Bangladesh is expected to be the most vulnerable country in the world in next 30 years mainly because of its exposure to climate-related natural disasters and sea-level rise; human sensitivity in terms of population growth and pattern, development, natural resources, agricultural dependency and conflicts; in adequate adaptive capacity to combat climate change (Maplecroft, 2010). In fact, multiple hazards instigated by various climatic factors including temperature variation, erratic rainfall, flood and recurrent flood, cyclone and storm surge, drought, saline intrusion coupled with social or non-climate factors (such as population density and poverty) are already affecting the many parts of country especially in the coastal region, north-west and low-lying areas.
The Government of Bangladesh realizing the consequences of the climate change has made striking progress in terms of policy, strategy and institutional arrangement. Following allocation of 100 million USD in 2008 and 2009 together to bring adaptation and mitigation actions on the ground, the country recently established Bangladesh Climate Change Resilience Fund (BCCRF) and approved another 100 million USD for 2010/2011 to implement the projects and programmes under six major themes (i. Food security, social protection and health ii. Comprehensive Disaster Management iii. Infrastructure iv. Research and knowledge management v. mitigation and low carbon development and vi. Capacity building and institutional strengthening) of the Bangladesh Climate Change Strategy and Action Plan (BCCSAP). This fund will be managed and implemented by the government and technical support will be provided by the World Bank to facilitate that the requirements are met in the implementation process. A governing council and a management committee chaired by the government will be the apex bodies to manage the fund. However, representatives of the line ministries, development partners and civil society will be included in both the council and management committee. In addition, a policy titled “Climate Change Trust Fund Policy” has been developed by the Cabinet as part of an integrated plan to face disaster due to climate change in the country.
The government also officially launched the “Climate Change Unit” under the Ministry of Environment and Forests (MoEF) in June 2010. At this stage, the CCU is headed by the Joint Secretary, MoEF. The unit will be equipped with 9 senior officers and 33 staff. National level experts will also be recruited as advisors to strengthen the unit and make it better functional. The MOEF and CCU have already approved 66 projects for implementation in vulnerable coastal zone, drought prone area, flood and low lying ecosystem, hilly and haor area, and charlands covering mainly water, agriculture, forestry, infrastructure, health, capacity building sectors etc. Some of the projects are approved for conducting action research and institutional strengthening. However, most of these projects will be implemented by the different relevant government institutions. Some of the projects will be implemented by NGO or Civil Society Organizations at both national and local level.
The El Nino/La Nina-related monsoon floods that have devastated Pakistan since July highlight the fast growing need for an international risk transfer mechanism for weather-related events.
With the sheer size and protracted duration of the disaster, as well as donor
fatigue, disaster response funding has fallen far short of the mark in Pakistan’s time of need. UN Secretary General Ban Ki Moon bemoaned the fact that too little aid is coming too late to help the estimated 21 million homeless and flood-affected people of Pakistan.
How could an international insurance mechanism within the UNFCCC process help in case of such events? The first step is to link serious risk reduction measures to wider climate risk management strategies.
The second is to ensure that an international insurance approach, supported by the international community, catalyses adaptation and risk management in countries facing rising climatological risks. The benefits
should include incentives focused on risk reduction, and advance planning for adequate
financial resources when and where they are needed.
Experience has shown that insurance mechanisms can make payouts rapidly. In the Caribbean, CCRIF insurance payouts were the first to reach Haiti after the calamitous earthquake – a month before humanitarian donations began flowing.
One challenge is the difficulty of guaranteeing that insurance payouts will be used
effectively and appropriately by participating governments. One way to address this concern is to establish national climate change funds to serve as the recipient of
international insurance payments. Bangladesh has such a fund, governed by a multistakeholder committee (rather than a government ministry). In this approach, payment distribution modalities can be devised before disaster strikes. This also complements wider adaptation strategies by encouraging the coherence of risk management strategies and ex ante planning.
Chapter 2, paragraph 8 of the AWG-LCA text considers the establishment of international insurance coverage as one function of a broader mechanism to address loss and damage from climate change. Devastating events – the flooding in Pakistan is an exemplary case – underscore the urgency. This kind of mechanism should be one of the operational elements of the adaptation framework negotiated in the UNFCCC process and should be financed from a share of international funds provided for adaptation.
Finally, setting up regional pilot programs through fast-start finance could generate important lessons on the specific operational modalities of such a mechanism. That will catalyse adaptation, promote more effective risk management, and support humanitarian efforts in vulnerable countries.
Bangladesh signed an agreement to set up a Climate Resilient Fund with the UK, Sweden, Denmark and the EU at a ceremony featuring Dr. Hasan Mahmud, State minister, Ministry of Environment and Forest, and ambassadors from the contributing countries in Dhaka on 31 May. Connie Hedegaard, EU Commissioner for Climate Action was also present. The total amounts initially pledged are over $100 million which will be used to implement the Bangladesh Climate Change Strategy and Action Plan (which includes both adaptation and mitigation actions). 'This is a pathbreaking example for an innovative new approach in national climate action,' said Dr. Saleemul Huq, senior fellow of the International Institute for Environment and Development. 'This is a developing country taking the lead on national climate action with coordinated support from other countries, and showcases a new paradigm based on transparency for both donor countries and citizens'. The Climate Resilient Fund will consist of contributions from developed countries and supplement the $100 million already allocated in Bangladesh's national budget for implementing its Climate Change Strategy.