Wednesday, May 24, 2017

Climate-threatened Bangladesh to impose carbon tax in June

By Syful Islam

DHAKA, May 23 (Thomson Reuters Foundation) - Bangladesh is set to impose its own carbon tax on fuel next month – despite the hugely climate-vulnerable country producing relatively tiny per capita emissions.

The tax is expected to be put in place on June 1 as part of the country's annual budget and will be part of a larger bundle of "green" measures, Nojibur Rahman, chair of the National Board of Revenue, told the Thomson Reuters Foundation in a telephone interview.

Many businesses and environmental groups have welcomed the plan, saying that Bangladesh – one of the countries considered most threatened by climate change impacts – needs to make a strong statement as governments like that in the United States pull back from action on climate change.

The new tax may not make any significant contribution to achieving the Paris Agreement's goal of keeping average global temperature increases below 2 degrees Celsius above pre-industrial levels, they said.

But "when a country pollutes, the other countries are also affected. So, we need to reduce carbon emission as much as possible and imposing a tax is only way to do it," said Abdul Matlub Ahmad, outgoing president of the Federation of Bangladesh Chambers of Commerce and Industry.

He said the tax would not only raise the price of using fossil fuels but the added income could help push more use of renewable energy.

"If the government wants to cut the import duty on environment-friendly renewable energy products, it needs to charge taxes on polluters," he said in a telephone interview.

Bangladesh produces about 0.44 tonnes of carbon dioxide per person, much lower than the United States' 16.4 tonnes, Australia's 16.3 tonnes and Qatar's whopping 40.5 tonnes, according to World Bank figures.


 Brick kilns produce black smoke at a brick producing factory in Bangladesh's Narayanganj district, close to Dhaka. Thomson Reuters Foundation/Shafiqul Alam


RISING RISKS

Carbon taxes – which raise the cost of using fossil fuels by creating a charge for the climate damage they do – are one of the simplest, most market-friendly ways of driving climate action, experts say.

But they have proved politically tricky to put in place, and not just in poorer parts of the world where incomes are low and making fuel more expensive can be politically risky.

But low-lying Bangladesh, which faces huge risks from sea level rise, worsening storms, floods, droughts and other climate change impacts, has made a name for itself as an international leader in climate action, particularly in terms of innovative adaptation to climate change.

"Although our contribution to climate change is very nominal, we are one of the worst victims of climate change. Aware of the problem, we have the most successful and best climate change programmes the world has so far witnessed in any country," Finance Minister A.M.A. Muhith, said earlier this month at a Dhaka summit on climate change and disaster risk reduction.

While it seeks international finance to help with programmes to address climate change, Bangladesh also has paid for projects out of its own nationally funded climate change fund.

M.A. Matin, general secretary of the Bangladesh Poribesh Andolon (Bangladesh Environment Movement), said in a telephone interview that any carbon tax would need to be accompanied a "long-term carbon reduction plan" from the government.

In the short term, higher taxes on industry can drive up production costs, with those costs passed on to consumers. That might mean "it's not a right method for reducing emissions," he said.

Md. Khalequzzaman, a Bangladeshi professor at Lock Haven University in Pennsylvania, said he believed that in a poor nation like Bangladesh industry – rather than consumers – should bear the cost of the new tax.

"I feel that the financial beneficiaries of carbon emissions should bear the tax as a part of their corporate social responsibility. The ordinary people should not be burdened with the additional cost of using power," he said in an interview.

He suggested that alongside imposing the carbon tax, the government should look at developing renewable sources of energy in the country.

(Reporting by Syful Islam; editing by Laurie Goering :; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women's rights, trafficking and property rights. Visit http://news.trust.org/climate)





Friday, May 12, 2017

In threat to food security, Bangladesh moves to burn grain for fuel

By Syful Islam

DHAKA, May 1, 2017 (Thomson Reuters Foundation) - Bangladesh plans to begin turning some of the grain it produces into ethanol to make its fuel greener – but economists and experts warn the move could hurt food security in a country that is already a grain importer.

Energy ministry officials said in a gazette notification early this year that the country will begin using maize, broken rice grains and molasses to produce ethanol to mix with petrol fuel at a 5 percent ratio.

But in a heavily populated country that produces relatively little in the way of climate-changing emissions and that already relies on imports of maize and other grains, the result could be rising food prices, especially for the poor, economists, business leaders and environmental experts warned.

Moshiur Rahman, who convenes the Bangladesh Poultry Industries Coordination Co
mmittee, called the move to begin using grain for fuel "suicidal".

Much of Bangaldesh's maize is used to feed animals, including chickens. But the country grows only half of the maize it needs, importing the rest from the United States and Brazil, he said, which means rising demand could mean rising prices.

"Maize prices will go up if it is used for ethanol production. The price of eggs and chicken will go beyond the reach of common people," Rahman warned.

He said growing concerns about food security have led other countries – including China – to stop giving permission for new biofuel projects.

FOOD TO FUEL

According to a study by Bangladesh's energy ministry, the country could produce 18 million liters of ethanol a year, or about 75,000 liters each working day. That would require 60,000 tonnes of broken rice each year – about 3.5 percent of the country's total production.

Alternately the county could produce the ethanol with 62,000 tonnes of maize (2.8 percent of production) or 97,000 tonnes of molasses (nearly all of the country's production).

The study warned that if the government scales up ethanol production beyond those levels, it will raise demand for grain to the point that it could hurt food security.

But junior energy minister Nasrul Hamid told the Thomson Reuters Foundation by telephone that Bangladesh needs to go for greener and more varied fuels in the future, like other nations.

"So, we are exploring the possibility of using bio-ethanol with other fuels. You can't remain out from the global trend of energy use," he said.

He confirmed the ministry plans to give permission for ethanol production, and then would judge from early experience whether to scale up the experiment.

"Yes, we are going to give permission for bio-fuel soon. Let's see what happens first. Its impact on food security will be considered than," Hamid said.

But others warn that Bangladesh has decided to burn food grains to produce ethanol without taking into consideration the food security of its 160 million people.

That is a particular worry in a low-lying country that faces severe climate change threats, including loss of crops and crop land to worsening salt-water intrusion, droughts, floods, storms, sea level rise and erosion.

Already many people face daily hunger and can manage meals only once or twice a day, experts say. Last year, Bangladesh ranked in the top 25 percent of the world's most hungry countries, according to the Global Hunger Index of the International Food Policy Research Institute.

Bangladesh today produces about 1.8 million tonnes of broken rice, about 100,000 tonnes of molasses and less than half the 6 million tonnes of maize it needs each year, according to the country's Energy Ministry.

Besides being used as livestock food, maize is eaten by poorer people, mixed with flour as a cereal or made into biscuits. Lower-income people also eat broken rice for breakfast and make it into cakes.

But prices for the grains are rising. A kilogram of coarse rice is now being sold at 42 taka (50 cents) in Dhaka, up 25 percent in price from a year ago, according to the government Trading Corporation of Bangladesh.

Rising food prices are a major concern, with a growing portion of people's earnings now being spent on food. The country's food inflation rate in February was 6.8 percent, up from a record low of 3.8 percent a year ago.

About 13 percent of Bangladesh's people fall below the national poverty line of $2 per day, according to World Bank data.

The country produces about enough rice to meet demand but imported 4.5 million tonnes of wheat last year to meet demand for that grain, according to the country's food ministry.

WRONG-HEADED DECISION?

Despite rising demand for food, Khan Md Aftabuddin, managing director of Sunipun Organics Ltd. – the company that first applied for government permission for ethanol production – said turning grain into fuel would not pose any threat to food security for Bangladesh.

He said the byproducts of ethanol production could be used as poultry or fish food, and that more maize could be grown on delta islands if demand for it rises.

"If needed, we will produce maize in char lands of the country as raw material for our plant," Aftabuddin said. Bangladesh needs to turn to renewable energy to keep its environment clean, he said. But Mohammad Moinuddin Abdullah, secretary to the Ministry of Agriculture, said creating fuel using maize – which is increasingly being imported to make up for rice and wheat shortfalls – doesn't seem to make sense.

"I do not see any valid reason for using maize and broken rice for ethanol production," he said.

M. Asaduzzaman, a fellow of the Bangladesh Institute of Development Studies and a member of the country's climate change negotiations team, said he also disagreed with the move toward producing ethanol from grain.

"We have tremendous difficulties in livestock nutrition. If maize is now used to produce ethanol, the cost of livestock production will go further up causing further animal protein deficiency," said Asaduzzaman, also a former vice chairman of the International Commission on Sustainable Agriculture and Climate Change.

"This is a wrong-headed decision," he said.

Bangladesh's per capita carbon emissions are tiny compared to those of more developed countries, and should not be as great a concern as protecting food security, he said.

"When we can't meet basic nutritional need, we don't need to go for clean energy," he said.

Khondaker Golam Moazzem, a research director at the Centre for Policy Dialogue, a Dhaka-based think tank, told the Thomson Reuters Foundation that he is concerned that ethanol production, once started, could be scaled up in the future, particularly if oil prices eventually rise.

That could lead to more demand for maize and for land to grow it. "Then, staple food production will be hampered since Bangladesh suffers from acute farmland scarcity," he warned.