Mainstreaming green economy
Harnessing clean energy for sustainable development
Green Economy in the context of sustainable development and poverty eradication” is one of the themes of the recent UN Conference on Sustainable Development (Rio+20). This writeup is an attempt to scrutinize the idea whether Bangladesh possesses the economic condition, natural and cultural assets, and the policy setting to embrace, if not lead, a green economy transition, which would in turn accelerate its development.
In its simplest expression, a green economy can be described as one that is low carbon, resource efficient and socially inclusive. A green economy can take advantage of new growth trajectories designed to be more socially inclusive, as well as responsive to poverty reduction and economic diversification objectives. Therefore, mainstreaming green economy to development activities has been acknowledged by global community and reflected in the theme of World Environment Day, 2012. However, the main challenge of green economy still is whether it can work for the well being of all social groups.
The condition in Bangladesh provides a basis to pursue a low-carbon and resource efficient path of economic growth and development, anchored in investment and policy reform designed to enhance livelihoods of the poor, create employment opportunities and reduce poverty. Moving towards a green economy would also provide an opportunity to address the infrastructure challenges of Bangladesh in a sustainable way. Bangladesh currently presents a low-carbon profile, due to the low levels of carbon emissions. The economy relies significantly on natural capital assets such as agriculture, forest resources, biodiversity, tourism, minerals and oil extraction. There also exists a large potential for renewable energies.
While other countries face sizeable economic and social costs of 'de-carbonization', alongside costs linked with retiring inefficient fossil fuel-based technologies, Bangladesh can jump start the green economy transition by maintaining and expanding the sustainable practices that already exist. For example, practices such as low-carbon, labour intensive agriculture and community-based forestry, which have existed for decades in these countries, will be central to the greening of these sectors.
Bangladesh will benefit from more affordable access to renewable energy systems in a greening global economy. As the transition proceeds, high levels of demand for renewable energy technologies in developed country markets stimulate increasing innovation and economies of scale resulting in improved performance and falling prices. This makes off-grid rural electrification projects increasingly attractive to private sector investors considering community-level hydro, biomass, wind and solar facilities; and to individual businesses and households seeking to install small renewable energy systems.
Within the infrastructure services sector, other green business opportunities can be found in solid waste management and recycling in urban areas. Bangladesh is endowed with rich natural resources amenable to ecotourism, which is commonly perceived to be tourism in natural surroundings, making ecotourism another major green growth option for Bangladesh. A green economy offers significant opportunities for Bangladesh to diversify its agricultural sector through diversification into organic crops.
Trade can be a powerful connector between sustainable consumption and production to drive a transition to a green economy in the context of Bangladesh. Carefully articulated national policies and international trade rules are critical to seize opportunities in new markets while minimizing risks of trade protectionism.
Government policies can encourage a shift in production processes in vital sectors such as agriculture, thereby increasing incomes while achieving sustainability. Many recent studies and assessments have pointed to the need to reconsider methods of agricultural production in order to enhance productivity while reducing risks associated with current agricultural practices. Policies that mandate or encourage technological shifts can foster a rapid uptake of existing and efficient clean technologies with relatively low economic costs and significant returns.
“Bangladesh Government is becoming more and more positive about renewable energy technologies. Renewable Energy Policy was passed in 2008. It is likely that government would give fiscal incentives such as removal of vat, tax, provision of feed in tariff facilities etc.”
Clear policies and incentives can stimulate private sector engagement in transformative sectors such as renewable energies. The barriers to expanding the supply of renewable energy are often the same across countries, principally a lack of financial incentives and limited access to appropriate technologies. In order to encourage private investment in the development of renewable energy resources, a combination of R&D-push and demand-pull measures are crucial. Clearly set government targets are fundamental in giving confidence to private investors seeking to develop renewable energy projects.
Although most green economy activities are commercial in nature, providing positive returns on investment, external financing is sometimes required to complement public financing and catalyze private investment from both domestic and foreign sources. The need for external financing is particularly critical for green projects in infrastructure services sectors such as energy and waste management to make them commercially attractive to private investors. Public-private partnerships (PPPs) are successfully used in many developing country infrastructure projects.
A variety of specific funding mechanisms exist to respond to financing needs in the areas of climate change, trade and productive capacities, and technology needs assessments, among others To date, the Global Environmental Facility (GEF), World Bank and UNFCCC Clean Development Mechanism (CDM) have provided incremental financing for agro-forestry and infrastructure projects that reduce greenhouse gas emissions. However, financing made available through these channels is relatively difficult to access and the magnitude of funds available falls short of developing country needs. Particular efforts are needed to improve access to the Clean Development Mechanism (CDM) as a means of overcoming the financial barriers, which prevent access to renewable energy technology.
International sources of financing to support clean technology adoption and trade-related capacity building in green sectors are needed to catalyze and sustain Bangladesh's transition to a green economy. Through concerted national and international action, realizing a green economy could make a valuable contribution to enhanced economic diversification, inclusive growth, poverty reduction and achievement of the Millennium Development Goals.