Bangladesh wary of 'green economy' agenda at Rio+20

Tue, 19 Jun 2012

By Syful Islam

DHAKA (AlertNet) - Bangladesh will advocate for a “green economy” approach that does not constrain poorer nations’ potential to grow at the U.N. conference on sustainable development in Rio de Janeiro this week.

“We are concerned the green economy path will hamper our economic development. How effective will it be for poverty eradication?” Quazi Khaliquzzaman Ahmed, convener of Bangladesh’s climate change negotiation team, told AlertNet. “Unless poor countries get adequate funds from the major polluter (nations), it won’t be possible for them to green their economy.”

Ahmed added that Bangladesh, like other countries in the G-77 grouping of developing nations, wants to shift its economy onto a greener path, but only if it can control when and how that happens.

Some developing-country governments are concerned, for example, that if they fail to meet renewable energy targets, they could be penalised on international markets, curbing their export and growth opportunities.

Or their agricultural production might be limited if they do not get access to the environmental technologies they need to boost yields in a changing climate.

“The approach for transforming to a green economy should be country-driven, offering opportunities to improve the integration of economic and social development with environmental sustainability without hampering social development, economic growth and environmental conservation,” says the Bangladesh country position paper to be presented at the June 20-22 Rio+20 conference.

“Green economy policies should respect the national right to development, objectives and priorities based on national circumstances, including eradicating poverty, education, health, food, water and energy for the basic wellbeing of people with regard to the three dimensions of sustainable development,” it adds.

The Rio summit comes 20 years after the 1992 United Nations Conference on Environment and Development (UNCED), and 10 years after the 2002 World Summit on Sustainable Development (WSSD) in Johannesburg.

Rio+20 aims to secure renewed political commitment to sustainable development, assess progress and remaining gaps in implementing the outcomes of the previous two major summits, and address new and emerging challenges.

The two key themes of the 2012 gathering are the green economy in the context of sustainable development and poverty eradication, and the institutional framework for sustainable development.

FINANCE AND TECHNOLOGY NEEDED

Atiq Rahman, executive director of the Bangladesh Centre for Advanced Studies (BCAS), said development should be the top priority for poorer nations including Bangladesh.

“First they have to ensure peoples’ basic needs for life, which include adequate food and nutrition, safe water, electricity, adequate energy, hygienic living, education and social security. But the process they have to follow should be extremely sensitive about the environment and social justice,” he said.

“The polluters who are responsible for increased greenhouse gas emissions must give the victims (poor countries) adequate funding and environment-friendly technology,” Rahman said, before heading to Rio de Janeiro.

Fahmida Khatun, head of research for the Dhaka-based Centre for Policy Dialogue (CPD), told AlertNet that the green economy concept will be a contested issue at Rio+20.

“Developing and least developed countries, including Bangladesh, are concerned that the term ’ green economy’ will replace ‘sustainable development’ as the key theme in the environment-development nexus,” she said in an email interview.

The expert, who is attending the preparatory meeting for Rio+20 with the Bangladeshi government delegation as a civil-society representative, warned that the “green economy” agenda could be misused by richer countries for trade protection purposes, aid conditionality and debt relief.

“Bangladesh is not giving the green economy concept high status and insists that the term should only be one of several other concepts and tools that can be used to achieve sustainable development,” she wrote, adding that it should not be introduced as an international framework to prescribe policies.

“In order to follow a green development path, Bangladesh needs additional and new financial and technological support without any conditionalities,” she added.

The Bangladesh country paper states that the transformation to a green economy should be supported by an enabling environment and well-functioning institutions, with a leading role for governments and other concerned groups in society.

A green economy approach should avoid giving rise to trade measures that could lead to arbitrary or unjustifiable discrimination, or disguised restrictions on international trade, the paper says. It should also contribute to closing the technology gaps between developed and developing countries, and support the livelihoods and development of people in vulnerable situations, it adds.

Environment and forests minister Hasan Mahmud said Bangladesh will seek financial commitment from the developed world at the Rio+20 summit to help achieve the embryonic Sustainable Development Goals (SDGs). The U.N. secretary-general has called on political leaders attending the meeting to agree to define a new set of targets that will supersede the Millennium Development Goals, which expire in 2015.

“We won’t compromise on pursuing equitable growth based on environmentally-friendly means,” the Bangladeshi minister said.

Syful Islam is a journalist with The Financial Express newspaper in Bangladesh. He can be reached at: youths1990@yahoo.com

http://www.trust.org/alertnet/news/bangladesh-wary-of-green-economy-agenda-at-rio20/

Hit by growing disaster losses, insurers set limits on coverage

Fri, 1 June 2012

By Syful Islam

DHAKA, Bangladesh (AlertNet) – The growing number of natural disasters linked to climate change has pushed global and local insurers to put a cap on their liability, leaving policy holders vulnerable to financial losses in the event they suffer major destruction.

Recent catastrophes such as flooding in Thailand and Australia, earthquakes in New Zealand and the tsunami in Japan have caused enormous losses to global insurers and reinsurers.

In response, reinsurers announced recently that they will limit their future liability in any disasters in Asia to 1.5 billion Bangladeshi taka (about $18 million) per event for each insured party.

Following suit, Sadharan Bima Corporation (SBC), Bangladesh’s lone state-owned reinsurer, imposed the same condition for renewing reinsurance treaties with local insurance companies for the fiscal year 2012-13. SBC underwrites almost 80 percent of the country’s billions of dollars of insurance coverage. The cap came into effect in April.

According to the assistant general manager of SBC, Jakir Hossain, the country’s insurance companies provide coverage of some 60 billion taka ($731 million) for natural disasters such as earthquakes, floods and cyclones. The increasing frequency of cyclones and flooding in Bangladesh is believed by experts to be a consequence of climate change.

Bangladesh’s insurance companies worry that the reinsurers’ decision has put them in peril, since a major disaster that causes large-scale destruction could leave them with huge financial losses.

“The event limit of protection given by the SBC is 100 to 150 percent of the respective treaty capacity (i.e. up to 1.5 billion taka), though the exposure of the individual company against catastrophe perils is in billions of taka,” said Nasir A. Chowdhury, chief executive officer of Green Delta Insurance Company Ltd., which is based in Dhaka,

“If any such event, especially an earthquake, occurs in Bangladesh, the liability of each insurance company shall be billions of taka, which they may not be able to pay because of limited reinsurance protection by SBC and other reinsurers,” Chowdhury said.

WORSENING DISASTERS

Catastrophic flooding is a commonplace occurrence in Bangladesh. Flooding occurs during the monsoon season every year, and in the past quarter-century the country was particularly devastated by flooding in 1987, 1988, 1998 and 2004.

The 1988 flood affected more than 75 percent of Bangladesh, and in 2004 two-thirds of the country went underwater, causing widespread destruction to property and infrastructure valued at nearly $7 billion.

April of this year brought a tsunami watch to countries bordering the Indian Ocean, including Bangladesh. Heavy rains and thunderstorms have already struck the country as summer begins, claiming at least 20 lives in April, and cyclone warnings have been posted several times.

“The intensity of cyclonic wind in the Bay of Bengal has increased significantly in recent years, which we noticed in cyclones like Sidr and Aila, both of which caused a lot of damage,” said Ainun Nishat, vice chancellor of BRAC University in Dhaka.

“The frequency of disastrous events is likely to rise further,” he said.

SBC’s Jakir Hossain conceded that major destructive events are likely to hit insurance companies with huge losses.

“But we can’t go beyond the limit as that will go against our capacity. The protection limit is introduced globally,” Hossain said.

Saifuddin Ahmed Chowdhury, additional managing director of Bangladesh General Insurance Company Ltd, maintained that for events like floods and cyclones, the agreed limit of coverage by the reinsurance companies would be adequate.

“But for a massive earthquake event the coverage agreed by the reinsurer is very much inadequate which has raised the vulnerability of both the insurance companies and insured.”

The country has experienced more than 30 earthquakes of 1.5 to 6.0 magnitude on the Richter scale in the past year, according to Syed Humayun Akhter, a seismologist and supervisor of Dhaka University’s Earth Observatory. Akhter is concerned that a major earthquake may be imminent in Bangladesh.

NO ABILITY TO GET LOANS

Meanwhile, businesses that have taken out insurance against natural disasters are concerned the lack of insurance will cause problems even in day-to-day business.

Abdul Awal Mintoo, chief executive officer of Multimode Group, whose businesses include textiles, shipping, seeds, software and banking, said that if the insurance companies fail to give risk coverage to the insured, companies may not be able to access loans.

“Unless the insurance companies can provide risk coverage to our establishments, no banks will lend to us and our business will face trouble,” he said.

Against this backdrop, the country’s insurance companies are now planning to create a pool of disaster insurance funding in order to provide full coverage to their policy holders.

“We have asked all our members to inform us of their liability in case of flooding, cyclone or earthquake,” said Molla Nurul Islam, secretary-general of the Bangladesh Insurance Association.

Islam said the association would work to find ways to cover the liabilities of its members in the event of a disaster.

“We are legally bound to give full insurance coverage to the insured,” he said.

Syful Islam is a journalist with the Financial Express newspaper in Bangladesh. He can be reached at: youths1990@yahoo.com.

http://www.trust.org/alertnet/news/hit-by-growing-disaster-losses-insurers-set-limits-on-coverage