Climate change undoubtedly is tagged as a curse, a major threat to global peace and security. Climate change affects human life, biodiversity, and our ecosystems. Our planet is in peril because of climate change. It is causing rapid changes, which decreases the adaptation ability of both humans and nature.
The perils are lurking around our neo-liberalist world. Rising global average temperature, widespread change in weather, increasing natural disasters, and migration are the common effects of climate change.
Despite emitting a low level of greenhouse gases, Bangladesh is the worst sufferer of climate change. Bangladesh ranked as the 7th most climate vulnerable country according to Germanwatch’s Climate Risk Index. A survey estimates that Bangladesh may lose 11% of its lands by 2050 due to sea level rise. In that time, one in every seven people will be displaced.
Climate change increases catastrophic risks that are the potential source of human casualties and loss in business. Every year, climate induced natural disasters cause 0.8-1.1% of GDP losses for Bangladesh. Data from the Global Climate Risk Index shows that Bangladesh lost $3.72 billion and witnessed 185 extreme weather events from 2000 to 2019.
The World Bank Institute estimates that about 3.5 million people are at potential risk of floods due to catastrophic rain. Six Assessment Report of IPCC estimates economic and non-economic loss of Bangladesh. Between 2014 and 2021, around 850,000 households and 250,000 farmlands were damaged due to climate change. At that time, the price of rice increased more than 30%.
Bangladesh’s potential to attain sustainable development faces challenges due to climate change. Bangladesh has been taking initiatives against climate disaster by creating a Climate Change Trust Fund, policy making, and community-based adaptation approaches. The country promotes the term “Loss and Damage” by addressing the issues as a matter of climate justice.
Bangladesh’s contribution in climate negotiation makes it a global leader. Its climate action ambitions, efforts to set goals according to the spirit of the age, and revising emission reduction plans are being praised globally.
Despite being a global leader, Bangladesh’s NRP achieved only 42.2% of its 2020 targets, which included reducing loss of lives, decreasing the percentage of GDP loss, increasing the number of adaptation sectors, and gender responsive resilient development. Research by OECD and World Bank showed that 40% of foreign development assistance to Bangladesh is at risk of climate change. Because of Bangladesh’s potential risk, it needs to balance short-term insurance contracts with long-term adaptation measures.
Insurance is a public-private regulation of contractual devices to avoid losses as a risk management instrument in adaptation measures. Adaptation is a global challenge focusing on the infrastructural measures that deal with the damage caused by catastrophe. It is a potential adaptation measurement that remains untapped in the third world.
Insurance does not typically cover a sizeable financial damage, but serves a short-term protection of assets. It finds compensation for victims of catastrophes in exchange for their insurance coverage.
Adaptation refers to an adjustment in our lifestyle as per the upcoming changes. It is an important part of the global response to climate change in order to protect people’s livelihoods and ecosystems. According to the World Life Fund, “climate change adaptation alters our behaviour, systems, and in some cases ways of life to protect our families, economies, and the environment which we live in from the impacts of climate change.”
For adaptation, Bangladesh gives priorities to water resources, agriculture, transportation, physical infrastructures, food and health, people’s health, urban habituations, and education. Bangladesh’s priorities are outlined in their SDGs, Delta Plan 2100, Mujib Perspective Plan, and Five Year Plan.
After handing over power, PM Sheikh Hasina updated NAPA to reduce the negative impacts of climate change, taking advantage of potential new opportunities through scientific methods. Bangladesh’s adaptation program ranges from building flood defense measurements, setting up early warning systems of cyclones, switching drought resistant crops, designing communication systems, business operations, government policies, and migration. In the 2021-22 fiscal year they allocated 4.16% of their total budget, which involved 25 ministries and agencies.
In the last six years, the estimated financial losses of Bangladesh for climate disasters amounted to millions. Floods alone accounted for 57% of the total financial loss. For resilience, the government shaped the National Plan for Disaster Risk Management.
The Bangladesh National Plan for Disaster Risk Management 2021-2025 outlined the adaptation measures and emergency recovery management. In this five-year plan, priority 3 highlighted on investing for disaster risk reduction for resilience. Bangladesh Delta Plan 2100 identified 34 projects as climate relevant that aim to transform Bangladesh into a resilient delta, which includes insurance as their agenda, but does not mention how insurers will pay the settlement.
Crop insurance is noticeable in our country, but we’re not acquainted with proper weather-based disaster insurance. Even though the government started an insurance program under Sadharan Bima Corporation in 1977, very few people are under these programs. Due to a lack of the number of government experts and their willingness, farmers only get a small compensation. After damage to their crops, the farmers get insurance finance, but human, household, and livestock casualties remain untouched.
Green Delta Insurance Company, BRAC, Islamic Relief, Syngenta’s Surokkha Project, including some other private insurance companies and organizations, have started weather index-based crop insurance and livestock insurance. But a majority of people, infrastructure, livestock, and business organizations are not included in insurance service. That’s why they are helpless during a catastrophe. Insurance will help to prevent migration, protect livelihoods and assets, and avoid the distress sale of livestock.
Researchers opine that climate adaptation solutions differ from place to place, are not easy to predict, and involve large pay-offs. Insurance is a short-term protection of assets to recover post disaster. Bangladesh needs to improve the capacity to identify the risks that help people to reduce the number of casualties.
The Bangladesh government needs to link disaster risk finance and insurance policies for adaptation. The government, private companies, NGOs, and civil societies should work together to help the local folks from climate disasters, and invest in inventing new technologies. Government should explore risks and financial values of adaptation with short-term insurance products.
Author: Sauid Ahmed Khan. She is a freelancer.