Envisioning a green future for Bangladesh
Finance Minister AH Mahmood Ali recently spoke at a South Asia Sub-regional Economic Cooperation (SASEC) knowledge event about how building greater trust and confidence among South Asian nations could be the key to leveraging enormous opportunities for cross-border energy trade and attracting international finance in energy transition projects in the region. As Bangladesh stands at a critical juncture in its development journey, the question of transitioning to clean energy has never been more pertinent. With a growing population, rapid urbanization, and increasing industrialization, the country faces immense pressure to meet its growing energy demands while mitigating the adverse effects of climate change. Yet, despite its transformative value, the more important question regarding the transition to clean energy in the context of Bangladesh is whether it is even possible for the developing country.
Bangladesh, a densely populated country located in the delta region of South Asia, is highly vulnerable to the impacts of climate change. Rising sea levels, erratic weather patterns, and extreme events like cyclones pose significant threats to the country's economy, environment, and livelihoods. Cyclones account for the country's average loss of about $1 billion annually, disproportionately impacting lower-income households in the southern divisions.
The traditional reliance on fossil fuels for energy generation adds to these challenges. Bangladesh generates almost all its electricity from fossil fuels. Such reliance even caused a massive power crisis in the country in 2022. Unsurprisingly, Bangladesh ranks the lowest among all South Asian countries in terms of renewable energy usage.
But the country can’t continue this forever. Its natural gas fields are drying up, forcing the government to rely more on foreign fuel imports. Spot market LNG purchases can cost Bangladesh about $11 billion between 2022 and 2024. Clearly, using fossil fuels is an imposition on the country’s already massive import list. Fossil fuels contribute to greenhouse gas emissions and air pollution, especially in Dhaka, which just adds salt to the wound.
Over the last decade, the Bangladesh government has steered its energy industry toward more diversification and renewable sources, in line with its promise to reduce carbon emissions indicated in its National Determined Contributions (NDC) for 2021. A number of solar projects have been successfully completed, providing 259 MW of power on the national grid and 418 MW off-grid basis. It has unveiled the Integrated Energy & Power Sector Master Plan (IEPMP), which is Bangladesh's first unified and structured master plan for the power sector, with a focus on clean energy. In 2021, the government took the commendable step of canceling 10 coal power plants under consideration, which were meant to run on imported coal.
Despite these initiatives, a few challenges exist to make Bangladesh more habitable in terms of clean energy.
One of the critical barriers to transitioning to clean energy in Bangladesh is the lack of infrastructure and investment in renewable energy technologies. While the country has made strides in harnessing solar power through initiatives like the Solar Home Systems program, there is still significant untapped potential in solar, wind, and hydropower resources. To accelerate the transition to clean energy, the government must prioritize investment in renewable energy infrastructure, incentivize private sector participation, and facilitate technology transfer.
Another challenge is the entrenched dominance of fossil fuels in the country's energy mix, particularly in the power sector. Despite their environmental and health impacts, coal-fired power plants continue to play a significant role in meeting Bangladesh's energy needs. However, investing in coal infrastructure locks the country into a carbon-intensive trajectory, exacerbating climate risks and hindering progress towards a green future. Instead, Bangladesh must prioritize investments in energy efficiency, grid modernization, and decentralized renewable energy solutions to build a resilient and sustainable energy system.
Moreover, the transition to clean energy requires a comprehensive policy framework and regulatory environment that incentivizes renewable energy deployment and discourages fossil fuel consumption. Bangladesh has taken steps in this direction by adopting the Renewable Energy Policy and the National Energy Policy, which set targets for renewable energy generation and promote energy efficiency measures. However, implementing and enforcing these policies are crucial to overcoming institutional barriers and ensuring a smooth transition to clean energy.
Beyond the technical and policy challenges, transitioning to clean energy entails addressing social and economic considerations. The shift away from fossil fuels may affect employment in traditional energy sectors, such as coal mining and oil refining. Therefore, investing in skills development, job training, and social safety nets is essential to support workers transitioning to new green jobs in the renewable energy sector. Additionally, ensuring equitable access to clean energy services for all citizens, particularly those in rural and marginalized communities, is paramount for inclusive and sustainable development.
Despite these challenges, Bangladesh is well-positioned to lead the transition to clean energy in the region. The country has abundant renewable energy resources, a growing market for clean energy technologies, and a strong commitment to international climate goals. Bangladesh can accelerate its transition to clean energy and emerge as a global leader in sustainable development by harnessing its renewable energy potential, leveraging innovative financing mechanisms, and fostering multi-stakeholder partnerships.
In conclusion, transitioning to clean energy is necessary not only to mitigate the impacts of climate change but also to present a significant opportunity for Bangladesh to achieve its development goals in a sustainable and inclusive manner. By embracing renewable energy technologies, fostering green investments, and prioritizing climate action, Bangladesh can pave the way for a brighter, greener future for future generations. The time to act is now, and together, we can build a resilient and prosperous Bangladesh powered by clean energy.
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