The omnipresence of a decades-old existential threat like climate change has given rise to academic streams that coined terms such as 'resilience', 'adaptation' and 'green economy', amongst a few others.
Discussions about effective long-term strategies to address climate change must persist, and this is where the notion of 'green economy' emerges. As Bangladesh continues to grapple with the mounting frequency and ferocity of natural calamities every year, concurrently, implementation of policies in pursuit of climate resilience and adaptation measures are being scaled up.
The concept of 'green economy' today is no longer restricted to the fundamentals of environmental economics, rather has emerged as a popular and frequently debated area of policy discourse.
Centring around a new economic paradigm which strongly advocates against economic expansion at the cost of environmental degradation, resource depletion, and ecological destruction, the concept of green economy calls out for greater public-private engagement and interaction.
Where governments can promote and incentivise production of 'green' products through taxes, subsidies, and restructuring of market mechanisms, the private sector can respond by exploring multi-sectoral opportunities arising out of a gradual transition to the green economy.
Private sector engagement: The status quo
For Bangladesh, 'Vision 2021' is an upcoming benchmark set for its progression towards 'middle-income' status, an aspiration fuelled by private sector-led economic expansion. Despite the huge demand to meet the socio-economic needs posed by climate change, the annual budget for addressing climate change impact in rural areas (which was $1.46 billion in FY 2018-19) remains insufficient. In such a scenario, inclusion of the private sector and a partnership between public-private to tackle climate change is critical.
Private finance is very limited in the contextualised climate change discourse of Bangladesh. In fact, private sector finance in climate resilience and adaptation is not at all commensurate with the externalities generated by production lines in private corporations.
As such, a major share of contribution needs to come from public financing of climate change. In the Bangladesh context, almost all of monetary disbursements come from national organisations and private sources of financing are strictly limited (World Bank, 2014).
However, keeping in mind the criteria for SDG financing and the need to meet the current demands for the global population, it is extremely essential that private investment is drawn into climate discourse, without which it will be impossible to tackle the climate crisis, both nationally and globally.
Recently, in Bangladesh, a number of studies have analysed potential actors/stakeholders willing to bolster private sector engagement in the battle against climate change. However, the reality is that in Bangladesh and for 99 percent of corporates, climate change is perceived to be a sector of nominal importance or at best, another channel for Corporate Social Responsibility (CSR) funds.
Identifying the barriers: What are they?
The private sector has been active in demanding good governance in the country. However, the otherwise thriving private sector has yet to implement initiatives to prepare for future climate induced hazards or to safeguard their investments.
A very important constraint in private sector engagement in climate change related projects is the lack of capacity to evaluate or assess them, which in turn is an outcome of their lack of understanding of climate change investments and risk-profiles, as well their inability to identify stakeholder/beneficiary groups.
In Bangladesh, the market for climate change investments is largely donor-driven and involves collaboration with only a handful of risk-taking private enterprises willing to consider the marginalised population as target market.
What to do: Exploring 'green' opportunities
Today, Bangladesh strives for 'inclusive' growth, and to sustain a development dynamic that truly leaves nobody behind, there is no alternative to systemic diversification by shifting focus on untapped sectors, which are burgeoning and can address the persistent problems of poverty and unemployment.
Sectors such as energy, information, communication, and technology (ICT) and tourism are on a fast-paced growth trajectory, exhibiting double-digit growth annually, and they have the potential to be game-changers by contributing to the rapidly expanding need for renewable energy and 'green' technology.
Echoing the Digital Bangladesh vision of the incumbent government, the ICT and outsourcing industry alone, earned $1.7 billion in the last fiscal year and created around 940,000 jobs. The notion of 'eco-tourism' has caught on very quickly, with the tourism industry registering a robust annual revenue of $5.3 billion in 2019.
One of the biggest upcoming industries is agri-business and agri-technology, which in turn has the potential to expand the market for climate resilient agriculture/adaptation technology through extensive research and development. Successful prototypes include hydroponics, farming of crab and sunflower.
However, potential stakeholders must take into consideration the context-specificity, cultural specificity, cost-effectiveness, local availability and environmental sustainability before investing in any new product line.
Building backward and forward linkages to overcome infrastructural barriers can help local/small-scale farmers willing to cultivate such products, engage with the large agro-processing farms, which will ensure easy access to local SMEs and financial institutions.
State-sponsored training in improved farming methods, pesticide usage and post-harvest storage techniques can make pivotal contributions in terms of capacity-building. At the macro-level, government bodies willing to facilitate the promotion of these products in the international market can play a significant role by helping the private sector attain international certifications and standards.
Conclusion: The time for nature
It is about time that we realise that magnanimous investment must be made in businesses that are environment and climate sensitive, and learn the importance of building back better, in a greener way, so that economic development and environmental sustainability go hand-in-hand.
The Covid-19 must be treated as a clarion call for the world. For Bangladesh, the pandemic period saw overarching challenges materialise in the form of Cyclone Amphan, followed by intense floods inundating north-eastern regions of the country.
As we ponder over our recovery strategies on all fronts, we must keep in mind that the transition to the 'new normal' needs to be tied to two key parameters of growth: sustainability and resilience.
Lamia Mohsin is currently working as a Junior Consultant in the United Nations Development Programme, (UNDP), Bangladesh Country Office. Her areas of interest include climate change resilience, public policy and governance. She can be reached at firstname.lastname@example.org
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.