Environment, climate 'actual allocation' decreases by 2.35% in proposed budget: Change Initiative
It is possible to green finance up to $3.4 billion annually through carbon tax and pollution levies, its chief executive said
Despite the recent increase in natural disasters in Bangladesh, the proposed FY25 budget allocates less than 1% of GDP to the climate sector and the "actual allocations" to the Ministry of Environment, Forest and Climate Change decreases by 2.35%, according to the Change Initiative.
In its analysis of the proposed budget, announced in parliament earlier this month, the research-based organisation stated that $3.4 billion could be allocated for green financing through the imposition of carbon and pollution taxes.
On Saturday (22 June), Change Initiative presented its budget analysis at a press conference at Dhaka Reporters Unity.
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M Zakir Hossain Khan, chief executive officer of Change Initiative, said, "About 5% of GDP needs to be spent in the budget to ensure climate tolerance and a clean environment. But in the proposed budget, the allocation for climate is only 0.706% of GDP."
He noted that while the allocation to the Ministry of Environment, Forest and Climate Change has increased in the budget proposal compared to FY24, the actual allocation has decreased when accounting for current inflation.
Zakir Hossain said, "As a signatory to the Paris Agreement, Bangladesh has set a target of generating 4,114.2 MW of renewable energy by 2030. On average, about Tk3,860 crore is needed per financial year, but only Tk100 crore, or just 3.2% of the required funds, have been allocated for renewable energy in the proposed budget."
He added that Bangladesh faces an overall climate finance deficit of $23.4 billion per fiscal year.
Considering the financial cost of lost workdays for people affected by disasters, the total climate finance shortfall is about $40 billion a year. Allocations from international sources are very inadequate compared to this deficit, he further noted.
At the press conference, the Change Initiative recommended implementing an environmental protection fee or tax on consumers of ready-made garments, considering the increasing prevalence of microplastics in workers' bodies and the rising pollution of water and soil.
Additionally, the organisation suggested imposing a carbon tax of 5% to 10% on fossil fuel imports, which could generate annual revenue of Tk2,060 crore to Tk4,120 crore.
Furthermore, the Change Initiative claimed that another Tk2,900 crore could be collected by imposing a 5% pollution tax on companies that pollute through plastic production, brick kilns, building construction, water extraction, and forest land clearing.
The organisation further stated that the annual average damage from tropical storms alone is about $1 billion. The Change Initiative estimates that up to 13.3 million people could be forced into internal migration by 2050 due to climate change.
