Bangladesh
Poverty and progress on climate frontline
In recent years, Bangladesh has made great strides in development, with poverty cut almost in half and infant mortality reduced by over 60% since 1990; in 2018 the country graduated from “Least Developed” status to being a middle-income country.1 But as one of the most climate vulnerable countries in the world, Bangladesh’s progress risks being undercut by sea-level rise, shifting rainfall patterns, intensifying cyclones, and migration.2 And so far at least, the country’s COVID response has showed only a rhetorical commitment to green recovery, with support for polluting sectors, fossil fuels and heavy industry.
Bangladesh’s keystone policy is the National Sustainable Development Strategy (2013), setting out a long-term vision of balance between population, development and environment. The NSDS sets reasonably strong targets and a process for annual reviews across five strategic areas and three cross-cutting themes, but the plan only runs to 2021 and as yet no follow-up document has been announced.3
The NSDS introduced a Sustainable Development Monitoring Council (SDMC), bringing together government ministries and private businesses for cross-sectoral dialogue and cooperation on social enterprise, green development and sustainability. Indeed, Bangladesh has strong track record of innovative public policy in the fields of social welfare, small business, climate change finance, and sustainable development, and is home to two of the world’s most famous social enterprises, Grameen and BRAC.
The Bangladeshi government is broadly committed to a pro-poor environmental policy agenda. All ministries that submit projects for funding must demonstrate the percentage of poor people who will benefit, what the impact on natural resources will be, and the extent of resilience of new infrastructure to climate change. Gender is a cross-cutting strategic focus for the NSDS, but other excluded social groups lack similar focus. Labour law and union suppression remains an area of difficulty in Bangladesh, despite the 2013 Rana Plana factory disaster, with unions remaining banned in designated export zones.4
Green banking is an emerging strong point for Bangladesh, with detailed regulations covering risk assessment and stress testing. The Ministry of Finance has developed a climate change accounting system (the Climate Fiscal Framework) to help allocate climate funds more effectively to the most vulnerable districts. Comprehensive social and environmental risk management guidelines exist within the Central Bank, but enforcement is somewhat patchy.
Bangladesh’s COVID policy has been similarly mixed. 2020 saw over $12 billion in stimulus spending announced, worth 4.3% of GDP, but with no attempt to prioritise green or sustainable investment – perhaps best encapsulated by the government’s no-strings-attached $118 billion bailout of Biman Bangladesh Airlines. No specifically green stimulus has yet been announced, despite Prime Minister Sheikh Hasina’s professed support for a global green recovery.5
Overall, Bangladesh’s transition to a green economy can be characterised as mixed, with some detailed policies on paper hampered by a lack of coordination and incentives to implement.
Policy Scores
Last updated 23 Oct 2022
Green COVID-19 Recovery
Bangladesh announced 21 stimulus packages in 2020 (amounting to more than USD$12 billion or 4.3% of GDP) with the aim of providing immediate relief and revitalising the country's economic activity. Funds have been directed towards households, and existing businesses and industry (including in export, agriculture, fish farming, poultry and livestock). Across the packages, the largest amounts have been allocated to working capital loans for affected industries and SMEs, establishing a fund for export-oriented industries, increasing the Export Development Fund to facilitate raw material import, providing agricultural subsidies and re-financing schemes, and providing cash and food transfers to vulnerable households.
The broad economic support provided to industry, agriculture and farming without green conditionality implies substantial negative environmental impacts, further enhanced by a USD$118 million unconditional loan to Biman Bangladesh Airlines. No green stimulus measures have been identified within these packages, though there are some mixed policies. For example, providing tax exemptions to private power generation companies excluding coal firms - which benefits renewables but predominantly oil and gas, which make up more than 75% of the power sector. Bangladesh's central bank has also doubled the amount allocated to its refinancing scheme for entrepreneurs who take up green projects, but large entrepreneurs, including key polluters, are eligible to receive loans at a lower interest rate. These stimulus policies provide continued support to fossil fuel incumbents and do very little to shift the economy towards a greener path.
Optimistically, there is the potential for this picture to change in the future, with the Bangladeshs Prime Minister Sheikh Hasina putting her support behind a global green recovery from COVID in the Financial Times, as her government begins a series of dialogues on a sustainable and inclusive recovery from COVID-19.
Bangladesh announced 21 stimulus packages in 2020 (amounting to more than USD$12 billion or 4.3% of GDP) with the aim of providing immediate relief and revitalising the country's economic activity. Funds have been directed towards households, and existing businesses and industry (including in export, agriculture, fish farming, poultry and livestock). Across the packages, the largest amounts have been allocated to working capital loans for affected industries and SMEs, establishing a fund for export-oriented industries, increasing the Export Development Fund to facilitate raw material import, providing agricultural subsidies and re-financing schemes, and providing cash and food transfers to vulnerable households.
The broad economic support provided to industry, agriculture and farming without green conditionality implies substantial negative environmental impacts, further enhanced by a USD$118 million unconditional loan to Biman Bangladesh Airlines. No green stimulus measures have been identified within these packages, though there are some mixed policies. For example, providing tax exemptions to private power generation companies excluding coal firms - which benefits renewables but predominantly oil and gas, which make up more than 75% of the power sector. Bangladesh's central bank has also doubled the amount allocated to its refinancing scheme for entrepreneurs who take up green projects, but large entrepreneurs, including key polluters, are eligible to receive loans at a lower interest rate. These stimulus policies provide continued support to fossil fuel incumbents and do very little to shift the economy towards a greener path.
Optimistically, there is the potential for this picture to change in the future, with the Bangladeshs Prime Minister Sheikh Hasina putting her support behind a global green recovery from COVID in the Financial Times, as her government begins a series of dialogues on a sustainable and inclusive recovery from COVID-19.
Governance
National green economy plan
The 2013 National Sustainable Development Strategy (NSDS) sets out the countrys medium-term growth planning, targeting a balance between population, development and environment. Climate, governance and gender are key cross-cutting areas, and annual reviews inform government action under NSDS targets. However, the plan is heavily reliant on private sector investment, lacks specific financial provisions, and is in need of updating.
The 2013 National Sustainable Development Strategy (NSDS) sets out the countrys medium-term growth planning, targeting a balance between population, development and environment. Climate, governance and gender are key cross-cutting areas, and annual reviews inform government action under NSDS targets. However, the plan is heavily reliant on private sector investment, lacks specific financial provisions, and is in need of updating.
Inclusive governance
Public consultations are mentioned as a key element in Bangladeshs policy development process, but little publicly available information on current or future consultations. A tradition of strong female leaders means governance is relatively sensitive to gender, although this is not always seen in practice. Bangladeshi corporate governance has been in the process of reform since the 2013 Rana Plana disaster, but faces weak compliance, little scope for employee input, and allows the continuation of union suppression especially in designated Export Processing Zones (EPZ).
Public consultations are mentioned as a key element in Bangladeshs policy development process, but little publicly available information on current or future consultations. A tradition of strong female leaders means governance is relatively sensitive to gender, although this is not always seen in practice. Bangladeshi corporate governance has been in the process of reform since the 2013 Rana Plana disaster, but faces weak compliance, little scope for employee input, and allows the continuation of union suppression especially in designated Export Processing Zones (EPZ).
SDG business strategy
No national program for monitoring private sector engagement on the SDGs, but the national Planning Commission has developed an SDG financing strategy which proposes engagement with businesses to promote financing, and the private sector is listed as a key consultation group under the Whole of Society Approach for managing SDG efforts.
No national program for monitoring private sector engagement on the SDGs, but the national Planning Commission has developed an SDG financing strategy which proposes engagement with businesses to promote financing, and the private sector is listed as a key consultation group under the Whole of Society Approach for managing SDG efforts.
Wealth accounting
Environmental capital not included in national wealth accounts, but the national statistics bureau collects statistics on a range of beyond GDP measures, and has published the Environmental Statistics Framework (BESF) 2016-2030, where it aims to develop national wealth accounting methods.
Environmental capital not included in national wealth accounts, but the national statistics bureau collects statistics on a range of beyond GDP measures, and has published the Environmental Statistics Framework (BESF) 2016-2030, where it aims to develop national wealth accounting methods.
Finance
Green finance plan
Existing green finance plan vague and not legally binding, but the Bangladeshi Central Bank has launched a Green Financing Initiative, and a civil society Green Transformation Fund provides financing for greening of key primary export industries.
Existing green finance plan vague and not legally binding, but the Bangladeshi Central Bank has launched a Green Financing Initiative, and a civil society Green Transformation Fund provides financing for greening of key primary export industries.
Green fiscal & monetary policy
Internal auditing on fiscal reform for sustainable development is underway at the Ministry of Finance, but no concrete policies have yet emerged. Some green monetary tools, including launch of green bonds and an industrial eco-transition fund. A Climate Fund and Climate Fiscal Framework have both been launched to ensure the transparent and efficient investment of climate finance. Partnership with the Inclusive Budgeting and Financing for Climate Resilience (IBFCR) project has developed new climate budgeting methodologies and reporting, including a citizens review platform.
Internal auditing on fiscal reform for sustainable development is underway at the Ministry of Finance, but no concrete policies have yet emerged. Some green monetary tools, including launch of green bonds and an industrial eco-transition fund. A Climate Fund and Climate Fiscal Framework have both been launched to ensure the transparent and efficient investment of climate finance. Partnership with the Inclusive Budgeting and Financing for Climate Resilience (IBFCR) project has developed new climate budgeting methodologies and reporting, including a citizens review platform.
Safe & accountable banks
Risk assessment regulation is detailed and includes financial stress testing; these do include some environmental risks (such as natural disasters) but sustainability is not part of the standard assessment. Social and environmental risk management guidelines have been published by the Central Bank, but compliance is not yet compulsory.
Risk assessment regulation is detailed and includes financial stress testing; these do include some environmental risks (such as natural disasters) but sustainability is not part of the standard assessment. Social and environmental risk management guidelines have been published by the Central Bank, but compliance is not yet compulsory.
Pricing carbon
Pilot programmes on carbon taxation for some private vehicles have begun, but a planned economy-wide carbon tax was shelved in 2017 after opposition from transport and energy sectors. No current plans for trading schemes or permits.
Pilot programmes on carbon taxation for some private vehicles have begun, but a planned economy-wide carbon tax was shelved in 2017 after opposition from transport and energy sectors. No current plans for trading schemes or permits.
Sectors
Green sectoral policy plan
Strong co-ordination approach, with the Sustainable Development Monitoring Council (SDMC) bringing together representatives from all relevant ministries, regulatory agencies, local and state governments and the private sector, to monitor progress and coordinate action. Cross-sectoral approach is currently limited by lack of clarity on ambition of environmental targets for key economic sectors e.g. industrial emitters are effectively free to pollute, facing no charges for doing so.
Strong co-ordination approach, with the Sustainable Development Monitoring Council (SDMC) bringing together representatives from all relevant ministries, regulatory agencies, local and state governments and the private sector, to monitor progress and coordinate action. Cross-sectoral approach is currently limited by lack of clarity on ambition of environmental targets for key economic sectors e.g. industrial emitters are effectively free to pollute, facing no charges for doing so.
Small business support
The central bank has a range of support programmes for SMEs, including refinancing schemes, specialised support for women entrepreneurs, training and technical development clusters. However, despite being home to two world-famous social enterprises Grameen and BRAC there are currently no policies explicitly promoting social enterprises, and no clear legal form.
The central bank has a range of support programmes for SMEs, including refinancing schemes, specialised support for women entrepreneurs, training and technical development clusters. However, despite being home to two world-famous social enterprises Grameen and BRAC there are currently no policies explicitly promoting social enterprises, and no clear legal form.
Carbon budgeting
Bangladeshs Paris Agreement commitments are for an unconditional reduction of emissions by 5% and a conditional 15% reduction by 2030, but these targets are not legally binding and carbon budgets are not a government priority.
Bangladeshs Paris Agreement commitments are for an unconditional reduction of emissions by 5% and a conditional 15% reduction by 2030, but these targets are not legally binding and carbon budgets are not a government priority.
Clean energy policy
Stated renewables objectives are for between 15 and 35% of renewable energy depending on the scenario, but the exact breakdown and path to achieve these are unclear. A Power System Master Plan was published in 2016, covering technology, investment, and tariff strategies and setting a goal for RE of 10% by 2021. The country also has one of the worlds most successful off-grid solar programmes, providing access to energy for some 16 million people, and is an innovator in the field of peer-to-peer energy trading. Polices for reducing transport or building emissions are currently unclear.
Stated renewables objectives are for between 15 and 35% of renewable energy depending on the scenario, but the exact breakdown and path to achieve these are unclear. A Power System Master Plan was published in 2016, covering technology, investment, and tariff strategies and setting a goal for RE of 10% by 2021. The country also has one of the worlds most successful off-grid solar programmes, providing access to energy for some 16 million people, and is an innovator in the field of peer-to-peer energy trading. Polices for reducing transport or building emissions are currently unclear.
People
Green jobs
Social inclusivity is a central part of the national sustainable development strategy, with different inequalities considered and potential mitigation action across disabilities, gender, class, religion, ethnicity, etc. However, overall there is little attention given to green jobs policy despite some initial scoping support from NGOs and international agencies.
Social inclusivity is a central part of the national sustainable development strategy, with different inequalities considered and potential mitigation action across disabilities, gender, class, religion, ethnicity, etc. However, overall there is little attention given to green jobs policy despite some initial scoping support from NGOs and international agencies.
Pro-poor policy
Several innovative social policies that address poverty-environment intersectionality, continue to be offset by clear policy weaknesses around worker rights and labour suppression. Public investment screening criteria that require all ministry funding proposals to demonstrate how the project will benefit the poor, impact on natural resources, and increase resilience to climate change are a particularly novel innovation. While, the Ministry of Finances Poverty, Environment, Climate Mainstreaming Project has also created a climate change accounting pilot scheme that assesses fund allocation for the most vulnerable.
Several innovative social policies that address poverty-environment intersectionality, continue to be offset by clear policy weaknesses around worker rights and labour suppression. Public investment screening criteria that require all ministry funding proposals to demonstrate how the project will benefit the poor, impact on natural resources, and increase resilience to climate change are a particularly novel innovation. While, the Ministry of Finances Poverty, Environment, Climate Mainstreaming Project has also created a climate change accounting pilot scheme that assesses fund allocation for the most vulnerable.
Participatory policymaking
Gender included in the NSDS as a cross-cutting issue and mentioned as a strategic axis, although no similar level of detail for other social groups. The NSDS was informed by a consultation process, but no mandatory consultation or monitoring requirements for marginalised groups. Policy impact assessment processes are unclear.
Gender included in the NSDS as a cross-cutting issue and mentioned as a strategic axis, although no similar level of detail for other social groups. The NSDS was informed by a consultation process, but no mandatory consultation or monitoring requirements for marginalised groups. Policy impact assessment processes are unclear.
Innovative social protection
Stronger recognition of linkages between social-environment policy in planning than policy pilots to address issues. Some attempts to innovate within existing policy frameworks, including the recognition of social support services as a tool to reduce people's vulnerability to disasters, climate change and ensuring inclusive growth.
Stronger recognition of linkages between social-environment policy in planning than policy pilots to address issues. Some attempts to innovate within existing policy frameworks, including the recognition of social support services as a tool to reduce people's vulnerability to disasters, climate change and ensuring inclusive growth.
Nature
Ocean & land conservation
The Planning Commission has prepared a detailed SDG mapping document, with commitments, national strategies and targets outlined for each SDG. In addition the current Five Year Plan and Bangladesh Delta Plan 2100 also outline actions on ocean and land sustainable development.
The Planning Commission has prepared a detailed SDG mapping document, with commitments, national strategies and targets outlined for each SDG. In addition the current Five Year Plan and Bangladesh Delta Plan 2100 also outline actions on ocean and land sustainable development.
Natural capital accounts
No information found on an overall strategy, but a small technical committee has been formed to help develop a framework and finalise methodologies for valuing water.
No information found on an overall strategy, but a small technical committee has been formed to help develop a framework and finalise methodologies for valuing water.
Natural capital committee
Natural capital accounting is not currently part of national policy, and no national body is in place to provide independent expert advice.
Natural capital accounting is not currently part of national policy, and no national body is in place to provide independent expert advice.
Nature-based fiscal reform
Anticipating challenges in reforming poverty alleviating subsidy polices that damage nature, Bangladesh has started slowly on fiscal reform. Environmental taxation is extremely low globally, and monitoring in the national biodiversity strategy action plan (NBSAP) reporting shows progress in engaging private sector in pro-poor fiscal reform was limited during 2010-15. Nature restoration policies and budgeting remains nascent.
Anticipating challenges in reforming poverty alleviating subsidy polices that damage nature, Bangladesh has started slowly on fiscal reform. Environmental taxation is extremely low globally, and monitoring in the national biodiversity strategy action plan (NBSAP) reporting shows progress in engaging private sector in pro-poor fiscal reform was limited during 2010-15. Nature restoration policies and budgeting remains nascent.
References
- UN Dept. of Economic & Social Affairs, "Leaving the LDCs category: Booming Bangladesh prepares to graduate", March 2018
- UNDP, "Bracing for climate change in Bangladesh", July 2018
- Sustainable Economic Growth, Development of priority sectors, Social security and protection, Environment, Natural resources and disaster management; with cross cutting areas of Disaster risk reduction and climate, good governance, and gender.
- ITUC, "The Government of Bangladesh Is Failing Its Workers", May 2018
- Financial Times, "Bangladesh PM says world must prioritise green COVID recovery", September 2020