WB warns of steep cost of climate change

If carbon dioxide emissions continue unabated throughout the 21st century, the costs from riverine flood damages and decreased agricultural and worker productivity due to the temperature increase will go up to 4 percent of the country's GDP per year by 2050, according to a new report by the World Bank.

Currently, (2023) the cost is about 0.5 percent of GDP per year.

If the emissions start declining by approximately 2045 and remain fairly constant for the next 50 years, then the cost can be capped at 2 percent.

"Economic loss from flooding is anticipated to be severe," said the report, titled "Bangladesh Country Climate and Development Report", released by the WB yesterday.

Current heat stress patterns are set to increase in severity, and extreme rainfall events are also likely to increase in magnitude.

"Rainfall volume during extremely wet days and the frequency with which rainfalls occur are set to substantially increase," said the report. "This is especially the case in the northern divisions that are already facing the most severe precipitation events," it added.

"Areas with a historical pattern of a large number of consecutive dry days each year -- mainly the western divisions -- will experience further increases in short-term dry episodes," said the report.

The annual cost of environmental health effects was estimated to be Tk 4.4 trillion in 2019, equivalent to 17.3 percent of the GDP, as calculated by the WB.

"Most of the population is exposed to high ambient concentrations of PM2.5, which contains Black Carbon. Higher drinking water salinity from rising sea levels will increase the prevalence of diarrhoea and cardiovascular diseases," said the report.

The World Bank estimated that up until 2030, Bangladesh will have to invest a minimum of $32.5 billion and a maximum of $143.7 billion in climate finance. This is between 3.28 and 7 percent of the GDP.

"Reaching these ambitious targets is challenging, with substantial reforms required to overcome longstanding domestic and foreign investment constraints," said the report.

"The banking sector's capacity to provide financing and price risks is constrained by weak corporate and regulatory governance, related party lending and weak credit underwriting capacity, contributing to weak asset quality," the report mentioned.

"Access to foreign borrowing is limited by a high level of foreign exchange restrictions."

The WB report also said the government's flagship climate action plan -- Bangladesh Delta Plan 2100 -- needs to be prioritised and financed.

"Although the majority of the top 20 ranked projects are included in the 8th Five-Year plan, only two are budgeted," noted the report.

"Of the 48 projects in the 8th Five-Year plan and 19 in the 9th Five-Year Plan, only 16 have development project proposals in place, and/or feasibility studies that are ongoing or have been completed. Overall, the institutional capacity to prepare bankable projects is relatively low."

Estimates from this year show that women-led households are disproportionately affected more when adapting to climate change. While the cost of adapting is 15 percent of the total household expenditure for male-headed households, it is as much as 30 percent for families headed by a woman.

The report was launched at a city hotel, where John Roome, regional director of South Asia Sustainable Development of World Bank, presented the findings, with Planning Minister MA Mannan as chief guest of the event.

Among others, Dandan Chen, acting country director of WB for Bangladesh and Bhutan; Prof Saleemul Huq, OBE, director, International Centre for Climate Change and Development; Runa Khan, executive director, Friendship NGO; Alex Harvey, team leader, Climate & Environment, Foreign, Commonwealth & Development Office, British High Commission; Folkert GJ de Jager, first secretary, Water Management & Food Security, Embassy of the Kingdom of the Netherlands; Sonia Bashir Kabir, founder, SBK Tech Ventures & SBK Foundation; Dr Abdul Hamid, director general, Department of Environment, and Abul Kalam Azad, former principal secretary to the prime minister, were present.