it is extremely crucial
to invest in protecting the development gains, which means increasing the budget for disaster risk
reduction (DRR).

We demand that focus is given more on community-level preparedness rather than response and
recovery and demand increased allocation for disaster and climate change preparedness. We ask that
the Government of budget targets for the climate-related expenditure increase in real terms by 5%
a year to keep in line with the growing impacts of climate change. This will ensure that the climate
budget is enough to help protect Bangladesh against future shocks.

We also demand that BCCTF gets increased allocation as we know foreign donations and support for
climate resilient development may not reach on time and certainly may not be adequate.
Furthermore, the project funded by BCCTF must be inclusive where voices of the most impacted ones
must be captured during designing and implementation phases.

We call upon the government to allocate more into research and development to find socially
acceptable and technologically viable option on unexplored issues. The research also must seriously
consider human aspect of the development rather than a simple techno-managerial solution
It is recognized that even if we achieve the pledges made under the Paris Agreement, we will not be
able to limit the global temperature rise below the average 2⁰C therefore in coming days, we will
face increased loss and damage due to climate change.

It is therefore imperative to be prepared and establish a National Mechanism for Loss and Damage and allocate finance to safeguard the protection of disaster-impacted communities to build back better and resilient to climate change impacts.

Finally, we call upon the government to prioritize the districts vulnerable to climate change and
poverty and establish a district level funding mechanism focusing capacity building of the women,
young people and children, and promote green jobs at rural and semi-urban areas which will not
only contribute to national economic growth but will also decrease vulnerability posed by climate
induced displacement and migration.