Bangladesh, as an economy, has performed remarkably well in the recent decade regardless of socio-political obstacles. It has maintained an average economic growth of 6% per annum and performed well in reducing the poverty rate to 24.3% and extreme poverty rate to 12.9%. Bangladesh desires to reach upper middle-income status and eliminate extreme poverty by the fiscal year 2031. Although the stable growth rate and positive outlook of the future make us optimistic about the targets Bangladesh is aiming at, climate change challenges may impede such growth aspiration.
Ganges-Brahmaputra-Meghna (GBM) Bangladesh delta is one of the largest deltas in the world and is highly vulnerable to natural disasters because of its geographical position, population density, illiteracy and lack of institutional setup. Evidence suggests that the regular occurrence of natural disasters such as flood, cyclones, salinity intrusion, rise in sea level, river bank erosion, rising temperatures, high humidity, etc. has been a real threat to the overall economic development scenario of Bangladesh. Due to the deltaic formation of the country, natural disasters and climate change, Bangladesh has been ranked as the 6th most suffered country from extreme weather events for the period 1997-2016. During this period, Bangladesh lost 0.68% of GDP annually and experienced an average 0.44 deaths per 100,000 inhabitants each year (Global Climate Risk Index, 2018). Climate change and global warming data of NASA depicts that the sea level rises by 3.4 millimetres per year with the increasing global temperature of 1.7°F each year. Such climatic changes will make it further difficult for Bangladesh by damaging food security, hurting the economy’s growth and harming the poverty reduction effort unless they are managed comprehensively.
The climate factors affect several sectors and lead to economy wide substantial losses. Agriculture is the most vulnerable sector. In the future, climate change, especially, high temperature, humidity and radiation could reduce yields of high-yielding varieties of rice at a significant level. The increase in soil salinity will also contribute to the contraction of agricultural production. Agriculture will also suffer because of the frequent flooding caused by climate change. The forestry and ecosystems of the country will also be affected. The sea level rise (SLR), higher temperatures, an increase in cyclone intensity will damage the forest resources and the diverse ecosystem. Additionally, the SLR will result in permanent inundation of a significant part of dryland. The land quantity shock will lead to the fall in production in all sectors and ultimately, would lead to a fall in real GDP. The climate change could affect the economy of Bangladesh adversely by incurring an average loss of 2% of GDP per annum by 2050 and it may increase to 9.4% by 2100 (ADB, 2014). The majority of the working age population from the South West region of Bangladesh earns their livelihood by working in the agriculture, forestry and fishing sectors. Therefore, the overall unemployment rate may increase due to the reduction of agricultural production. There is a positive correlation between the intensity of natural disasters and poverty rate. Hence, climate change will play a role in deteriorating the poverty status, especially, of the disaster-prone areas since majority of the coastal districts that are most exposed to natural disasters show poverty rates that are higher than the national average.
Adapting climate actions such as developing the resilience capacity of communities, building emergency cyclone shelters, enhancing the capacity of government agencies to respond to emergencies, intensifying river embankments and coastal polders, reducing saline water intrusion in agriculture-dependent areas, executing the early warning and emergency management systems, etc. could be a possible way to avoid the worst impacts of climate change on the macroeconomic indicators. The diversity and universality of the problem will make the task trickier in future. The successful implementation of well-coordinated long-term adaptation and mitigation policy measures will be the key in the way of ensuring the sustainability of agriculture, food security and livelihoods. Moreover, the amount of financial and technical support received by Bangladesh will determine how well Bangladesh deals with climate impacts and their subsequent effects. Therefore, the incremental financial support from private sector and innovative alternatives (i.e. carbon tax) for climate financing will be crucial to accommodate the total demand of financing the climate projects.