Approaches to Address Loss and Damage for Climate Change Impacts: Lessons from Bangladesh Photo Habib Torikul
Photo Habib Torikul Background Bangladesh is one of the most climate-vulnerable countries in the world (Pervin M, 2013). Over the last thirty years, Bangladesh has experienced nearly 200 climate-related disasters which have accounted for around $16 billion economic losses including the damage of assets, property and livelihoods (CRED, 2013). Moreover, these estimates do not take into account losses that are difficult to quantify such as loss of life, culture, and ecosystem services. Many effective adaptation and risk reduction measures are already being undertaken in the country, but gaps and challenges remain. None of the approaches can offset loss and damage risk individually. To a large extent, it is unclear what specific loss and damage climate change will bring in the future. We are not educated, but can sense that something grave is happening around us. I couldn t believe my eyes the land I had tilled for years, that fed me and my family for generations, has vanished. Our livelihood is lost."
Addressing Loss and Damage Approaches to address loss and damage can be grouped into three categories including risk reduction, risk retention, and risk transfer (UNFCCC, 2012). Bangladesh has a number of policies and programmes related to disaster risk reduction and climate change adaptation. The Government of Bangladesh as well as NGOs and other development actors do intervene in a post disaster scenario to address loss and damage associate with disasters. Such programmes include both structural and non-structural ones. However, none of the programmes were designed to address climate induced Loss and Damage, rather loss and damage from disasters; especially the sudden ones. The popular programmes such as Vulnerable Group Feeding (VGF), Gratuitous Relief (GR), Food for Work, Test Relief Programme and Employment Generation Programme etc. are introduced mostly to respond to post disaster poverty (M.A. Awal, 2013) therefore effectiveness of the programmes are often questioned (which also is linked with how the programmes are governed). Photo Habib Torikul When we were young, we d go out for an hour and come back with enough fish for a day. But now we go for eight hours. Fishes are rarely found now in the river even in the month of Ashar, the best time of fishing said Khalilur Rahman
Along with other social safety net programmes, Bangladesh has introduced flood management schemes, coastal polders, cyclone & flood shelters, rising of the roads and invested over $ 10 billion in association with development partners to make the country less vulnerable to destructive phenomena including climatic shocks since last 35 years (Hassan R et.al., 2013). Despite of the wider range of efforts, some 64 percent of the poor households do not have access to any social protection program in the country (GoB 2014). To address Loss and Damage there are four main risk management techniques i.e. risk reduction, risk retention, risk transfer and approaches to specifically target L&D from slow onset problems (Warner, 2012). The soil is no longer fertile. There is not enough rain. what should we do?" Suruj Mia (45) Photo Habib Torikul Approaches for Addressing Loss & Damage
Approaches for Addressing Loss & Damage Risk Reduction Structural Risk Reduction and Non Structural Risk Reduction L&D for Slow Onset climatic processes Resource Management; Awareness & Capacity Building ; Research, Development & Innovation; Lands Use Planning and Agriculture Practice Efficiency; Contingency Planning etc. Approaches to Address Loss & Damage Risk Retention Social Safety Nets and Microfinance Risk Transfer Micro-insurance
Risk Reduction Risk reduction refers to some measures implemented prior to the occurrence of an extreme events. It is effective for frequent yet low impacting climate stressors. Structural risk reduction aims to build physical infrastructure and protection structures such as dykes, cyclone shelters, and flood protection wall/seawalls. Non-structural risk reduction techniques improve systems such as early warning, adjustments in livelihood practices like agriculture, and relocation programmes. Structural measures can be costly to build and maintain, whereas non-structural approaches can be relatively inexpensive but required continuous monitoring. It evident at national level as well as sub national level that the government of Bangladesh is well equipped with knowledge, skill, capacity and equipment to reduce risk of sudden onset disaster. It was also found that the current risk management mechanism mostly focuses on pre disaster awareness, infrastructure development and post disaster response and rehabilitation. However, if there are more frequent events taking places with higher intensity, the current approach of risk management may not work. In addition, the current mechanism mostly focuses on saving lives of the human being however, does not consider much in terms of saving assets and livestock during and post disaster period. Risk Retention Risk Retention refers to the approaches that allow populations to self-insure against climatic stressors. There are social, physical and economic advantages, particularly social safety nets and contingency funds. Financial risk retention can be passive where budgets are reallocated in the case of an emergency, or proactive when financial planning and tools, like reserve funds, are used to offset unexpected financial burdens incurred due to climate stressors. Unfortunately, one of the major disadvantages of risk retention is the significant burden placed on the public sector when unplanned and unforeseen expenses emerge. Two of the most common risk retention policies in Bangladesh are social safety nets and micro insurance programs. Social safety nets: According to a recent report by UNDP, Bangladesh has spent an average of 1.64 billion USD per year or 1.6 percent of GDP on social safety nets (PCCC-UNDP, 2012). The trend has been towards cash for work programs rather than the traditional food for work programs based on the belief that there is less waste and leakage with cash transfers and evidence that these programs are more successful (Ahmed, 2013). The GoB has also implemented a post-flood program to provide agricultural subsidies to affected farmers. In 2007 the GoB provided 12.7 million USD in relief in the aftermath of two flooding events, 4.6 million USD for recovery from Cyclone SIDR and 2.9 million USD for agricultural rehabilitation (Finance Division, 2008). Approaches for Addressing Loss & Damage
Approaches for Addressing Loss & Damage Microfinance: There are over 1200 certified microfinance institutions in Bangladesh, which serve 13 million clients (CDF, 2002). Traditionally microfinance institutions (MFIs) have provided loans to groups of individuals, women who together are responsible for replaying loans (Hammil et al., 2008). These programs help the poor purchase assets, diversity their income and invest in activities like strengthening their homes. However, the microfinance program tends to service some specific areas within Bangladesh rather than the country as a whole. Risk Transfer Insurance mechanism shifts economic risks, mostly financial, from an individual or organization to an insurer. Risk transfer approaches do not prevent or reduce the risk of damage or loss; however, it is trying to reduce the effect of the loss and damage by making financial liquidity available to overcome them i.e. it is a compensatory mechanism. Risk transfer is typically associated with a fee for the service provided and is undertaken when the country or entity assesses the potential onset of L&D could be greater than its ability to manage the costs. Risk transfer comes in the form of insurance (micro-, macro-), catastrophe bonds, and conditional risk transfer. It is used to reduce the uncertainty and volatility, but it does not directly prevent or reduce the risk of damage or loss. The market based approach to offer financial relief after an event, commonly in the form of insurance, is the most popular reactionary approaches measure to risk management. Unfortunately, market based for-profit insurances are unlikely to be a feasible instrument to address poor peoples needs in developing countries, even micro-insurance might not be able to adequately meet up with community needs insurance schemes are not a standalone solution and need to be accompanied by other instruments of equal importance (BfdW, 2011). Furthermore, the incentives offer by an insurance scheme can exacerbated farmer. Though insurance is a measure of protection in the event of an unforeseeable disaster, it can create disincentives for farmers to innovate and protect themselves through coping strategies that are better suited to withstand the test of time and reoccurrence. In other words, take the case of a farmer who is assure of payments due to their insurance mechanism, that insurance might be incentivize the farmer to invest in salineor drought- resistance crops or adopt modern technology of irrigation system, because the assurance of livelihoods being payout. It supplies short-term protection, but failures to encourage long-term resilience. Moreover, one of the fundamental rules of the insurance industry is that any risk must be unforeseeable. In many cases, as the evidence of attribution and climate science evolve, the long terms impact of climate are becoming more and more apparent, rendered the business case of insurance inappropriate as premieres for farmers would be too high based on the assurance that an event taking place. One commonly supported transfer stipulation in the developing context is third party payment. By transferring the risk, through farmer-based premiere payment, the system does not create accountability within the climate emissions and contributions dilemma. Instead, it only transfers the risks, and the associated cost of L&D, back onto the farming individuals who contributed the least, but are the most exposed and vulnerable to climatic shifts.
If considering the additional complications of establishing a claims system, the reality of implementation of third party payment system becomes more challenging as linear attribution or cause-and-effect, of a single event (especially extreme events) cannot be firmly established with a guarantee of certainty. Bangladesh is ranked as 76th in the world with share of 0.02% of the world insurance market. Though the insurance industries in the country have been following a stable growth rate (around 10%) but the insurance penetration was only 0.9%. The per capita spending on insurance is reported as USD 2.6. Currently a total of 77 insurance companies (non-life 46 & life 31) operating in the country and all the insurance companies are regulated by Insurance Development & Regulatory Authority Bangladesh (IDRA 2016). The government of Bangladesh approved National Insurance Policy in 2014 which acknowledged the benefit of having insurance schemes for natural disasters (National Insurance Policy 2014). A study commissioned by Climate Change Cell reported that Sadharan Bima Corporation (SBC) has initiated crop insurance several times since 1981 but incurred losses over 500%. Unfortunately, Crop Insurance is not functionally viable directly anywhere in the world and even in the industrial countries, it functions as a public welfare (DoE 2008). Later in 2013, for the first time, A meso level catastrophic flood insurance scheme was initiated by Oxfam GB in association with Pragati Insurance limited as a pilot basis in some of the selected villages of Sirajganj district under the umbrella of "Index based flood insurance". Under this scheme, if water levels cross a certain locally-determined threshold and stay for 11 days, a household will get 2,800 taka (US$36); if floods stay for 21 days, the household receives 4,400 taka ($56); and at 26 days, 8,000 taka ($103) (Oxfam GB 2013). Approaches to specifically target L&D from slow onset problems: Slow onset climatic processes do not have an immediate impact but the gradual process will be permanent and transcend borders and boundaries. The varying approaches include: Resource Management; Awareness & Capacity Building ; Research, Development & Innovation; Lands Use Planning and Agriculture Practice Efficiency; Contingency Planning; Regional, Trans-boundary -Diplomatic relations; Policy and Regulatory Framework; Information and Data exchange; Early Warning Indicators; Infrastructure Investment; Planned Migration & Population Settlement; Threshold Setting & Monitoring; Economic & Financial Tools; Weather & Climate modeling ; Economic & Livelihood Diversification; Institutional Coordination. Recommendation Overall disaster management mechanism (pre, during and post) needs to consider future climate trajectory and adjust accordingly that can include addressing loss and damage mechanism. Risk transfer approaches like micro insurance can play an important role, however, programs and policies need to be tailored to safeguard the poor and the vulnerable. It is important that insurance / re-insurance is done with the Government of Bangladesh where implementation should be done through national safety net programmes. Microfinance programs could be more successful for addressing loss and damage from climate change through flexible repayment terms that allowed clients to temporary suspend during drought, floods or in the onset of other events. Approaches for Addressing Loss & Damage
Approaches for Addressing Loss & Damage Risk reduction efforts should be strengthened. People do not want to experience Loss and Damage therefore preventing any Loss and Damage must be the primary principle. The data collection forms of the government (D from and SOS form) lacks information such as social or cultural loss. Additionally these also do not include gender segregated data in different age groups. To address climate induced Loss and Damage, a comprehensive database in imperative. Linking with the database, a pre assessment mechanism is also recommended (can also be linked with index based insurance) The institutions at sub national level are also not equipped with resources (human and finance) to deal with frequent disasters or even a large scale single event. A work programme must be taken to build that capacity at all level of local government. Investment is required to enhance local capacity take preparedness and address Loss and Damage locally using local resource. Disclaimer: Responsibility for the content solely lies with the authors. The views expressed in this paper do not necessarily reflect the views of the organization. Reference Pervin M (2013) Mainstreaming climate change resilience into development planning in Bangladesh. Climate Change: Country Report. Centre for Research on the Epidemiology of Disasters CRED. EM-DAT: The International Disaster Database. M. A. Awal ( 2013), Social Safety Net, Disaster Risk Management and Climate Change Adaptation: Examining Their Integration Potential in Bangladesh, CDMP II, Building resilient future: Bangladesh reducing disaster risks in climate change World Bank (2011), Natural Disasters: What is the Role for Social Safety Nets? Hassan R. Islam M. S. Saifullah A. S. M. & Islam M. (2013), Effectiveness of Social Safety Net Programs on Community Resilience to Hazard Vulnerable Population in Bangladesh GoB (2014), National Social Protection Strategy (NSPS) of Bangladesh Khatun, F., Rahman, M., & Bhattacharya, D. FISH- ERIES SUBSIDIES IN AN LDC: EXPERIENCE OF BANGLADESH DoE (2008), Crop Insurance as a Risk Management Strategy in Bangladesh, Climate Change Cell, Department of Environment, GoB The writers Tanjir Hossain & Habib Torikul work with Christian Commission for Development in Bangladesh (CCDB) and can be reached at tanjirho@gmail.com and torikku0516@gmail.com
"There was no sign of rain. When I was child, there used to be more rains compared to now and even more ground water, as days passed temperature increasing, rains getting very low and now even we can t get ground water also. Half the money that I have to pay the Mahajan is also pending on my head. Again this year there ll be no paddy to sell." Photo Habib Torikul