A discussion of the challenges to implementation of action on climate change for donors, for Government and for civil society which arise from funding, monitoring and planning constraints

Hedger, Merylyn

IDS OpenDocs

EDC2020
Despite progress, there is still work to do on climate change 
adaptation programmes in Bangladesh. Bangladesh as a 
Least Developed Country (LDC), is one of the most vulner-
able countries in the world to climate change due its ex-
treme environmental vulnerability to climate hazards. 
Since the first NAPA (1995) there have been a series of 
policy and institutional changes undertaken by the Gov-
ernment. There is a widespread awareness the dangers 
that climate change poses for economic growth. Since 
2008, Bangladesh has its Climate Change Strategy and 
Action Plan (BCCSAP) which provides an overall frame-
work for action on adaptation. Bangladesh shows a 
positive expansion of effort on climate funding: by the 
Government of Bangladesh (GoB), and donors, notably 
the EU and its member states, particularly the UK.     1
Challenges to implementation of action on climate 
change for donors, for Government and for civil society 
arise from funding, monitoring and planning constraints.
Consolidation of funding routes
It will be vital to ensure there is consolidation and con-
vergence through the newly established funding routes. 
Contested issues over the past three years between the 
GoB and NGOs on one side and donors and the World 
Bank concerning control of funds and perceived fiduci-
ary risk have been resolved, so that there are now two 
trust funds. One is funded by the GoB (the Bangladesh 
Climate Change Trust Fund – BCCTF, $100million) and 
the other funded by several donors (the Bangladesh 
1. This brief derives from a case study undertaken within the EDC 
2020 project between November 2010 to January 2011 which 
included meetings with Government officials, donors and NGOs.
[ OPINION ]
Climate Finance in Bangladesh: 
Ongoing Challenges1
By Merylyn Hedger, Institute of Development Studies and 
Overseas Development Institute
Project funded under the 
Socio-economic Sciences and 
Humanities theme
Climate Change Resilience Fund – BCCRF, $110 million). 
There are also two multi-donor programmes on climate 
change. One is part of the World Bank’s Pilot Programme 
for Climate Resilience (PPCR), the Bangladesh Special Pro-
gramme for Climate Resilience ($110 million). A second 
phase of the Comprehensive Disaster Management Pro-
gramme (CDMP) has started (2010 with $70 million), 
which includes some activities on climate change. Each 
mechanism draws on different funding routes. For those 
who have created them, they are perceived to have differ-
ent functions, be closely aligned and be complementary. 
Organising the institutional arrangements and getting 
buy-in from all parties has taken considerable time.
From the outside, it is not clear yet how each will be dif-
ferentiated coherently in terms of action on the ground. It 
is vital that there is a learning-by-doing phase and experi-
ence is shared and that there is a move to convergence 
to reduce transaction costs. Relative success amongst the 
different funding routes should be carefully monitored so 
that good practice can be shared and further investments 
channelled in the most effective ways. Current commit-
ments on climate change finance fall way short of what 
will be required so it important to structure institutional 
arrangements effectively at an early stage.
Monitoring, reporting and verification (MRV)
It will be necessary to define what is climate funding and 
what is development funding to create a clear baseline 
during 2011 over which future effort can be monitored. 
This will be required if monitoring, reporting and verifi-
cation of climate finance is to work, within the context 
of the MRV discussions in the UNFCCC around »new and 
No. 8  .  March 2011
1
additional« funding. This will be very challenging. Collec-
tively, the EU (member states and the European Commis-
sion-EC) is a major player in the Fast Start Funding (FSF) 
and funds already allocated to Bangladesh have been 
designated »fast start«. However, Member States are in-
terpreting what can be designated FSF in different ways, 
and this relates to the fundamental »new and additional« 
issue within the UNFCCC. Various analyses have shown 
what a wide range of interpretations are possible. There 
is a need for some consistency, so there is predictability 
for Bangladesh.
This is a problem as there are very weak records every-
where, including development partners, on projects and 
no coherence on modalities for data collection. There is no 
clear storyline on what has been done so far and there is a 
need for a clearing house (and to include research). How 
were the current FSF projects identified? Development 
partners need to be more transparent and work to clearly 
established priorities over medium term timescales.
Planning for change
Bangladesh has increasingly become a significant player 
in the United Nations Framework Convention on Climate 
Change (UNFCCC) negotiations as a LDC with special 
status and with moral voice. It can expect additional 
funding as an LDC and has already received some EU fast 
start funds (FSF). It is demonstrating leadership globally 
with its own trust fund. However the Government of 
Bangladesh (GoB) needs to ensure its own citizens con-
tinue to back investments to avert potential failures on 
climate change action, and to ensure donors can main-
tain the confidence of their citizens.
The Bangladesh Climate Change Strategy and Action 
Plan is not a costed and sequenced delivery framework. 
Fewer controversies would emerge between the Govern-
ment, civil society and donors on funding allocations and 
fast start funds, if there could be agreement on priorities. 
Enhanced action under the Local Coordinating Group 
on Environment and Climate Change could provide one 
crucial mechanism to build trust around prioritisation. Is-
sues around planning is not a problem which is unique 
to climate change as weaknesses in the GoB’s overall ap-
proach to development planning have been identified 
during assessment for aid effectiveness in that the pre-
paratory phases do not ensure participation of all stake-
holders2. Generally efforts to embed climate change into 
the development planning process (annual, five year and 
longer term development planning) need to be consider-
ably strengthened and given a higher profile.
This is especially important as external assistance is 
likely to be only part of the story. An important assess-
ment has been made of the impact of climate change on 
the Annual Development Plan (ADP) of Bangladesh3. It 
has been estimated that about $2.7bn of investment is 
now at risk due to climate change. These figures dwarf 
what is currently being mobilised for climate funding 
from donors ($230mn).
One of the additional limitations which affects all 
players is capacity to develop robust programmes and 
spend money effectively. As a cross-cutting issue, there 
are challenges for all players to handle the coordination 
demands. Strengthening of the Ministry of Environment 
and Forests is not completed and there is a need for more 
capacity in all key ministries. Capacity constraints on pro-
gramme development are also evident in donors and 
NGOs. Capacity issues also seem to inhibit private sector 
involvement, despite various efforts to raise awareness. 
There is a lack of capacity in financial institutions in both 
public and private sectors to evaluate projects, so that the 
lack of understanding of specific types of climate change 
investments and their risk profiles means that banks 
often find it difficult to develop and structure appropri-
ate financial products4.
Bangladesh has been an early mover on adaptation 
and is an international player. But, unless the GoB and 
development partners step up together to act, there is a 
danger that momentum will dissipate and efforts frag-
ment. Implementation and delivery should be the new 
focus for effort.
2. Polycarp, C (2010) Governing CC finance in Bangladesh. An as-
sessment of the Governance of Climate Finance and the Paris 
Declaration on Aid Effectiveness. A report for CDDE October 2010
3. Haque, A.K. An Assessment of climate change on the Annual De-
velopment Plan (ADP) of Bangladesh 15-11-09
4. Asian Tiger Capital Partners 2010. A strategy to engage the pri-
vate sector in CC adaptation in Bangladesh. Prepared for the 
International Finance Corporation. September 2010.
EADI
Kaiser-Friedrich-Strasse 11
D-53113 Bonn
Tel.: (+49) 228 . 2 61 81 01
Fax: (+49) 228 . 2 61 81 03
www.eadi.org
www.edc2020.eu
This publication is an outcome of ongoing research in the framework of the 
project on European Development Co-operation to 2020 [EDC2020]. This 
project carries out research on three major emerging issues: new actors in 
international development, the linkage between energy security, democracy 
and development and the impact of climate change on development. 
Consortium partners: European Association of Development Research and 
Training Institutes (EADI, Germany), Overseas Development Institute (ODI, 
United Kingdom), Institute of Development Studies (IDS, United Kingdom), 
German Development Institute (DIE, Germany), Fundación para las Relacio-
nes Internacionales y el Diálogo Exterior (FRIDE, Spain), Society for Inter-
national Development (SID, Netherlands).
2


Climate Finance in Bangladesh: Ongoing Challenges

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Climate Finance in Bangladesh: Ongoing Challenges

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