National

Mechanism on Loss
and Damage in
Bangladesh
Scoping Paper

Developed by ActionAid Bangladesh, CARE Bangladesh, the International

Centre for Climate Change and Development and Nature Conservation
Management.
29 October 2016

Authors:
Saleemul Huq, Farah Kabir, S.M. Munjurul Hannan Khan, M.
Hafijul Islam Khan, Tanjir Hossain, Jesmin B Hossain, Laura
Pasternak, Naznin Nasir, Tahmina Hadi, Shaila Mahmud, Yousuf
Mahid

Summary for the Policy Makers

This technical report explores an appropriate national mechanism for
addressing loss and damage associated with climate change impacts, with
effective institutional arrangements in Bangladesh. Initially, it identifies and
assesses the scope, gaps, and constraints of existing legislative and
institutional frameworks, policies and practices relevant to loss and damage.
It also examines the financial mechanisms which exist in Bangladesh and at
the global level to support activities related to loss and damage. Based on
such review, assessment and due consultations with relevant stakeholders at
local and national levels; this scoping report identifies the limitations of
existing mechanisms relevant to loss and damage and suggests the
establishment of a National Mechanism for Loss and Damage in
Bangladesh. This study suggests the formation of a National Steering
Committee under the National Mechanism for Loss and Damage, which can
be formed consisting of the highest policy makers and relevant experts. This
Steering Committee can provide oversight and guidance to a Technical
Working Group, which will be formed consisting of relevant sectoral experts.
The Technical Working Group can develop and implement work plans which
can be subject to approval and monitoring by the National Steering
Committee. The overall functions and activities of the National Mechanism
can be, inter alia, to develop:

A framework for enhancing understanding and knowledge

related to climate impacts, vulnerabilities and loss and damage;
The tools and methodologies for comprehensive risk
assessment;
Nationally appropriate approaches of comprehensive risk
management, including risk reduction, risk retention and risk
transfer etc.;
The approaches for addressing residual loss and damage,
including permanent and irreversible loss and damage;
A framework for developing early warning systems and
emergency preparedness;
Financial instruments to facilitate works related to loss and
damage and pay compensation;
2

Nationally appropriate technologies and to facilitate access to

global technologies;
A capacity building framework;
A framework for enhancing the resilience of communities,
livelihoods and ecosystems;
Nationally appropriate specific approaches to address loss and
damage associated with slow onset events;
Nationally appropriate specific approaches to address noneconomic loss and damage;
A clearing house for data and information;
A framework for facilitating research and study on loss and
damage;
Policies, plans, legislations and institutions for migration and
displacement and to collaborate with regional and international
efforts;
Sectoral policies, plans, legislations and institutions to
mainstream loss and damage;
Specific national policy and legislation for loss and damage;
A collaborative framework between the National Mechanism and
the WIM.

However, to structure and design such a National Mechanism, further

comprehensive study involving the relevant experts is suggested in this scoping
paper. As to immediate action, a technical committee can be formed to outline
the proposed study plan and to provide political and technical guidance to
implement this in order to structure and design the National Mechanism for Loss
and Damage in Bangladesh.

Contents
Page numbers

Summary for the Policy Makers

2

Abbreviations
6

1.

Introduction
8

2.

Background and context of loss and damage

9
2.1.
9

United Nations Framework Convention on Climate Change

2.1.1. The Paris Agreement

11
2.2.

Bangladesh

13

2.2.1. Current climatic hazard scenario

14

2.2.2. Rapid onset events

15

2.2.3. Slow onset events

16

3.
Existing legal and institutional mechanisms relevant to loss
and damage
18
3.1.

Environment related legislation and institutional arrangements

18

3.2. Disaster management related legislation and institutional

arrangements
19
3.3. Climate change related legislation, policies and institutional
arrangements
21
3.4.

Gaps in existing institutional arrangements and technical capacity

to address loss and damage
23
3.4.1. Institutional gaps and barriers

23
3.4.2. Availability of data

25

3.4.3. Technical capacity and skills

26

4.

Financial mechanisms for loss and damage

27
4.1.
27

National financial mechanisms

4.1.1. Existing national financial mechanism

27
4.1.2. Financial resources administered by the Ministry of
Environment and 28 Forests
4.1.3. Financial resources administered by the Ministry of Disaster
Management and Relief
29
4.1.4. Case study: Care International
30
4.2.
32

5.

International financial mechanisms

Stakeholder consultations
35

6.

5.1.
35

Field level consultations

5.2.
38

National level consultation

Comprehensive risk management approaches

40
6.1.
40

Risk management approaches

6.2.
40

Risk reduction

6.3.
40

Risk retention

6.4.

Risk transfer

41

6.5. Approaches to addressing loss and damage associated with slow

onset events43
6.6

Approaches to dealing with non-economic loss and damage

44
5

6.7

7.

Approaches to dealing with migration and displacement

45

Exploring potential national framework for loss and damage

46
7.1.

Gaps and scope in existing mechanisms

46

7.2.

National Mechanism on Loss and Damage in Bangladesh

47

7.3.

Specific Terms of Reference (ToRs) of National Steering Committee

50

and

Technical Working Group

8.

Concluding remarks
50

References
51Abbreviations

Alliance of Small Island States

AOSIS

Bangladesh Centre for Advanced Studies

BCAS

Bangladesh Climate Change Resilience Fund

BCCRF

Bangladesh Climate Change Strategy and Action Plan

BCCSAP

Bangladesh Climate Change Trust Fund

BCCTF

Bangladesh Environment Conservation Act 1995

ECA

Bangladeshi Taka

BDT

Center for Environmental and Geographic Information Services

CEGIS

Climate Change Adaptation

CCA

Climate Change Trust Fund Act 2010

CCTFA

Climate Change Unit

CCU

Comprehensive Disaster Management Programme

CDMP

Conference of the Parties

COP

Department of Environment

DoE

Disaster Management Act 2012

DMA

Disaster risk reduction

DRR

Executive Committee of the WIM

ExCom of the WIM

Food For Work

FFW

Forest Department

FD

Government of Bangladesh

GOB

Green Climate Fund

GCF

Greenhouse Gas

GHG

Gross Domestic Product

GDP

Insurance Development and Regulatory Authority Bangladesh IDRA

Intergovernmental Negotiating Committee
7

INC

Intergovernmental Panel on Climate Change

IPCC

International Centre for Climate Change and Development

ICCCAD

International Non-Governmental Organisation

INGO

International Union for Conservation of Nature

IUCN

Least Developed Countries

LDC

Local Disaster Risk Reduction Fund

LDRRF

Ministry of Disaster Management and Relief

MoDMR

Ministry of Environment and Forests

MoEF

National Adaptation Plan of Action

NAPA

National Agricultural Insurance Scheme

NAIS

Non-economic loss and damage

NELD

Non-Governmental Organisation

NGO

Small Island Developing States

SIDS

South Asian Cooperation for Environmental Programme

SACEP

Standing Order on Disaster Management

SODM

Subsidiary Body for Implementation

SBI

Subsidiary Body of Scientific Technological Advice

SABSTA

Terms of Reference

ToR

United Nations Development Programme

UNDP

United Nations Framework Convention on Climate Change

UNFCCC

United States Dollars

USD

Vulnerable Group Development

VGD

Vulnerable Group Feeding

VGF

Warsaw International Mechanism (for Loss and Damage)

WIM

1.

Introduction

This scoping paper is a collaborative effort of ActionAid Bangladesh, CARE

Bangladesh, the International Centre for Climate Change and Development and
Nature Conservation Management. It showcases work done to explore the
potential frameworks for a National Mechanism on Loss and Damage in
Bangladesh. It contextualises the loss and damage discussion first in the United
Nations Framework for Climate Change (UNFCCC) setting, as well as in the
national Bangladesh context. It then reviews the existing institutional, legislative,
policy, financial and risk management mechanisms in Bangladesh, highlighting
gaps as well as the scope for future development, informed by good practice and
both international and local research. The study is strongly informed by the field,
as four district consultations took place with government officials in Bangladesh,
where the National Mechanism was discussed. This paper ultimately sets out
various approaches to addressing loss and damage in Bangladesh and identifies
the initial structure, functions and activities of the potential National Mechanism
on Loss and Damage.
The initiative for exploring an appropriate national mechanism for addressing
loss and damage associated with climate change impacts, with effective
institutional arrangements, began with identifying the scope, gaps, and
constraints of existing legislative and institutional frameworks, policies and
practices relevant to loss and damage. The existing financial mechanisms in
Bangladesh and at the global level to support activities related to loss and
damage were then assessed. Thereafter, and based on such review, assessment
and due consultations with relevant stakeholders at local and national level
provided some policy guidance for establishing a national mechanism for loss
and damage in Bangladesh. The findings of these consultations are reflected in
this report. Therefore, this report takes a four-step methodology for exploring the
appropriate national mechanism for loss and damage, as follows:
1) Assessing the existing legislative and institutional frameworks
including financial tools, policies and practices relevant to loss
and damage;
2) Identification of the policy gaps and scope;
3) Stakeholder consultations; and
4) Provision of policy guidance for establishing a national
mechanism.

2.

Background and context of loss and damage

2.1. United Nations Framework Convention on Climate Change

Loss and damage resulting from the adverse impacts of climate change is now a
reality. In the absence of adequate efforts of mitigation and adaptation, effects of
climate change are causing harm to the lives and livelihoods of millions of people
all over the world and inflicting significant economic and non-economic loss and
damage (NELD), particularly in developing countries (Khan, H. I., 2015). This loss
and damage has imposed additional challenges for the global community to
institute appropriate mechanisms at national, regional and international levelsto deal with loss and damage related to life and livelihood, property,
environment and ecology, values, culture, heritage, territory and so on (Khan, H.
I., 2013).
In the early years, the Parties to the United Nations Framework Convention on
Climate Change (UNFCCC) concentrated on programmes and policies aimed at
cutting down greenhouse gas emissions, commonly known as mitigation. By the
mid-2000s, it became evident that mitigation was necessary but insufficient to
tackle the harmful impacts of anthropogenic climate change completely. This
paved the way to considering adaptation as another tool to address the impacts
of climate change. Adaptation was eventually defined, by the UNFCCC (UNFCCC,
Focus: Adaptation), as an effort to moderate the potential damage from climate
change, or even to leverage potential benefits.
During the last decade there was also increasing recognition that even full
support of mitigation and adaptation programmes is unlikely to be enough to
avert the serious adverse impacts in many of the worlds most climatically
vulnerable states (Intergovernmental Panel for Climate Change, 2014). This
acknowledgment gave birth to the concept of loss and damage, referring to the
circumstances in which the adverse effects could not be completely avoided
through mitigation and adaptation. In the context of UNFCCC, loss and damage is
the actual and/or potential manifestation of impacts associated with climate
change in developing countries that negatively affect human and natural
systems (UNFCCC, November 2012).
Concern over the potential loss and damage from climate change impacts
predates the formation of the UNFCCC (E. Roberts and S. Huq, 2015). In 1991,
Vanuatu submitted a proposal to the Intergovernmental Negotiating Committee
(INC) on behalf of the Alliance of Small Island States (AOSIS) in which it proposed
the establishment of both an international fund to support measures to address
the impacts of climate change as well as an insurance pool to provide insurance
against sea level rise (INC, 1991). The proposal suggested that the revenue for
10

the insurance pool should come from mandatory contributions from developed
countries, and that the resources should be used to compensate small island
states along with low lying developing countries for loss and damage resulting
from the consequences of sea level rise (Ibid., 2). However, neither the idea of
an insurance pool or the suggested risk financing from the developed countries
were included in the UNFCCC.
It was not until 2007, when the Bali Action Plan called for action on disaster risk
reduction strategies and other means to address loss and damage in particularly
vulnerable countries, that the term loss and damage was coined and the issue
firmly entered the UNFCCC negotiation agenda (Conway, 2015). Earlier the same
year, the publication of Fourth Assessment Report of the Intergovernmental
Panel on Climate Change (IPCC), clearly pointed out that the historic greenhouse
gas emissions had already made a certain amount of loss and damage
unavoidable (IPCC, 2007, 736).
Under the Bali Action Plan, loss and damage was considered as a part of the
adaptation pillar, and was understood to comprise facilitative approaches,
including disaster risk reduction (DRR) strategies and risk transfer and
management tools such as insurance (Conway, 2015).
The momentum on loss and damage gathered in Bali continued through to
Cancun, culminating in a decision at the Conference of the Parties (COP) 16 in
2010, which established a work programme to consider approaches to address
loss and damage in developing countries particularly vulnerable to the impacts
of climate change (UNFCCC, 2011a).
It was only after two years in 2012, at COP 18 in Doha, where Parties decided to
outline a more definite scope for loss and damage, establishing three focus areas
for the UNFCCC:
1) Enhancing knowledge and understanding of comprehensive risk
management approaches;
2) Strengthening dialogue, coordination, coherence and synergies among
relevant stakeholders;
3) Enhancing action and support on loss and damage, including finance,
technology and capacity building (Conway, 2015).
The international arena therefore recognises that the conceptualisation and
identification of the nature of the loss and damage associated with climate
change impacts is a further challenge, and a prerequisite for ascertaining
appropriate approaches to address such loss and damage. Furthermore, to
satisfy these steps, institutional arrangements are required, which need to be
employed under appropriate legal and policy frameworks. The two-year Loss and
Damage Work Programme established under the UNFCCC in 2010 (COP 16
Decision, para. 26) explored the different tools and methodologies to assess loss
and damage and approaches and mechanisms to address it.
The outcomes of the activities of this Work Programme influenced the Parties of
the UNFCCC to establish the Warsaw International Mechanism (WIM) for Loss and
11

Damage. Established under the Cancun Adaptation Framework at the 19th

Conference of the Parties (COP 19) to the UNFCCC in 2013, it deals with loss and
damage associated with climate change in a comprehensive, integrated, and
coherent manner under the guidance of the Convention (COP 19 Decision).
However, this mechanism is subject to review of its structure, mandate and
effectiveness by COP 22 and based on the resulting outcomes an appropriate
decision will be taken by the Parties to the Convention (Ibid., paras. 1 and 15).
The Executive Committee of the WIM (ExCom of the WIM) was suggested to be
established at COP 20 in order to guide the implementation of functions
identified in paragraph (para.) 5 of the COP 18 decision under the guidance of
and accountable to the COP. The ExCom is requested to report annually to the
COP through the Subsidiary Body of Scientific Technological Advice (SABSTA) and
the Subsidiary Body for Implementation (SBI), and is also requested to make
recommendations as appropriate (Ibid., para. 3). COP 19 held in 2013 initially
established an interim ExCom of the WIM and it developed a two-year workplan
in line with its functions outlined in para. 5 of the Doha Decision taking into
account the issues outlined in Decision 3/CP.18, paras. 6 and 7, and approved by
COP 20.
The permanent ExCom of the WIM is composed of 20 members- 10 members
from Parties included in Annex I to the Convention (Annex I Parties) and 10
members from Parties not included in Annex I to the Convention (non-Annex I
Parties) (see Membership of the ExCom of the WIM for Loss and Damage). At COP
21 it was mandated to initially implement the two-year workplan, to develop a
five-year rolling workplan (as part of the two-year workplan) on nine identified
priority areas and to initiate work related to the establishment of a clearing
house for risk transfer and a task force for displacement (COP 21 Decision, para.
51).
Moreover, the ExCom of the WIM is currently developing Terms of Reference (ToR)
for a technical expert group to provide technical support and guidance on
comprehensive risk management and transformational approaches. The ExCom
of the WIM already established the Expert Group on NELD with a view to develop
inputs and recommendations to enhance data on and knowledge of reducing the
risk of and addressing NELD, including how to factor these into the planning and
elaboration of measures to address loss and damage. The first meeting of this
Expert Group took place on 15- 16 September 2016 in Bonn, Germany (see
Summary of Proceedings, 18-19). So, based on the activities of the ExCom of the
WIM, and the mandates of the COP decisions and the Paris Agreement, Parties to
the Convention will make further decisions in COP 22 which will be held in
Marrakech, Morocco in November 2016.
This overview of loss and damage under the UNFCCC framework exemplifies how
although it emerged early as a concept, it was not incorporated in the climate
negotiation agenda until relatively recently. Nevertheless, it has been gaining
prominence ever since.

12

2.1.1.

The Paris Agreement

The Paris Agreement achieved at COP 21 was a historical milestone for loss and
damage negotiations as Parties reached a consensus to incorporate loss and
damage as a separate and the third pillar of the climate regime, and also to
extend the WIM beyond 2016. However, the specific proposals to introduce a
financial mechanism to compensate for loss and damage did not survive the final
round of the negotiations.
The Paris Agreement incorporated loss and damage in a standalone article and
hence Article (Art.) 8 of the Paris Agreement provides a legal basis for long-term
action on loss and damage beyond adaptation. The Paris Agreement anchors the
WIM for loss and damage and also demonstrated commitment to understanding,
action and support including through the WIM, as appropriate on a
cooperative and facilitative basis with respect to loss and damage associated
with the adverse effects of climate change.

13

Article 8 of the Paris Agreement

Recognised the importance of averting, minimising and

addressing loss and damage associated with the adverse effects
of climate change (Art. 8.1).
Anchored the WIM for Loss and Damage associated with climate
change impacts in the agreement (Art. 8.1).
Agreed to enhance understanding, action and support, including
through the WIM, as appropriate, on a cooperative and
facilitative basis with respect to loss and damage associated
with the adverse effects of climate change (Art. 8.3).
Agreed on the areas of cooperation and facilitation to enhance
understanding, action and support which may include (Art. 8.4):
(a) Early warning systems;
(b) Emergency preparedness;
(c) Slow onset events;
(d) Events that may involve irreversible and permanent loss
and damage;
(e) Comprehensive risk assessment and management;
(f) Risk insurance facilities, climate risk pooling and other
insurance solutions;
(g) Non-economic losses;
(h) Resilience of communities, livelihoods and ecosystems.

Parties to the Convention agreed to the continuation of the WIM, following the
review in 2016 at COP 22 (COP 21 Decision, para. 48). They also mandated to
the Excom of the WIM to establish a clearinghouse for risk transfer that serves as
a repository for information on insurance and risk transfer, in order to facilitate
the efforts of Parties to develop and implement comprehensive risk management
strategies. The WIM was also mandated to develop a task force to complement,
draw upon the work of and involve, as appropriate, existing bodies and expert
groups under the Convention. These include the Adaptation Committee and the
Least Developed Countries (LDC) Expert Group, as well as relevant organisations
and expert bodies outside of the Convention, to develop recommendations for
integrated approaches to avert, minimise and address displacement related to
the adverse impacts of climate change (Ibid., paras. 49-50). The Excom of the
WIM has been working from its third meeting onwards to operationalise the
aforementioned provisions. Moreover, the COP 21 decision clarifies that the
inclusion of loss and damage in the Paris Agreement does not provide any basis
for liability or compensation (Ibid., para. 52).

14

2.2. Bangladesh
Bangladesh, commonly known to the world as
one of the most climate-vulnerable countries,
often makes the international media headlines
for experiencing natural disasters causing loss
of life, damage to infrastructure and economic
assets and impacting lives and livelihoods. The
country is often exposed to environmental
hazards like floods, river erosion, cyclones and
droughts. Community risk and vulnerability
increases manifold as the country also
experiences adverse environmental impacts
such as deforestation, soil degradation,
erosion, and salinisation. This is exacerbated
by the prevalent social vulnerability caused by
extreme poverty and high population density,
indicated by the mere presence of social safety
nets (Akter, 2012). Regardless of the fact that
the country has achieved a lower middle
income country status, still nearly 32 percent
of its people live below the poverty line (MoEF,
2009), and climate change stands to impede
development.
Climate
change
will
likely
undermine
sustainable development, poverty eradication
and equity initiatives in Bangladesh. The
countrys agriculture and food production will
be severely impacted by rising temperature
(Wassmann et al., 2009). A recent study
estimated that climate change will cause a
reduction of long-term rice production by an
average of 7.4 percent each year for the period
of 2005-2050 which will lead to about United
States Dollars (USD) 26 billion in lost
agricultural gross domestic product (GDP) over
that period (Yu et al., 2010). It was also noted
that Bangladesh will lose in total about USD
121 billion or 5 percent of national GDP during
the period 2005-2050 due to climatic
variability (Ibid.).
As stated by the Bangladesh Climate Change
Strategy and Action Plan (BCCSAP), population
in many parts of the country will be so
adversely affected by climate change that they
will have to migrate permanently (MoEF
15

Figure A: Bangladesh
at a glance
Area: The total land area is
147,570 square kilometres.
Population:
Bangladesh
has a population of around
162.9 million (2016) (UNDP,
2016). It has an average
annual population growth
rate of around 2% (4.6% in
urban
areas),
and
a
population
density
of
976(people per sq. km)
(2011).
Location:
South-Asia.
Bangladesh is extremely
exposed to natural hazards
because of its location in the
wide Ganges delta plain, for
having a long coastline of
700 kilometres and for
sitting at less than 12
metres above sea level.
Per Capita Income : USD
1087.9;
Population Living below
Poverty Line: more than 63
million people (UNDP, 2016)
Common
Disasters

Natural

Floods / Flash Floods (Two

thirds of the country is
susceptible to flooding).
Cyclones and Storm
Surges (Southern districts
along the coast are
vulnerable to Tropical
Cyclones).
Extreme Temperature
and Drought (North-

2009). The plan estimated the potential number of people who will be displaced
in the future to be more than 20 million and recognised that resettlement will be
tough considering the huge population of Bangladesh (MoEF 2009). The
destruction of habitat together with the limited number of livelihood
opportunities will be the root causes of this massive displacement.

2.2.1.

Current climatic hazard scenario

Since 1980, over two hundred natural disasters have hit the country resulting in
the death of almost 200,000 people and economic damages of approximately
USD 17 billion (MoDMR, 2013). Although the relation between climate change
and natural hazards is not linear or direct, rather the magnitude of climatic
changes seems to be small and negligible; they can raise the frequency and
intensity of climatic hazards (floods, droughts, cyclones etc.). Current trends
depict that floods and cyclones will become more severe and will also take place
outside of their established seasons. Figure B shows the multi-hazards map of
Bangladesh.
Climate induced natural hazards in Bangladesh are broadly categorised as rapid
onset or extreme events and slow onset processes. For example, sea level rise
and salinity intrusion are categorised as slow onset events while floods, drought,
cyclones, storm surges, heat stress and other extreme hazards are rapid onset
events. It is evident that both extreme and slow onset events are causing climate
change induced loss and damage.
Figure B. Multi-Hazard Map for Bangladesh

16

2.2.2.

Rapid onset events

Floods
Two thirds of Bangladesh are less than 5 metres above sea level which makes the
country extremely vulnerable to flooding. Each year, nearly one quarter of
Bangladesh is flooded (Ahmed and Mirza, 2000) and the country experiences one
severe flood every four or five years (MoEF, 2009). Since 1954, about 21 above
normal floods have hit the country (World Bank, 2010). The north-eastern part of
Bangladesh (particularly Sunamganj, Sylhet and Netrokona districts) is extremely
vulnerable to floods and flash floods. Roughly one million people annually are
affected by floods and riverbank erosion.
In 2007, a severe flood inundated 42 percent of the total land area, affecting 14
million people and killing 1110 people (BWDB, 2007). The loss of assets was
estimated to be as much as USD 1.1 billion (Ibid.). Nonetheless, the country has
successfully managed to decrease the intensity of impacts from above normal
floods since the 1970s. Better macroeconomic management, increased
resilience, improvement in disaster management and effective flood protection
17

infrastructure are some of the reasons identified behind this success (World
Bank, 2010). A flood in 1998 flooded twice the area compared to a flood which
happened in 1974. However, the estimated loss and damage of the flood in 1998
was 4.8 percent of the GDP compared with the flood of 1974 which caused a loss
and damage of 7.5 percent of the GDP (Islam and Mechler, 2007). A number of
hydrological models have shown that the frequency of monsoon floods in
Bangladesh could nearly double with an increase in global temperature of 2C.
Sea level rise will expose an additional 14 percent of the land to floods by 2030.
Cyclones
On average, Bangladesh experiences a severe tropical cyclone every three years
(MoEF, 2009). Between 1877 and 1995, Bangladesh was hit by 154 cyclones including 43 severe cyclonic storms and 68 tropical depressions. UNDP has
identified Bangladesh as the most vulnerable country in the world to tropical
cyclones. Bangladeshs vulnerability to cyclones has been exacerbated by the
shape of the coastline along with its high population density and number of
infrastructures which are poorly built and maintained (World Bank, 2000).
Although 60 percent of the cyclonerelated deaths which occurred worldwide
between 1980 and 2000 took place in Bangladesh (Nicholls et al., 2007), the
country is being considered as a role model because of its ability to significantly
reduce the loss of lives. For example, the devastating cyclone that hit the coastal
region of Bangladesh in 1970 caused the loss of over 300,000 lives and a total
property damage of about USD 2.6 billion (GED 2015). In comparison, Cyclone
Sidr of 2007, which was stronger compared to the 1970 cyclone, caused similarly
devastating economic loss and damage (USD 1.7 billion), but human casualty
was much less, where 3,406 lives were lost (Ibid.).The relatively recent Cyclone
Mahasen in 2013 and the most recent Cyclone Roanu in 2016, although not as
severe as their predecessors, affected over 1.2 million people in the coastal
areas of Bangladesh (GED 2015, Reliefweb 2016). Figure C below lists the loss
and damage due to a single severe cyclone by sector and indicates that the total
damage from an average severe cyclone is worth 2.4 percent of the GDP. The
sectors most affected by severe cyclones are housing and agriculture.
In Bangladesh, the frequency and intensity of cyclones and storm surges in the
Bay of Bengal is predicted to increase. The IPCCs Fourth Assessment Report
indicated that cyclone activity has already increased and predicted that it would
continue to increase in coastal areas (Nicholls et al., 2007). A study by
Unnikrishnan et al., (2006) forecasted an increase in both the frequency and
magnitude of tropical cyclones in the Bay of Bengal by 2050, resulting in heavy
precipitation in the region.

18

Figure C. Damage and Losses during an average

severe cyclone (from Economics of Adaptation to
Climate Change, World Bank, 2010)
Damages and Loss
Economic Sector

(Constant 2009 Million

USD)

Housing

900

Agriculture

151

Water Resource Control

83

Education Infrastructure

73

Industry/Commerce/Tourism

56

Urban and Municipal

27

Power

15

Other

28

Total Damages and Losses

1802

Share of GDP

2.4%

2.2.3.

Slow onset events

Drought
In the last 50 years, 20 droughts occurred in Bangladesh (Ramamasy and Baas,
2007), a few of which have caused famine. In the past, severe droughts typically
affected about 47 percent of the landmass and 53 percent of the population
(Ibid.). During the first annual dry season (January to May), about 12,000 square
kilometres of cropland typically experiences drought, resulting in more than a 40
percent loss of premonsoon rice crops annually (Ramamasy and Baas, 2007).
Many estimates predict that the affected area by drought during the first annual
dry season could increase significantly under a severe climate change scenario.
On average, roughly 23,000 square kilometres of cropland are affected during
the second annual dry season (June to October) (Ibid.). Drought in northwestern
Bangladesh caused a 3.5 million tonnes reduction in rice production (Ibid.).
Climate change is likely to intensify drought as evapotranspiration is predicted to
increase considerably, especially during the postmonsoon and premonsoon
seasons (Mirza and Ahmad, 2005). Diminishing winter rainfall and overall
unpredictable rainfall patterns will increase moisture stress, especially in the
northwestern districts, and more frequent and intense droughts are likely to
occur (Huq et al., 1996). The yield of winter rice could reduce 55 to 62 percent
under a severe climate change scenario (Ibid.).

19

River bank erosion

River bank erosion is another slow onset event which has devastating and farreaching impacts on the lives of affected people. Many islands (created by
interwoven channels that form rivers), locally known as chars, are extremely
vulnerable to changes in river conditions (Sarker et al., 2003). The vulnerability
of char inhabitants is exacerbated by both a hazardous environment and
challenging socioeconomic conditions, for example extreme poverty (Ibid.). The
Ministry of Disaster Management and Relief (MoDMR) reported that, according to
World Disaster Report 2001 published by the International Federation of Red
Cross and Red Crescent Societies every year about 10,00,000 [sic] people are
affected by river erosion and 9,000 hectare cultivable lands are banished in river
[sic] (Disaster Management Bureau, 2010). While some of the affected may find
new shelters following river erosion, most of the victims become homeless for
uncertain period (Ibid.). A study conducted by the Center for Environmental and
Geographic Information Services (CEGIS) on the impact of climate change on
Bangladeshs rivers showed that a 10 percent increase in maximum discharge
for the Jamuna River would result in a 25 percent increase in river bank erosion
(CEGIS, 2010).
Sea level rise and salinity intrusion
It is evident that sea level rise is a slow onset process posing a significant threat
to Bangladesh; the mean annual water level in the southwest region is
increasing by 5.5 millimetres per year (Rahman et al., 2011). Sea level rise would
cause submergence of low-lying coastal areas and would also cause saline water
intrusion of coastal rivers into groundwater aquifers which would ultimately
reduce freshwater availability. It is predicted that sea level rise will cause
damage to the Sundarbans mangrove forest, and would cause drainage
congestion inside coastal polders, that will adversely affect agriculture and
agrarian economy and induce migration as livelihoods become no longer
available.
A study conducted by the Institute for Water Modelling and the CEGIS in 2007
showed that under the IPCCs A2 emission scenario, the sea level is predicted to
rise by 62 centimetres by 2080, which could lead to the flooding of 4,690 square
kilometres or 13 percent of the landmass of the coastal region. A study by the
Bangladesh Water Resources Planning Organization (2005) suggested that with a
sea level rise of 88 centimetres by 2100, saline water could penetrate up to 40
kilometres inland, affecting a significant part of the coastal zone. Sea level rise
also has significant implications for biodiversity. In addition, it will lead to the loss
of coastal wetlands and subsequently of the biodiversity dependent on these
ecosystems (Nishat et al., 2013).

20

3.

Existing legal and institutional mechanisms

relevant to loss and damage

The Government of Bangladesh (GoB) has achieved significant success in

reducing climatic disaster related casualties. In doing so, over time it has moved
away from the earlier concept of responding post-disaster to the more costeffective approach of pre-disaster mitigation and preparedness. Recognising the
fact that the country will suffer from significant loss and damage due to climate
change, the government has pre-emptively initiated several measures including
drafting the proposed National Mechanism on Loss and Damage.
Such an undertaking demands an assessment of the scopes, gaps and
constraints of the existing institutional arrangements and their legal mandates,
relevant to loss and damage associated with climate change. Based on such
assessment, necessary policy guidance for amendments/enactments of or within
the existing institutional arrangements can be identified. Such assessment also
provides guidance for the necessary structures and functions of the National
Mechanism for Loss and Damage to be established in Bangladesh. So, this
section of the technical report will identify and review the institutional and legal
frameworks related to environment, disaster management and climate change in
Bangladesh.

3.1. Environment related legislation and institutional

arrangements
The Bangladesh Environment Conservation Act 1995 (hereinafter referred to as
the ECA), which is the main piece of environmental legislation, does not contain
any provisions on climate change. However, the ECA contains provisions on
environmental harm, which provides the possibility of taking into consideration
the harm caused by climate change. Section (s.) 8 states that any person
affected or likely to be affected by pollution or environmental degradation may
apply to the Director General of the Department of Environment (DoE) in the
manner prescribed by the rules to remedy the damage or apprehended damage.
S. 7 outlines the procedures to determine and provide compensation for
environmental and ecological harm including remedial measures for harm done
to ecosystems.
In particular, s. 7 (3) of the ECA, outlines the scope of environmental damage
assessment and required corrective measures including compensation, stating
that the Director General may impose duties upon any specialist and other
persons to determine compensation or to adopt corrective measures (see ss. (1)(4) of S. 7 ECA). The ECA was supplemented by the Environmental Conservation
Rules, adopted in 1997, providing detailed rules to address environmental harm.
In addition, the Environmental Court Act of 2010 established special
environmental courts to deal with environmental harm. Further, there is some
sectoral legislation regulating water, forest, agriculture, fisheries, energy,
21

industry and transport in Bangladesh, which are also very important to review
and identify their scope for addressing loss and damage resulting from climate
change related to these sectors.
The institution responsible for environmental management at national level is
primarily the Ministry of Environment and Forests (MoEF). The MoEF is
responsible for the formulation and monitoring of environmental policy and
legislation and is the controlling authority of all executing agencies like DoE,
Forest Department (FD), Bangladesh Forest Research Institute, Bangladesh
Forest Industries Development Corporation and Institute of Forestry and
Environmental Sciences. Furthermore, it coordinates other inter-ministerial (e.g.
water, industrial, transport, mining etc.) environmental issues.
The FD, under the MoEF, works as an executing agency for the protection,
control, conservation, expansion and maintenance of the national forest
resources. Its administrative and managerial units are divided according to
particular divisions, ranges and best level areas in the national forest. The
National Environmental Council is organised and chaired by the Prime Minister. It
functions through an Executive Ministerial Committee headed by the MoEF and a
Divisional Environment Committee headed by the Divisional Commissioner. The
MoEF is primarily responsible for environmental protection (SACEP, 2002). Thus,
legislative and institutional frameworks exist in Bangladesh to address loss and
damage caused by environmental injury, which provide the opportunity to also
address loss and damage associated with climate change. However, these need
to be amended to incorporate specific provisions on climate change impacts and
the associated vulnerabilities, including how to address loss and damage
resulting from climate vulnerabilities.

3.2. Disaster management related legislation and institutional

arrangements
It is understood that not every extreme weather event or hazard will lead to a
disaster. Hazards such as extreme weather events are potentially damaging
events but by themselves do not cause disasters. Instead, it is the combination
of an exposed, vulnerable and ill-prepared population or community hit by such
an event which results in disaster. This implies that the legislative and
institutional frameworks on disaster management cannot be applicable directly
as such to loss and damage resulting from climate change. Still, these
frameworks can provide examples of good practice, and disaster management
has been clearly identified as a tool to address loss and damage by the recent
decisions of the COP (COP 18 Decision, preamble and para. 6.).
This part of the technical report outlines the disaster management arrangements
in Bangladesh and describes the detailed roles and responsibilities of different
government agencies involved in DRR and emergency response management
including institutional arrangements at national and local levels.

22

The Standing Orders on Disaster Management (SODMs) outline the

responsibilities of the government vis--vis rehabilitation, resettlement and
disaster management in Bangladesh (GoB, SODMs 1973 and 2010). The latest
SODM adopted in 2010 by the Ministry of Food and Disaster Management is
influenced by the Hyogo Framework for Action. These form part of the National
Plan on Disaster Management of the GoB (GED 2015). Within the government,
the MoDMR has been assigned as the national focal point for loss and damage.
The MoDMR is mandated to drive national risk reduction reform programmes to
address the disaster management issues. The ministrys responsibility is to
reduce the risk of people, especially the poor and the disadvantaged, from the
effects of natural, environmental and human induced disasters/hazards and to
manage an efficient emergency response system.
The Disaster Management Act of Bangladesh (DMA), adopted in 2012 (DMA,
2012), marked an important shift in recognising climate change induced loss and
damage as within the ambit of the definition of disaster. It was passed to
facilitate a more coordinated, objective-driven and strong disaster management
system (GED, 2015). The DMA aims at setting up an institutional mechanism for
disaster management, reducing vulnerabilities, rehabilitation and providing
humanitarian assistance to the victims of both disasters and climate change
impacts (DMA, 2012, no English translation available yet only Bangla version
available). The Act defines disasters as phenomena including natural disasters,
manmade disasters or climate change, giving examples such as cyclones and
saline water intrusion (Ibid., s. 2[11]). The DMA contains a definition of
rehabilitation, which includes the rehabilitation of livelihood and repairing of
infrastructure. It also includes provisions for the resettlement and planned
relocation of those affected if needed after a disaster (Ibid., s. 2[15]).
The DMA also established the National Disaster Management Council to
formulate policy and strategy on disaster management and to provide and
implement guidelines on disaster management (Ibid., s. 4). In addition, it
envisaged the establishment of a Department of Disaster Management to
implement the strategies of disaster management, which replaced the Relief and
Rehabilitation Department (Ibid., s. 7 [2]). Finally, the DMA established a Disaster
Management Fund, which will operate at both national and district levels and will
be utilised to support disaster management efforts and provide humanitarian
assistance to affected people (Ibid., s. 32).
The DMA allows a person or organisation negatively affected by a disaster to sue
for compensation from a person or organisation responsible for this disaster
before a competent court in accordance with the Civil Procedure Code. The court
will determine the amount of compensation to be paid and pass the order on
accordingly (Ibid., s. 49). However, this provision needs to be elaborated and
further rules or guidelines adopted on the assessment of loss and damage,
determination of compensation and liability for related loss and damage. It
should also be linked with the aforementioned disaster management fund.
Nevertheless, the DMA is an important legal milestone to recognise loss and
damage associated with climate change as a consequence of disaster and the
23

linkage between natural and climate change induced disaster (Ibid., s. 2).
Moreover, the Act has been adopted very recently and needs to be applied in
practice through the suggested institutional arrangements.
Bangladesh, being a signatory of the Sendai Framework for Disaster Risk
Reduction, will also have to provide DRR services to its citizens and make sure
that this responsibility is shared among the local government bodies as well as
the private sector and other concerned stakeholders. Bangladesh is also a
signatory of the Agenda 2030 for the Sustainable Development Goals and the
Paris Agreement.
Figure D below provides a brief overview of the existing institutional
arrangements in accordance with the legislations and policies related to disaster
management in Bangladesh (BAL, 2014).

24

Figure D. Existing institutional arrangements for disaster management in Bangladesh

3.3. Climate change related legislation, policies and institutional

arrangements
Bangladesh prepared a National Adaptation Plan of Action (NAPA) in 2005 (MoEF,
2005) to address the adverse impacts of climate stimuli including climate
variability and extreme events, and to promote sustainable development. The
NAPA outlined priority activities and identified 15 important project ideas. The
NAPA process has been advanced through the adoption of the BCCSAP of 2008
(reviewed in 2009), which provides the climatic context, taking into account
socio-economic realities, and outlines policies and programmes based on broad
areas of intervention (MoEF, 2009). The BCCSAP was formulated was formulated
to streamline the activities to combat climate change. It identifies 44
programmes based on the following six pillars:
1) Food security, social security and health;
2) Disaster management;
3) Infrastructure;
25

4) Research and knowledge management;

5) Reducing greenhouse gas emissions and a conversion to low-carbondevelopment;
6) Capacity development.
Loss and damage is covered in the BCCSAP, under different programmes. For
example, the Strategy proposes responses necessary for livelihood protection in
ecologically fragile areas and the protection of livelihoods of vulnerable socioeconomic groups in order to ensure equitable and sustainable development. In
some cases, the activities are aimed at providing protection for the loss of
employment, income and property from various sources to persons, households,
and enterprises through devising an effective insurance system by the
government. In addition, the BCCSAP recognises the need to protect displaced
people and provide support for their rehabilitation in a new environment through
capacity building. In line with the attempts to define loss and damage, it could
therefore be said that the BCCSAP already includes loss and damage in its scope
to some extent, in addition to its emphasis on adaptation (Faruque, Dr. A. A. and
Khan, H. I., 2013).
The BCCSAP 2009 proposed an institutional framework for implementation
strategies and actions as an integral part of national development policies, plans
and programmes including strengthening existing institutions. In addition, the
Climate Change Unit (CCU) was established under the MoEF. The MoEF remains
the national focal point with regards to climate change. The CCU facilitates the
implementation of the BCCSAP under the overall guidance of the National
Environment Committee chaired by the Prime Minister and the National Steering
Committee on Climate Change headed by the Minister of the MoEF. The BCCSAP
also highlighted the need for cooperation across sectors by identifying the need
for climate change focal points in all relevant ministries (Shamsuddoha, Roberts,
E., Hasemann, M., and Roddick, S., 2012, 20). The GoB also established the
financial entities to provide financial support to implement climate change
related activities, plans and projects.
The GoB has invested a large amount of funds and deployed institutions to offer
protection measures, early warning systems, during and post-hazards relief and
recovery over the past four decades. Climate change and DRR have also been
highlighted in the seventh Five Year Plan (FYP) and the Outline Perspective PlanVision 2021 of the GoB which were prepared by the General Economics Division
of the Planning Commission. Although, major catastrophic changes in the climate
system are not expected within the 7th FYP period (2016-2021), the plan
recognises that the cumulative effect of small changes would still make the
country more susceptible to high intensity hazards which warrant planned
approaches towards reducing hazard related risks (Ahmed et al., 2015). Both the
7th FYP and the Vision 2021 highlighted the need for capacity building on both
DRR and climate change adaptation (CCA).

26

3.4. Gaps in existing institutional arrangements and technical

capacity to address loss and damage
Some of the greatest loss and damage is expected to be caused by slow onset
disasters (Siegele, 2012). Minimising loss and damage incurred from slow onset
disasters would primarily require a good understanding of the climatic events
and patterns and implementation of long-term expensive projects. Limited
financial resources often hinder attempts to implement climate change actions to
counter loss and damage generated from slow onset disasters. Currently, there
have not been any policies and institutions developed to exclusively counter said
challenges effectively. The existing policies and institutions developed aim at
addressing CCA, disaster management and DRR.
At the national level, the policymakers would need to implement actions at
multiple levels which include developing and implementing comprehensive risk
management frameworks (i.e. risk reduction, risk transfer and risk retention),
ensuring sustainable development and implementing mitigation and adaptation
measures (Nishat et al., 2013). Developing comprehensive risk management
frameworks would require identifying the risk (i.e. potential, avoidable and
unavoidable risk); countering the risk; mitigating or minimising the risk; and
monitoring, evaluating and reviewing the risks. It is important to note that the
extent of vulnerabilities and risks will vary in accordance with the social, cultural,
economic and environmental aspects of the communities. Limited information
exists on how the existing institutional arrangement will collect, evaluate,
monitor and analyse the data or information to respond to the impacts of climate
change induced loss and damage. Existing entities and institutions lack
capacities, skilled and adequate personnel to effectively implement climate
change related projects. For example, Transparency International Bangladesh has
expressed concerns over inadequate capacity in the Bangladesh Climate Change
Trust Funds Secretariat. Present understaffing hinders the units efforts to
effectively run the current projects of the 139 government and 63 NGOs (NonGovernmental Organisations)/think tanks along with other internationally
financed projects (Khan et al., 2013).
Therefore, limited financial resources to invest in climate change projects,
existing weak institutional structures, corruption and a lack of coordination
among the relevant ministries and financial entities are the primary limiting
factors which hinder attempts to ensure effective responses to address climate
change induced loss and damage. To effectively address this issue would require
the availability of adequate and accurate data to identify climate risks, potential
hazards and vulnerability; overcoming institutional barriers; and a better
understanding of technology.

3.4.1.

Institutional gaps and barriers

A significant level of effort has been employed in addressing climate change,

however, Bangladesh faces challenges to effectively implement climate actions
27

primarily due to lack of coordination among the relevant ministries, corruption,

inadequate financial resources and institutional capacity. In the past, attempts
have been undertaken to minimise the loss and damage in the form of cyclone
preparedness and relief distributions. However, cases of corruption, in the form
of disproportionate distribution of food aid and relief, have been detected during
the post-disaster interventions including after Cyclone Aila (Mahmud and Prowse,
2012). In addition, the climate fund which has been channelled to finance the
construction of the cyclone shelters has been drawn off illegally by the local
contractors, leaving the construction of the cyclone shelters unfinished and
inadequate (Khan et al., 2013).
The GoB discloses some of the information regarding climate finance which
includes the number of climate financed projects, the amount of climate funds
received by the state and non-state actors, and summaries of selected projects
from the Bangladesh Climate Change Trust Fund and the Bangladesh Climate
Change Resilience Fund. However, other information pertaining to the processes
of decision making, roles performed by distinct actors, and reports on project
evaluation and audits are not being disclosed. Furthermore, weak coordination
among the existing funding bodies initiates corruptive activities, and hence leads
to ineffective implementation of projects. For example, it has been claimed that
some projects, which were rejected by the Resilience Fund due to poor project
documentation, have been approved by Trust Fund due to political interference
(Khan et al., 2013).
There is no clear and transparent management mechanism for climate
adaptation funding. Such incidents of corruption and lack of transparency and
accountability widen the economic, social and environmental loss and damage
incurred due to climate change induced disasters. Existing monitoring and
central management mechanisms are too underdeveloped to be able to stop
corruption in the provision of climate change finance, resulting in the
mismanagement of climate finance and ineffective implementation of climate
change projects and policies.
Therefore, appropriate mechanisms need to be developed to minimise corruptive
activities pertaining to allocation of climate finance to implement climate change
projects. It is important to establish an independent or centralised system which
would manage and supervise the activities of the concerned ministries and
institutions in order to ensure collaboration, coordination, promote technical
managerial skills and counter corruption.
Combined approaches would address the loss and damage generated from the
impacts of climate change. Combined approaches include the integration of CCA,
mitigation, loss and damage issues into existing policies and projects. For
example, The Bangladeshs National Disaster Management Plan (2010) is
incorporating DRR and CCA with the intention of establishing an integrated
approach to counter disaster risk by taking the impacts of climate change into
consideration (Nishat et al., 2013). Implementation of combined approaches can
only be materialised provided the existing institutions coordinate among each
28

other, share information, knowledge and relevant data. However, absence of

technical managerial skills will hinder efforts to effectively conduct research on
measuring, calculating and verifying the loss and damage from the impacts of
climate change. Technical managerial skills include implementing and
formulating the policies, strategies and relevant projects which would facilitate
scientific management and problem-solving.
It is also important to mention that the institutional mechanisms to facilitate
technology transfers and climate finance are inappropriate. Technical and human
resource capacities are vital to effectively address climate change induced loss
and damage (Ibid.). Currently, there is a lack of financial resources and adequate
human resources and capacities to counter loss and damage. As a result, the
policies and projects are not being implemented to counter the said issues due to
a lack of knowledge, technology, appropriate institutional mechanisms and
skilled personnel. An aforementioned independent body or centralised system
should be developed to hire and train government officials to conduct research,
formulate appropriate policies, strategies and projects to address these issues.
Alternatively, the private sectors could also be involved in working towards lowemission and climate resilient developments through establishing training
programmes and providing adequate financial resources. Private sectors are
more innovative and technologically advanced than the public sectors and hence
have the ability to undertake effective adaptation and mitigation actions
provided adequate funds are being allocated. Engaging the private sectors
through providing readiness and preparatory activities would facilitate the
developing countries to effectively gain access and mobilise resources from the
Green Climate Fund (GCF). Effective implementation of internationally
transferred mitigation outcomes would help the nations to buy carbon credits to
offset their carbon dioxide emissions. Bangladesh can enhance the existing
sinks, reservoirs and removals to reduce the carbon dioxide emissions and
therefore can benefit from such a mechanism.
Alternatively, Bangladesh, with international support, can also reduce
greenhouse gas (GHG) emissions and sell the surplus carbon credits to the
countries with low carbon units. The private sectors could be involved by taking
the lead in operating and managing the mechanisms and conducting research on
addressing loss and damage from the impacts of climate change. However, there
is currently no independent body or programme to train the private sectors to be
involved in climate change induced loss and damage.

3.4.2.

Availability of data

Access to reliable, verifiable, consistent and relevant data is a significant factor

which would facilitate capacity building. In developing countries, data is often
inadequate and unreliable (Surminski et al., 2012). This could be attributed to
the fact that most of the developing and LDCs lack appropriate technology and
infrastructure to generate adequate data. For example, despite being
29

consistently affected by extreme climatic events, Bangladesh has failed to

establish an extensive network of climate observatories which could provide
hydro-meteorological information to the planners working on disaster
management, water resources planning for agriculture and other important
sectors. The hydrometric parameters relating to climate change which include
sea level rise and temperature rise in the urban areas are yet to be properly
monitored (Nishat, 2011).
In addition, the existing temperature stations, within and around the urban
megacities, are not adequate and hence failing to address the impacts of
urbanisation due to the precipitation and temperature aberrations. In the coastal
region, the existing tidal water level stations are unable to demonstrate the net
sea level rise on a regular basis, as those are not free from natural and human
perturbations. The air, water and temperature stations need to be extended and
well-equipped to monitor weather patterns and detect any perturbations. The
indicators to determine the quality of the environment should be cross-checked
and verified with experts. The International Union for Conservation of Nature
(IUCN) has undertaken an initiative to establish a monitoring mechanism to
detect climate variability and climate change in Bangladesh through
implementing a project entitled Enhancement of Bangladeshs Capacity to
Participate in Road to Copenhagen and Post Cohenhagen Regime. The indicators
were established through conducting a series of expert consultative sessions.
Improved and extensive environmental indicators would help to detect climatic
changes and weather patterns, formulate strategies and allocate resources
effectively (Nishat, 2011). Currently, there is inadequate climate monitoring. A
well-designed climate monitoring mechanism would help to reduce costs
associated with climate change induced loss and damage through the
identification of the actual problems and enabling the government to channel
resources effectively. Moreover, there is a lack of adequately skilled personnel to
identify, calculate and devise an appropriate strategy to counter the impacts of
climate change induced loss and damage.
It is worth noting that the data on climate change induced loss and damage,
exposure and vulnerability is equally important to climatic data and observation
infrastructure. Accessing and incorporating these various types of information is
quite challenging. In most countries, the government asset databases or
sectoral disaster loss data is unavailable or it may be limited in scope, not
capturing intangible impacts (Mechler et al., 2010). Measuring and identifying
the impacts of climate change on intangible factors such as cultural, social and
environmental factors remains an existing challenge. This can be attributed to
limited information, knowledge and methodology on how to calculate these
intangible factors. Furthermore, a lack of awareness among the development
community about the climate change implications coupled with inadequate
resources for implementation are considered an important challenge to
mainstreaming adaption and disaster risk management into policies and
programmes (Agarwala and Aalst, 2008). Appropriate mechanisms or systems
should be developed to provide data in order to calculate and identify the
climate hazards, vulnerabilities and risks.
30

3.4.3.

Technical capacity and skills

The most important aspects of technical capacity are the interpretation of data,
understanding the methodology and tools. To conduct training in analysis of data
and data generation are pivotal, in the context of climate change, socioeconomic and environmental area. A commonly referenced capacity is the
capability to extract the important aspects of information from the data provided
and disseminate and share it with the concerned stakeholders. Training and
public awareness-raising activities are often implemented to counter the lack of
technical capacity and skills, as well as providing guidance to appropriate
resources including information on best practice in implementing various
methods (Surminski et al., 2012). In Bangladesh, there is inadequate technology,
knowledge and skilled personnel to develop simulation of climate change
scenarios. Such an effort would help to identify potential risks, hazards and
vulnerabilities from the impacts of climate change. Simulation of climate change
scenarios can also help to devise appropriate and effective responses to counter
loss and damage. For example, it would help to implement effective adaptation
strategies including structural and non-structural measures.

31

4.

Financial mechanisms for loss and damage

4.1. National financial mechanisms

In order to build climate resilient communities and to help condense the effects
of climate change induced loss and damage, a greater synergy and coordination
(in terms of theory and practice) between DRR and CCA needs to be determined.
As a part of a paradigm shift in the field of Disaster Management, Bangladesh is
very much devoted to mainstream DRR and CCA in line with the national policies,
strategies and planning. Having been heavily engaged with the new emerging
issues of climate change, the GoB, particularly the two most relevant ministries,
namely the MoDMR and the MoEF, that administer the activities regarding DRR
and CCA respectively, is keeping pace with the current speed with regards to the
new and emerging issues of climate change (Huq, 2012). MoEF has been
appointed the focal ministry for climate change related activities and MoDMR is
the concerned ministry in dealing with disaster risk. The national focal point for
climate finance is the Economic Relations Division of the Ministry of Finance.

4.1.1.

Existing national financial mechanism

The impact of loss and damage generates a need for funding provision either to
compensate for loss and damage or to protect assets and livelihoods of an
individual or a community. It is being estimated that from now on the most
vulnerable countries, with an increasing rate, will need USD 50 billion each year
to deal with loss and damage (Climate Network, 2016). Bangladesh has projected
a loss of 2 percent in GDP by 2050 (MoEF, 2015) and 9 percent of GDP by the
end of this century (ADB, 2014) due to the effects of climate change. In spite of
the absence of a financial mechanism (in the name of loss and damage) in place
with a specific mandate to deal with loss and damage in the national context,
Bangladesh plays a pioneering role with regards to developing national
strategies and policies to address DRR and CCA (e.g. BCCSAP, FYP, Bangladesh
Climate Change Trust Fund, Bangladesh Climate Change Resilience Fund etc.).
Given the obvious overlapping activities of CCA, DRR and loss and damage, in
the context of Bangladesh, it will be worthwhile to consider the current
adaptation and disaster risk finance in order to develop the national financial
mechanism on loss and damage.
In response to the need to address climate change impacts, the GoB spends a
significant amount of money on an annual basis. Recent data portrays that
domestic resources contribute to about 77 percent of the overall funding of
climate change related activities and the remaining 23 percent comes from
foreign donor resources. Most of the spending (around 97 percent) is related to
CCA measures (Faruque & Khan, 2013).

32

4.1.2.
Financial resources administered by the Ministry
of Environment and Forests
Two major funds; Bangladesh Climate Change Trust Fund (BCCTF) and
Bangladesh Climate Change Resilience Fund (BCCRF), have been developed to
implement the 44 programmes of Bangladesh Climate Change Strategy and
Adaptation Plan (BCCSAP). Both the funds are administered mainly by the MoEF.
Bangladesh Climate Change Trust Fund: BCCTF was established under the
Climate Change Trust Fund Act (CCTFA), adopted by the GoB in 2010, to fund
activities related to climate change (see s. 6 CCTFA for more information). It is
financed by the national revenue budget of Bangladesh as well as donor funds
and is used for implementing short, medium, and long-term goals and actions
relating to climate change. During the last seven fiscal years (up until 2016-17),
the GoB has allocated BDT 3100 crore (approximately USD 400 million) into the
trust fund. Recently for the fiscal year 2016-2017, the GoB has made an
allocation of BDT 100 crore for the trust fund. As per the CCTFA, a fixed deposit
of 66 percent of the total allocated amount and the interest accrued on the
remaining 34 percent (the so-called reserve fund) can be allocated to the trust
fund projects (BCCT, 2016). The CCTFA does not contain any explicit provision to
address or assess loss and damage associated with climate change impacts. The
Act poses a roundabout mandate to address loss and damage as the broad
mandate of the fund is to implement the BCCSAP (Faruque & Khan, 2013).
The fund is financed from the national budget of Bangladesh as well as donor
funds and is used for implementing short, medium, and long-term goals and
actions relating to climate change. The composition of the Funds Board of
Trustees can be criticised for the fact that it is overwhelmingly dominated by
Ministers and other government officials and has no representation from civil
society. A technical committee to assist the Board is also composed of
government officials and has no civil society representatives. The technical
committee has not been given any mandate to assess loss and damage or
establish baselines for assessing it in the future.
In March 2010, the GoB issued guidelines for how NGOs can access funding from
the BCCTF. According to these guidelines, only NGOs that are duly registered and
have experience in climate change, environment protection, and livelihood
issues, as well as having adequate capacity, can apply for funding. No individual
or community is eligible to apply for the project (Bangladesh Gazette, 2010).
Projects are examined and approved by the Board of the BCCTF.
Bangladesh Climate Change Resilience Fund: BCCRF has a similar mandate
to the BCCTF as it was established to facilitate the implementation of the six
pillars identified in the BCCSAP. It was originally called the Multi-Donor Trust
Fund, in 2009, and became operational in 2010. There is no direct provision for
BCCRF to provide compensation for actual loss and damage as it funds activities,
such as for climate change projects, primarily on adaptation but also on
mitigation, being implemented by both government agencies and NGOs. In total,
90 percent of the allocated funds will be utilised for government projects and the
33

remaining 10 percent for the implementation of NGO-led projects. Although the

fund is not explicitly mandated to cover loss and damage, in carrying out
projects in line with the goals of the BCCSAP, it arguably contains an indirect
mandate to address loss and damage. That said, the BCCRF could not provide
compensation for actual loss and damage either financially or through in-kind
provisions.
The World Bank has been appointed primarily to provide fiduciary management
and technical assistance in project implementation as well as to ensure
transparency, accountability, efficiency, and effectiveness in its operations. Both
the Governing Council and the Management Committee are chaired by a
representative of the GoB and include representatives of ministries, development
partners and civil society. However, the assessment of the projects submitted to
the BCCRF is carried out according to World Bank procedures, which is often a
lengthy process.

4.1.3.
Financial resources administered by the Ministry
of Disaster Management and Relief
A key intervention, the Comprehensive Disaster Management Programme
(CDMP) that addresses the GoBs concerns of CCA and DRR to facilitate the
reform of the disaster management approach by expanding its focus to proactive
risk reduction, was coordinated by MoDMR. Under the CDMP, a fund called the
Local Disaster Risk Reduction Fund (LDRRF), accounting for 60 percent of the
overall CDMP budget, was created to provide resources and financial support to
the most vulnerable communities due to climate change stressors. In the 20132014 fiscal year, several Union Parishads received approximately USD 5.0 million
from the LDRRF for DRR works (MoDMR, 2013-2015). Although phase-II of CDMP
is over, the GoB is thinking to institutionalise the LDRRF component.
In addition to annual budget for DRR, MoDMR administers a couple of Social
Safety Net programmes such as; Food For Work (FFW), Test Relief, Bridge and
Culverts (FFW), Execution of Risk Reduction Programme, Relief and Rehabilitation
Programme, Vulnerable Group Feeding (VGF) and Vulnerable Group Development
(VGD) etc. (Department of Disaster Management, n.d.), to provide support to
disaster affected communities and individuals. In this fiscal year (2016-2017),
the GoB has allocated more than 2 percent of its overall GDP for social protection
schemes (The Daily Star, 2016).
Besides the contribution of the above mentioned two ministries, there are
several other funding mechanisms in order to cope with the impacts of natural
disaster; for example, a key contingency funding mechanism called the National
Relief Fund presently operates at national level and another window of
humanitarian assistance is the Prime Ministers Relief Fund (GoB, 2013).
Typically, the disaster management sector spends about 17.5 percent of all direct
expenditures in CCA (Ahmed et al., 2015). The GoB has regularly invested funds

34

to support its citizens during hazards and post-hazard by providing aid and relief
through budgetary allocation.

35

4.1.4.

Case study: Care International

Case study: Care International

Although it is experiential that NGO-led fund management to poor and
vulnerable communities is effective, there is yet to be established
mentionable examples. NGO involvement ensures that there is a close link to
the needs on the ground; options that are proposed for loss and damage are
appropriate to local contexts and adhere to the do no harm principle of the
humanitarian sector; gender equality and the differing needs of women and
men and vulnerable groups are considered; local accountability of funding
allocations and implementation; and it is easier to mobilise communities at
the local level. NGOs exercise globally accepted tools, (e.g. the Inter-Agency
Standing Committee), produce evidence-based information and ensure
reports are shared and agreed. A good example is the recent Joint Needs
Assessment process facilitated by CARE in Bangladesh, on which the Country
Humanitarian Response Plan was developed and executed for immediate
recovery from loss and damage. START Network, an INGOs pooled fund for
emergency response, is managed and dispersed collectively by the
International Non-Governmental Organisations (INGOs)- another laudable
example of NGO-led fund allocation and management (Start Network, Start
Fund).
CAREs global programme experience has particular lessons learnt and
resulting recommendations to design and apply financial instruments which
emphasise the needs of the most vulnerable:

A renewed focus on supporting poor and at risk populations with a

particular emphasis on women;

Understanding and response to the risk situations and perceptions of

the poor;

Adequate access to financial services, financial inclusion and financial

literacy.

CARE as an INGO has gained experience through its programming and has
some good practices to share in dealing loss and damage. Below is a case-

36

Scaling-up weather index-based insurance for small holder

farmers in India
India now administers the worlds largest weather index-based insurance
market, reaching tens of millions of farmers each year. The National
Agricultural Insurance Scheme (NAIS) is Indias major nation-wide insurance
programme which is supported through a premium subsidy. Premium
subsidies vary by insurance programme and by state, but in general the
farmer pays between 25 and 40 percent of the premium and the government
provides a subsidy for the remaining 60 to 75 percent.
In states or union territories which choose to participate in the NAIS,
insurance for food crops, oil seeds and selected commercial crops is
compulsory for all farmers who take Seasonal Agricultural Operations credit
from financial institutions, and is voluntary for non-borrowing farmers. If
regional crop yield measurements fall below a pre-specified threshold, the
participating farmers in that region become eligible for a payout.
The state-sponsored Agriculture Insurance Company of India covers the claim
up to the premium, and then the local and national governments contribute
equally to cover the remainder. For commercial crops, the premium rates are
based on risk calculations, and the government does not subsidise claims.

Results

Reaches approximately 24 percent of farm households nationwide, and

both poor and middle income farmers buy insurance.

Insurance supports adaptation through allowing farmers to be more

innovative: a randomised control experiment in Andhra Pradesh, India,
showed that weather index-based insurance prompted a shift toward
more profitable, higher risk farm production systems.

Lessons learned

Timely processing of claims is key to ongoing participation; difficulties in

the administration and financing of NAIS led to systemic delays in the
settlement of claims (up to 9-12 months or more) and poor risk
classification, resulting in adverse selection and inequity between farmers
in nearby insurance units.

In 2010, the Government of India introduced a better accounting system

in 50 districts to address this challenge. Up-front subsidies were
introduced to reduce farmers financial liability, reducing the insurance
unit size to village level to increase accuracy, threshold yields were
adjusted, and coverage based on weather indices for failed planting,
prevented sowing and post-harvest risks was introduced.

37

4.2. International financial mechanisms

Currently, there are no international financial mechanisms explicitly designed to
address loss and damage. This is hardly surprising given that loss and damage is
still a contested term within international climate negotiations. A study by
Vanhala and Hestbaek (2016) on the history of the concept reveals how
disagreements over whether the term should refer to compensation and liability
or not have prevented the UNFCCC from addressing the issue until fairly recently
(Vanhala and Hestbaek, 2016). Although the Paris Agreement outlines that Art. 9
on loss and damage does not involve or provide a basis for any liability or
compensation; this question remains far from resolved. (Paris Agreement, para.
52). Developed countries are reticent to address this issue and, at present, there
are no loss and damage funds or permanent mechanisms. Particularly because
estimates of loss and damage are expected to be high: Hope (2009) predicts
from 2000-2200 the worst-case scenario for loss and damage will be USD 275
trillion, and the best case would be USD 1240 trillion.
There are, however, other international financial mechanisms which indirectly
address the issue of loss and damage. The Section on climate finance in the Paris
Agreement, Art. 9, begins by stating that Developed country Parties shall
provide financial resources to assist developing country Parties with respect to
both mitigation and adaptation in continuation of their existing obligations. Later
in Art. 9, it states climate finance should balance adaptation and take into
account the priorities and needs of developing country Parties, especially those
that are particularly vulnerable to the adverse effects of climate change and
have significant capacity constraints, such as the least developed countries and
small island developing States. By prioritising the adaptation needs of the most
vulnerable, as well as their capacity limits, the agreement is at least allowing for
a framework to reduce and prevent climate change-related loss and damage.
This suggests that the current UNFCCC funds intended for adaptation could
include projects that either attempt to minimise loss and damage or support
vulnerable people recover from climate change impacts in a manner that also
builds their resilience to climate change (Durand et al., 2016). The current
UNFCCC climate funds that could support this are: the Green Climate Fund, the
Adaptation Fund, the Special Climate Change Fund and the LDC Fund. It is
important to note, however, that this framework for minimising loss and damage
does not address what happens when adaptation limits are met and unavoidable
loss and damage occurs, nor does it address NELD (Durand et al., 2016).
Outside of the UNFCCC, there are a few examples of bilateral funds that also
indirectly acknowledge and address loss and damage. For instance, the United
States at COP 21 gave USD 30 million to SIDS in the Pacific, Central America and
Africa for climate risk insurance schemes (Rowling, 2015). This fund will extend
insurance coverage to support those coping with extreme climate change
impacts such as droughts, floods and cyclones. This was an implicit recognition
of loss and damage by one of the largest greenhouse gas emitting nations in the
world, because it took action to financially support to those who will experience
loss and damage from climate change.
38

In fact, much of the international conversation on loss and damage has moved
towards finance mechanisms as described in Figure E below:

39

Figure E. Tools and instruments reported by the ExCom (2016)

Categories of instruments

Types of instruments and tools

Comprehensive risk
management capacity with risk
pooling and transfer

Catastrophe risk insurance

Contingency finance

Tools to identify risks and appropriate

responses: risk layering analysis, total
climate risk approach
Various financial instruments (insurance,
credit, savings) linked to risk reduction
measures
Catastrophe risk insurance at national or
regional level (with the possibility of
including micro and meso insurance)
Regional risk pooling mechanisms
Indexbased insurance schemes
Group insurance
Contingency fund
Disaster relief fund
Restoration fund for preferential interest
rate financing
Contingent credit
Microcredit

Climatethemed bonds and

their certification

Climate bonds

Catastrophe bonds

Catastrophe bonds

Standard and certification schemes

Expost bonds

Financing approaches to making Total climate risk approach and most of the
development climate resilient
instruments mentioned above
Other innovative tools proposed (from Durand et al. 2016)

Financial transaction tax/Robin hood tax

International Airline passenger levy
Bunker fuels levy
Fossil fuel majors carbon levy
Global carbon tax

Although developing countries at the climate negotiations pushed for loss and
damage to include compensation and liability, Vanhala and Hestbaek (2016)
point out that many developing countries were never necessarily opposed to
these other tools, focused on insurance, risk-transfer and climate bonds. In fact,
Vanuatu, as early as 1991, put forward the idea of an international insurance
pool to compensate small island developing states (SIDS) for the damages
40

occurred as a result of rising sea levels (Vanhala and Hestbaek, 2016).

Moreover, the most vulnerable countries have often pushed for insurance and
risk-transfer mechanisms to be part and parcel with issues of compensation and
liability, as evidenced by countries like Vanuatu which have often pushed for
insurance.
While these mechanisms are still being developed at the international level, by
both public and private actors, there are a few conversations worth mentioning.
One is the proposal of Weather-based Index insurance, where insurance claims
would be measured against a set of indicators that - based on observed trends would determine whether or not a climatic event was indeed climate change.
Another is who should pay the premium for insurance, with many proposing that
developed countries should take this burden, thereby transferring the financial
risk from the most vulnerable to the wealthier countries. However, both Vanhala
and Hestbaek (2016) and Durand et al., (2015) warn that there are limitations to
how well the insurance mechanisms and risk transfer, which are ultimately
market-dependant, can be used to address climate change. Questions arise over
the politics and science of climate change attribution; NELD (such as loss of
home or even loss of tradition); and slow-onset disasters (whether risk transfer
and insurance tools make sense in the context of the gradual destruction caused
by climate change).
There is also the question of where international finance to support loss and
damage insurance and risk transfer should come from. Given the many
challenges to obtain sufficient funding for mitigation and adaptation, some within
the UNFCCC climate process have called for innovated sources of finance.
Durand et al., (2016) considered various sources of innovative finance in Figure C
above.
Since loss and damage has only recently officially entered the UNFCCC arena,
added to the fact that it is still a very controversial and contested subject, there
is still likely some time before comprehensive financial mechanisms to address
loss and damage, even if limited to the sphere of insurance and risk transfer,
occur. It is more likely that private sector actors, such as insurance companies
and even NGOs (likely by means of micro-insurance), will take the lead in setting
the groundwork for how international finances can be used to address climate
related loss and damage. However, even then, there are still several questions to
be worked out by the UNFCCC, which will hopefully be addressed at COP 22, in
Marrakesh, by the WIM on Loss and Damage: who should pay, how should they
pay, and who should they pay to?

41

5.

Stakeholder consultations

5.1. Field level consultations

District consultations were organised jointly by ActionAid Bangladesh and Care
Bangladesh in Rangpur, Sylhet, Khulna and Chittagong. The Deputy
Commissioners from all four districts were in attendance and led each workshop,
providing invaluable insights on local disaster scenarios. The consultation dates
were as follows:
Sylhet: on 4 September 2016, organized by CARE Bangladesh and attended by
44 participants. Rangpur: on 5 September 2016, organized by CARE
Bangladesh
and
attended
by
39
participants.
Khulna: on 7 September 2016, organized by ActionAid Bangladesh and attended
by
28
participants.
Chittagong: on 24 September 2016, organized by ActionAid Bangladesh and
attended by 28 participants.
Jesmin B Hossain (Resilience and Climate Change Coordinator, Care Bangladesh)
and Tanjir Hossain (Head of Climate Change Unit, ActionAid Bangladesh)
facilitated all four workshops, along with Mahfuza Akter (Program Officer, Action
Aid Bangladesh) in Sylhet and Rangpur, and Mehrul Islam (Director-PEARL, CARE
Bangladesh) in Rangpur.
Major discussion
In regional workshops, main discussions covered the following:

The current mechanisms of addressing disaster related loss and damage

at the divisional level;
The limitations of current mechanisms;
Whether there will be an increased number of and an intensification of
disasters due to climate change, and effective response mechanisms;
The support central / national government should provide in order to have
an effective loss and damage mechanism.

Participants were very interested to discuss the issue of establishing a National

Mechanism on Loss and Damage. It was shared and agreed by all participants in
all four workshops that the current DRR and response mechanism is functioning
much better than it had done previously. However, climate change projections
demand that coordination at local level is reviewed and further improvement is
imperative. At local level, it was acknowledged that there is still little funding to
address loss and damage. However, participants in the consultations expressed
that they are not yet ready to receive large-scale funding.
Investment on DRR was advocated (that includes an option for protection of
assets and livelihood). It was recognised that a market-based mechanism may
not work there unless regulated and that the safety net mechanisms must be
coordinated. Furthermore, there was support for the establishment and
maintenance of a comprehensive database of people and assets.
42

A pre-risk assessment (index based) was held to be a desirable option; however,

participants recognized the huge scale of such an endeavour.
Overall, participants had a limited understanding of climate change and
therefore further capacity building is needed for local government
officials. Participants knowledge was lacking in climate change issues other than
advocacy, and therefore awareness on everyones role need to be simplified and
disseminated besides knowledge hub establishment. A knowledge hub at local
level was deemed to be critical in order to bring all together relevant
departments of the sub-national government to share their projects and, in
particular, their ideas.
Overall findings

The Government of Bangladesh is well-equipped to reduce the risks of

sudden onset disaster. There is, as of yet, less focus on slow onset events.

Current risk management mechanisms focus on pre-disaster awareness,

infrastructure development and post disaster response and rehabilitation.

The current mechanisms mostly focus on reducing death tolls; there is less
focus on assets.

The data collection forms (D from and SOS form) do not include
information such as social or cultural loss. Additionally, these also do not
include gender segregated data into different age groups.

Participants feel little funding is available to address loss and damage.

Local staff are not prepared to handle large scale funding.

Gaps

No current policies or mechanisms to address slow onset loss and damage.

Comprehensive risk management is required to link sustainable

development, DRR, adaptation and mitigation, which also requires better
coordination between ministries.

Institutional barriers in responding to loss and damage.

More data is required on potential loss and damage in Bangladesh

including climate risks, institutional capacity, etc.

Technical capacity and skills.

43

Photos from field level consultations

Overall Recommendations

Investment on DRR that includes an option for protection of assets and

livelihood.

Coordination at local level is reviewed and developed, with better

designed and coordinated (in a comprehensive way) safety nets.

Establishment and maintenance of a comprehensive database of

people and assets. Linking with the database, a pre-assessment
mechanism is recommended (can also be linked with index based
insurance).

A mass awareness programme should be developed on the concept of

climate change induced loss and damage.

A work programme to be adopted to build capacity at all level of local

government and be equipped with resources (human and finance) to
deal with frequent disasters or even a large scale single event.

Investment is required to enhance local capacity preparedness and

address loss and damage locally using local resources as there may be
multiple disasters in different parts of the country and the central
government may not be able to address all these in an effective way.

44

5.2. National level consultation

Dhaka: on 14 October 2016, organised jointly by CARE Bangladesh and Action
Aid Bangladesh.
Following the
Rangpur,
findings
and
organised
by
Disaster
October at the
good number
concerned
participated in

district level consultations in Sylhet,

Khulna and Chittagong; a sharing of
national consultation workshop was
the Director General, Department of
Management (DG DDM) on 14
DDM conference hall in Dhaka. A
of
goverment
officials
from
departments and other stakeholders
the discussion.

Md.
Reaz
Ahmed, Director General, Dept. of
Disaster
Management was the Chief Guest
and
Dr.
Saleemul Huq, Director ICCCAD was
the Chair. Dr. S M Munjurul Hannan Khan, Joint Secretary, Ministry of Environment
and Forests moderated the workshop and a brief presentation was presented on
the Review Report by the Chair Dr. Saleemul Huq.
Jesmin B Hossain, Resilience & Climate Change Coordinator, CARE Bangladesh
presented a snapshots from the Regional level consultations, Arshad Muhammad,
ACD-Program CARE Bangladesh conveyed vote of thanks to the participants,
while Mehrul Islam, Director- PEARL also participated in discussion. Sajid Raihan,
Deputy Director- Programme, ActionAid Bangladesh spoke on next steps.
Detailed discussions were held on next moves to take the issues forward and
negotiation points of Bangladesh. DG DDM agreed to present the discussion at
COP 22.

Photos from the national level consultation

At the national workshop, discussions on developing effective loss and damage
mechanisms for Bangladesh were held and the study recommendations were
presented as follows:
Study Recommendations 1

A framework for enhancing understanding and knowledge related to

climate impacts, vulnerabilities and loss and damage;

Specific legislative and institutional frameworks on loss and damage;

45

Nationally appropriate approaches of comprehensive risk management,

including risk reduction, risk retention and risk transfer etc.
o

These should consider slow-onset and non-economic loss and

damage.

Appropriate attention must be had to poor and vulnerable groups.

Study Recommendations 2

Assess financial instruments and ensure that the funds reach the most
vulnerable;

Policies for and institutionalisation of migration and displacement

issues, and collaboration with regional and international efforts;

Establish collaboration between the National Mechanism and WIM;

A framework for facilitating research on loss and damage.

Study Recommendations 3

Minimise institutional barriers:

o

An independent or centralised system should be devised which

would manage and supervise relevant activities;

Hire and train efficient government staff;

An independent body or programme to train the private sector to be

involved in tackling loss and damage.

Study Recommendations 4

Establishment and maintenance of a comprehensive database of risks,

vulnerabilities, hazards, people and assets; collecting information on social
and cultural loss;

Capacity building and awareness raising on loss and damage;

A monitoring and evaluation system to oversee the allocation,

disbursement of finance and implementation.

Overall Recommendations

Government of Bangladesh should consider setting up a National

Mechanism on Loss and Damage through a new technical team with
specific ToRs;

46

Recommendations of the current study could guide the new technical

team.

47

6.

Comprehensive risk management approaches

6.1. Risk management approaches

Approaches to address loss and damage can be grouped into three categories
including risk reduction, risk retention, and risk transfer to address loss and
damage (UNFCCC, 2012). Under this section, all three approaches, as well as
approaches to specifically target loss and damage from slow onset events, will
be discussed in light of the district consultations that were conducted to
understand the practical approaches which are feasible considering readiness
of the national and local administrations.

6.2. Risk reduction

Risk reduction covers measures implemented prior to the occurrence of extreme
events. It is effective for frequent yet low-impact climate stressors. Structural
risk reduction aims to build physical infrastructure and protection structures such
as dykes, cyclone shelters and flood protection walls/seawalls. Non-structural risk
reduction techniques improve systems such as early warning, adjustments in
livelihood practices such as agriculture and relocation programmes. Structural
measures can be costly to build and maintain, whereas non-structural
approaches can be relatively inexpensive but require continuous monitoring.

District consultation findings on risk reduction

It evident at national level as well as at local level that the Government of
Bangladesh is well-equipped with knowledge, skill, capacity and equipment to
reduce the 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 human lives and is
lacking in consideration of issues such as saving assets and livestock during
and post-disaster. Therefore, post-disaster loss and damage remains

6.3. Risk retention

Risk retention refers to the approaches which allow populations to self-insure
against climatic stressors. There are social, physical and economic advantages,
particularly to social safety nets and contingency funds. Financial risk retention
can be passive or reactive 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
48

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 programmes.

Social safety nets: According to a recent report by the United Nations

Development Programme (UNDP), Bangladesh has spent an average of USD
1.64 billion per year or 1.6 percent of GDP on social safety nets (PPRC-UNDP,
2012). The GoB has also implemented a post-flood programme to provide
agricultural subsidies to affected farmers. In 2007, the GoB provided USD
12.7 million in relief in the aftermath of two flooding events, USD 4.6 million
for recovery from Cyclone Sidr and USD 2.9 million for agricultural
rehabilitation (Finance Division, 2008).

Microfinance: Bangladesh has over 1200 certified microfinance institutions,

serving 13 million clients (CDF, 2002). Traditionally microfinance institutions
have provided loans to groups of individuals, particularly women, who are
collectively responsible for repaying their loan (Hammil et al., 2008). These
programmes help the poor purchase assets, diversify their income and invest
in activities such as strengthening their homes. However, the microfinance
programme tends to service specific areas within Bangladesh rather than the
country as a whole.

District consultation findings on risk retention

There are debates around the governance of the safety net programmes,
while most of the participants agreed that it can be, if better designed (in a
comprehensive way) and implemented, one of the most effective measures
to address loss and damage. In terms of microfinance, the government
initiatives such as loan for farmers were found to be effective but very
limited, with questions remaining about the governance of the programme.
With regards to the NGO provided microfinance, the service charges were
found to be very high; therefore, it has the potential to create further
vulnerability rather than reducing existing vulnerabilities.

6.4. Risk transfer

An insurance mechanism shifts economic risks, mostly financial, from an
individual or organisation to an insurer. Risk transfer approaches do not prevent
or reduce the risk of damage or loss; however, it aims at reducing the effect of
loss and damage by making financial liquidity available to overcome it, 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 that the
potential onset of loss and damage 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
49

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 approach 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, though insurance schemes are a measure of protection in the event
of an unforeseeable disaster, they can create disincentives for farmers to
innovate and protect themselves through coping strategies which are better
suited to withstand the test of time and reoccurrence. This, in turn, exacerbates
farmers vulnerable positions. On the other hand, if a farmer was assured of
payments due to their insurance mechanism, that insurance might incentivise
the farmer to invest in saline or drought-resistant crops or to adopt modern
technologies for irrigation systems, because the assurance of their livelihood
would be the payout. The schemes currently supply short-term protection, but
fail 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 evolves, the long-term impacts of climate change are becoming
more and more apparent, rendering the insurance inappropriate from a business
point of view as premiums for farmers would be too high based on the assurance
that an event would take place.
One commonly supported transfer stipulation in the developing context is third
party payment. By transferring the risk, through farmer-based premium
payments, the system does not create accountability within the climate
emissions and contributions dilemma. Instead, it only transfers the risks and the
associated cost of loss and damage back to the farming individuals who
contributed the least, but are the most exposed and vulnerable to climatic shifts.
If we consider the additional complications of establishing a claims system, the
reality of implementation of a third party payment system becomes even more
challenging as the linear attribution or cause-and-effect of a single event
(especially extreme events) cannot (yet) be firmly established with a guarantee
of certainty.
Bangladesh is ranked as 76th in the world with a share of 0.02 percent of the
world insurance market. Though the insurance industries in the country have
been following a stable growth rate (of around 10 percent), the insurance
penetration was only 0.9 percent. The per capita spending on insurance is
reported as USD 2.6. Currently, a total of 77 insurance companies (46 non-life
related and 31 life related) operating in the country are regulated by the
Insurance Development and Regulatory Authority Bangladesh (IDRA, 2016). The

50

GoB approved a National Insurance Policy in 2014 which acknowledged the

benefit of having insurance schemes for natural disasters (IDRA, 2014).
A study commissioned by the Climate Change Cell reported that the Sadharan
Bima Corporation (SBC) has initiated crop insurance several times since 1981 but
incurred losses of over 500 percent. Unfortunately, crop insurance is not directly
or functionally viable anywhere in the world and even in the industrial countries,
it functions as public welfare (DoE 2008). Later in 2013, for the first time, a meso
level catastrophic flood insurance scheme was initiated by Oxfam Great Britain
(GB) in association with Pragati Insurance Limited on a pilot basis in some
selected villages of the Sirajganj district under the umbrella of Index-based flood
insurance. Under this scheme, if water levels cross a certain locally-determined
threshold and remain for 11 days, each household will get 2,800 taka (USD 36); if
floods remain for 21 days, the household receives 4,400 taka (USD 56); and for
26 days, 8,000 taka (USD 103), (Oxfam GB, 2013).
In Bangladesh, some NGOs such as the Grameen Bank, BRAC, and other
microfinance organisations have established micro-insurance programmes to
reduce the social and economic vulnerability of Bangladeshs poorest
communities. These programmes mainly cover the loss of small-scale assets,
livestock, and crops in the event of a flood, drought or other disaster. However,
most of the flood schemes are limited in scope, ineffective and little known to the
public. However, given that insurance is considered in the ongoing UNFCCC
negotiation process as one of the most important tools for risk transfer
mechanisms related to addressing loss and damage, these initiatives can be

District consultation findings on risk transfer of sharing:

Insurance
Insurance is not a popular idea at sub-national level as there are mixed
experiences shared by many. However, an index-based insurance (after
sharing the idea) led to a more positive response from the participants in all
four districts, noting that it needs to be tested on the ground before they can
useful for developing further insurance mechanisms in Bangladesh, but they
need policy guidance.

6.5. Approaches to addressing loss and damage associated with

slow onset events
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 to tackling these include: resource management; awareness and
capacity building; research, development and innovation; lands use planning and
agriculture practice efficiency; contingency planning; regional and transboundary
diplomatic relations; policy and regulatory frameworks; information and data
exchange; early warning indicators; infrastructure investment; planned migration
and population settlement; threshold setting and monitoring; economic and
51

financial tools; weather and climate modelling;

diversification; and institutional coordination.

economic

and

livelihood

District consultation findings on approaches to address loss

and damage associated with slow onset events
People are not thinking about slow onset events such as prolonged drought or
sea level rise (even some of the government officials suggested that sea
level rise is not a scientific prediction but rather a hoax / propaganda). People
in the Khulna district are aware about salinity and consider it as a major
problem. However, they link increase of salinity with single event such as a
cyclone or embankment collapse, as opposed to climate change.

52

6.6

Approaches to dealing with non-economic loss and damage

Non-economic loss and damage (NELD) is currently unaddressed specifically by

law and policy in Bangladesh, perhaps as a result of its seemingly unquantifiable
by market-value nature. Nevertheless, the UNFCCC proposed a potential policy
framework to address NELD initially in the climate talks at Durban and then in
Doha in 2012 at COP 18 (Morrissey. J and Oliver-Smith. A, 2013, 4.) The ExCom of
the WIM also proposed in its initial two-year workplan considered at COP 20 in
2014 that data, knowledge and awareness-raising on NELD be enhanced and
that NELD risk reduction with particular regional focus be facilitated (BCAS and
ICCCAD, 2015, 57). Research on different approaches to address NELD is ongoing
at international level (Siegele. L, 2012, 16).
At national level, a pioneering study on NELD in Southwest Bangladesh by BCAS
and ICCCAD identified, measured and characterised loss and damage in its
national context through community consultations, with a view to informing
local, national regional and international policy frameworks (BCAS and ICCCAD,
2015, 56). It suggested that at international level, standard tools and methods be
adopted for identifying, monitoring, and assessing NELD; risk management
approaches which can reduce NELD be identified and recommended to national
governments; and guidance on redressing NELD be developed for institutional
and policy approaches (Ibid., 57).
Nationally, the BCAS and ICCCAD-led study suggested that a future National
Mechanism on Loss and Damage should include approaches such as: greater
local-level analysis and data collection of NELD; field projects on NELD informed
by such data; a bottom-up approach using this data to design the national policy
framework and thereafter regional and international policy frameworks (Ibid., 5960).
International research suggests that informed approaches to addressing NELD
include designing loss and damage institutional and financial response according
to the needs of the most vulnerable (Morrissey. J and Oliver-Smith. A, 2013, 18).
Action should also prioritise the social participation of communities, including in
adaptation policy, ensuring that they can communicate their understanding of
the value of their losses (Ibid.). It must promote resilience and empowerment
among affected communities (Ibid., 19). Approaches which bolster community
social relations are encouraged, such as the organisation of social meeting points
and the conservation of intangible issues threatened such as indigenous
traditions, culture, music and language (Ibid.).

53

6.7

Approaches to dealing with migration and displacement

At COP 21, it was proposed that a task force be developed in order to develop
recommendations for integrated approaches to avert, minimize and address
displacement related to the adverse impacts of climate change, (COP 21
Decision, para. 50). At COP 22 in Morocco, a technical meeting will take place on
migration, displacement and human mobility (UNFCCC, 27-29 July, 2016). This
will be organised by the International Organization for Migration and will include
the ExCom of the WIM members, national and regional experts and
representatives of the UN and international organisations as well as from the
academic community (Ibid.).
International legal and policy instruments related to migration and displacement
have been deemed inadequate to protect so-called climate migrants. Refugee
law and other regional laws and policies on migration and displacement are
presently limited in scope either substantively or geographically to address the
issue and international debates are ongoing. A bottom-up approach to
addressing the issue (e.g. human rights based national policy on planned
relocation which takes into account both economic and non-economic loss and
damage) may facilitate the development of national and then regional and
international mechanisms for climate migrants, where migration in Bangladesh
is regarded as an opportunity and not a problem caused by climate change.

54

7.

Exploring potential national framework for loss and

damage

7.1. Gaps and scope in existing mechanisms

In order to discuss a potential National Mechanism on Loss and Damage, it is
essential to examine the gaps and scope which have been identified throughout
this study and which any future framework would be designed to address.
Firstly, a lack of institutional, policy-related and legislative mechanisms
specifically and explicitly dedicated to addressing loss and damage, including
slow onset events, was identified. A National Mechanism should aim to amend
the existing legislative and institutional frameworks in Bangladesh to incorporate
specific provisions to address loss and damage.
To remove institutional barriers such as bureaucracy, duplication of work,
corruption and mismanagement; comprehensive risk management is needed to
ensure a synergy of efforts for sustainable development, DRR, CCA and
mitigation. This requires greater coordination among relevant government
ministries and departments; leading research institutions and implementing
agencies. An independent or centralised system should be devised to manage
and supervise the activities of these bodies to foster coordination. Furthermore,
it could function as a platform for the relevant stakeholders from leading
research and academic institutions to design innovative loss and damage
actions.
While many national financial mechanisms have been identified which can
indirectly address loss and damage, these need to be strengthened and
mandates revised to explicitly include loss and damage. To ensure adequate
funding, the MoDMR could allocate its reserve fund to either compensate
vulnerable communities to cope with loss and damage or to invest in risk
management approaches. This could be marked by an amendment of the CCTFA,
which would put the MoDMR in charge of fund management and address the
aforementioned institutional barriers. Given the lack of civil society
representation in existing fund boards and technical committees, their
participation should be guaranteed in the administration of future funding for
loss and damage, ensuring objectivity in project selection. Access to government,
NGO-led or private funding must be revised to prevent the existing financial
exclusion, perhaps considering individual access. Monitoring of funding is
essential to ensure it reaches those most in need, particularly women and other
groups in vulnerable situations. In order to combat corruption in the provision of
climate finance and ensure effectiveness and legitimacy, the aforementioned
centralised system could incorporate a monitoring and evaluation element to
oversee the disbursement of climate finance and implementation of
programmes.
With regards to comprehensive risk management approaches, greater policy
guidance is needed. The overall disaster management mechanism (pre, during
55

and post) needs to consider future climate trajectories and adjust accordingly,
including loss and damage as a stream within. Greater financial and institutional
investment on DRR and regulations for market based mechanisms are proposed.
Risk retention and transfer approaches such as micro insurance through national
safety net programmes should be considered, although they should be tailored to
and fully accessible to poor and vulnerable communities in Bangladesh. A pilot
period for such schemes was desired at the divisional consultations; as
participants were vary of insurance. Microfinance programmes with flexible
repayment terms which allow clients to temporarily suspend payment during
drought, floods or in the onset of other events was also popular.
More adequate and accurate data needs to be made available to better identify
climate hazards, vulnerabilities and risks. A centralised system or enhanced
institutional arrangements would ensure the collection and management of upto-date, comprehensive and disaggregated (by gender, wealth and age) data
pertaining to loss and damage, including from slow onset events. This could
involve: risk identification; risk assessment, perhaps through index-based
insurance; the use of climate change related monitoring indicators in
consultation with the experts and local people as part of a well-designed climate
monitoring system; the identification of knowledge gaps in developing actions on
loss and damage; and a form of review of progress made with necessary
recommendations. Data collection should also include NELD including social or
cultural loss. On this note, it was proposed that a national mechanism, as with
the UNFCCC WIM on Loss and Damage, should address not only financial loss and
damage but also NELD.
In order to conduct such research as well as to address the other gaps described,
capacity building should be enhanced among the relevant government, subnational and research institutions, including on technical managerial skills. The
aforementioned centralised system could facilitate this and address the lack of
financial and human resources to address loss and damage. A knowledge hub at
local level was also a popular idea at the consultations, to enhance preparedness
at local level using local resources, as a centralised system may not be able to
address multiple disasters throughout Bangladesh simultaneously. Private sector
training could involve readiness and preparatory activities to facilitate access to
the GCF, help in the attainment of carbon credits (with international support) and
facilitate research.

7.2. National Mechanism on Loss and Damage in Bangladesh

While negotiations on loss and damage are taking place within the UNFCCC
regime, loss and damage resulting from inter alia climate change impacts is
evident at the local level and this report also provides the contexts of loss and
damage in Bangladesh. However, the prerequisite of addressing a particular case
of loss and damage associated with climate change is to assess and quantify
each case, taking into account the socio-economic and geographical contexts.
Understanding and successfully assessing a particular case of climate change
56

induced loss and damage would also suggest the required approaches for
dealing with such loss and damage. Thus, the identification, measurement and
characterisation of loss and damage are primary requirements for developing
local, national, regional and international policy, legal and institutional
frameworks (Khan. HI, 2013).
Assessment and identification of the best approaches to address loss and
damage at a micro level demand a particular role of a particular state in
collaboration with regional and international efforts. So, the issue of loss and
damage must be incorporated into existing national institutional and financial
arrangements on climate change as mentioned in the COP 18 decision on loss
and damage which emphasises the need for strengthening institutional
arrangements and enhancing capacity building at the national levels to address
loss and damage (Decision 3/CP.18).
The previous Sections identified the scope of existing policies, legislations and
institutional arrangements relevant to loss and damage associated with adverse
impacts of climate in Bangladesh. They found that existing frameworks provide
limited scope to address loss and damage in Bangladesh. So, existing institutions
can be strengthened to address loss and damage, but the limitations identified in
the existing framework suggest that a specific institution/mechanism should be
established to provide oversight and guidance to all relevant sector institutions
to deal with loss and damage and to take specific initiatives to address loss and
damage at the national level.
The loss and damage vulnerable country initiative project, implemented by some
of the research organisations including ICCCAD, produced a knowledge base on
comprehensive risk assessment approaches including required tools and
methodologies, comprehensive risk management approaches including risk
transfer, risk retention and also approaches on addressing residual loss and
damage including irreversible and permanent loss at the national level (Loss and
Damage in Vulnerable Countries Initiative). Moreover, the WIM on Loss and
Damage is evolving along with structures and functions, generating knowledge
and information and providing guidance to take initiative at the national level.
So, the Government of Bangladesh can develop national mechanisms to address
loss and damage with clear linkages and synergies with the WIM which could also
provide bottom-up support to structuring the WIM to address loss and damage at
international level.
Therefore, at the outset, it is important to identify the functions and activities of
the proposed National Mechanism for loss and damage, which could provide
required guidance for developing the structures of the National Mechanism. The
functions and activities of the National Mechanism can be inter alia to develop:

A framework for enhancing understanding and knowledge

related to climate impacts, vulnerabilities and loss and damage;
The tools and methodologies for comprehensive risk
assessment;

57

Nationally appropriate approaches of comprehensive risk

management, including risk reduction, risk retention and risk
transfer etc.;
The approaches for addressing residual loss and damage,
including permanent and irreversible loss and damage;
A framework for developing early warning systems and
emergency preparedness;
Financial instruments to facilitate works related to loss and
damage and pay compensation;
Nationally appropriate technologies and to facilitate to access
global technologies;
A capacity building framework;
A framework for enhancing resilience of communities,
livelihoods and ecosystems;
Nationally appropriate specific approaches to address loss and
damage associated with slow onset events;
Nationally appropriate specific approaches to address noneconomic loss and damage;
A clearing house for data and information;
A framework for facilitating research and study on loss and
damage;
Policies, plans, legislations and institutions for migration and
displacement and to collaborate with regional and international
efforts;
Sectoral policies, plans, legislations and institutions to
mainstream loss and damage;
Specific national policy and legislation for loss and damage;
A collaborative framework between National Mechanism and the
WIM.

The functions and activities of the proposed National Mechanism identified above
demand the design of an appropriate institutional structure. Initially, a National
Steering Committee of the National Mechanism for Loss and Damage can be
formed consisting of the highest policy makers and relevant experts and this
Steering Committee can provide oversight and guidance to a Technical
Working Group, consisting of relevant experts. The Technical Working Group
can develop a work-plan to identify the appropriate structures and functions of
the National Mechanism for Loss and Damage, which can be subject to approval
by the National Steering Committee. The National Mechanisms proposed
structure is demonstrated in Figure F below.
Figure F. Structural diagram of the proposed National Mechanism on
Loss and Damage

National Steering Committee

58

Technical Working Group

Functions

A framework for enhancing understanding and knowledge

related to climate impacts, vulnerabilities and loss and
damage;
The tools and methodologies for comprehensive risk
assessment;
Nationally appropriate approaches of comprehensive risk
management, including risk reduction, risk retention and
risk transfer etc.;
The approaches for addressing residual loss and damage,
including permanent and irreversible loss and damage;
A framework for developing early warning systems and
emergency preparedness;
Financial instruments to facilitate works related to loss
and damage and pay compensation;
Nationally appropriate technologies and to facilitate to
access global technologies;
A capacity building framework;
A framework for enhancing resilience of communities,
livelihoods and ecosystems;
Nationally appropriate specific approaches to address loss
and damage associated with slow onset events;
Nationally appropriate specific approaches to address
non-economic loss and damage;
A clearing house for data and information;
A framework for facilitating research and study on loss
and damage;
Policies, plans, legislations and institutions for migration
and displacement and to collaborate with regional and
international efforts;

59

7.3.

Specific Terms of Reference (ToRs) of National Steering Committee

and
Technical Working Group

The National Steering Committee of the National Mechanism for Loss and
Damage, which is suggested to be formed consisting of the highest policy
makers and relevant experts, would provide oversight and guidance to a
Technical Working Group. Therefore, the specific Terms of Reference (ToRs) of the
National Steering Committee should be as follows:
a) To take the political decisions related to UNFCCC negotiations on loss and
damage and national policy making processes;
b) To approve the formation and ToRs of the Technical Working Group;
c) To establish other expert groups as needed to assist the Technical Working
Group;
d) To approve the work plans of Technical Working Group;
e) To monitor and evaluate the work of the Technical Working Group.
The Technical Working Group can be formed with sectoral experts and can lead
the specific thematic activities identified in the previous Section. The specific
Terms of Reference (ToRs) of the Technical Working Group can be as follows:
a) To identify the thematic areas and activities;
b) To develop a thematic work plan and implement thematic activities;
c) To recommend the formation of expert groups/panels;
d) To approve the work plan, activities and ToRs of expert groups/panels;
e) To monitor and evaluate the implementation of work plans and activities of
expert groups/panels;
f) To provide technical guidance/recommendations to the National Steering
Committee.

8.

Concluding remarks

This technical report identified and reviewed the existing policies, legislations,
and institutions in Bangladesh relevant to loss and damage associated with the
adverse impacts of climate change and found that existing mechanisms relevant
to loss and damage are not adequate. In this light, this study explored the initial
structure and functions of the National Mechanism on Loss and Damage in
Bangladesh. However, to structure and design such a National Mechanism,
further comprehensive study is needed and the Government of Bangladesh can
commence such a study involving the relevant experts. A National Steering
60

Committee and Technical Working Group should be formed accordingly to further

develop Bangladeshs National Mechanism for Loss and Damage.

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