Importance of climate financing for green energy
Posted on December 16th, 2023

Ibrahim Khalil Ahasan – independent columnist and freelance journalist based in Dhaka, Bangladesh.

Deliberations at COP 28, the 28th UN Climate Summit in Dubai, have focused on several strategies for reducing greenhouse gas (GHG) emissions in the atmosphere to slow down climate change and global warming. To identify methods to fund non-carbon and renewable energy, participants (governments, financial institutions, and investors from the private sector) have been debating several solutions, such as carbon taxation, emission trading, and lowering the large amounts of subsidies given to the fossil fuel industry. According to experts, the world has to spend billions of dollars a year on renewable energy to transition to a “low carbon economy.” To raise the money required to address the climate catastrophe, IMF Managing Director Christian Georgieva recommended imposing “an implicit price on carbon emissions” during the COP 28 summit. According to her, initiatives aimed at increasing the cost of carbon emissions would hasten the global decarbonization of economic activity.  Advocating for a swift phase-out of fossil fuels, more extreme viewpoints propose limiting global warming to 1.5 degrees Celsius by the end of this century. There is, however, no denying the need of rapidly adapt to renewable energy sources, drastically increasing funding for the research (and usage) of renewable energy, and gradually ceasing to utilize fossil fuels.

Bangladesh and other nations face several obstacles as they transition from fossil fuels to renewable energy. Bangladesh is now a nation that depends on energy imports. The importation of coal, LNG, and liquid petroleum is necessary to maintain the nation’s economic operations. The country’s energy balance has seen a considerable strain from domestic energy sources, namely natural gas. But solar energy—that is, solar-powered irrigation systems, solar-powered rooftop and land systems—is becoming more and more common. Due to significant technical developments in wind turbine efficiency improvement, there are encouraging signs that the nation’s offshore and coastal regions may see the development of wind energy-based power.  However, the price of electricity produced by renewable energy sources like solar and wind is still rather expensive, at over Taka 12 per unit. Furthermore, a restriction on their proportion in the national grid is necessary due to the intermittent nature of solar and wind energy. For the same reason, maintaining and expanding a sizable fossil fuel-based capacity backup is necessary to ensure grid stability.

Experts believe that by increasing energy efficiency and adopting energy-saving practices, Bangladesh may drastically (up to 30%) lower its energy consumption. Bangladesh does not have the topographical or geotechnical advantages necessary to capture significant amounts of hydroelectricity, but it may benefit from its neighbours’ hydroelectric power potential via a regional system. Furthermore, the bordering nations’ developing “green hydrogen” technology may make it possible for the local energy sectors to convert from LNG to liquid hydrogen (import and usage). The capacity of the renewable energy basket may be significantly increased by improved and efficient battery technology. Bangladesh might thereby enter the race to phase out fossil fuels. Almost twice as much (around Taka 22–25 per unit) may be obtained from renewable energy sources with battery backup for solar and wind power as from the current, sporadic, and small-scale use of grid-connected solar power. The large differences in energy production and distribution costs that the steady and diverse range of renewable sources may provide cannot be sustained by government subsidies.

Bangladesh has already entered the age of producing nuclear electricity. There is increasing global agreement that nuclear energy is a non-carbon source. Even though developing nuclear power and securely using it requires significant upfront costs, ongoing costs are still quite inexpensive. Bangladesh may thus increase its nuclear energy capacity in order to get more dependable baseload electricity.

The technologies that are now and in the near future accessible provide means of gradually replacing fossil fuels with non-carbon and renewable energy-based economies. However, the global community’s climate funding and technology support are necessary for the solutions to be both socially and economically acceptable. Bangladesh and other low-income industrialised nations shouldn’t be forced to transition to a non-carbon (net zero) economy on the same timelines. Furthermore, the international community should give Bangladesh, the country most affected by climate change, a high priority in receiving many financial resources for both adaptation and mitigation.

UN climate conferences have repeatedly discussed achieving net zero by 2050, 60% reductions in GHG emissions by 2035, and 43% reductions in GHG emissions (compared to 2019) by 2030. However, these discussions will not produce significant outcomes unless the international community swiftly and effectively provides technology sharing and funding to developing nations such as Bangladesh.

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