Bangladesh rural families spend US$2 billion on climate change – dwarfing government and international finance

The IIED report ‘Bearing the climate burden: how households in Bangladesh are spending too much’ reveals rural families in Bangladesh, many of whom live in poverty, are spending an average of almost US$2 billion (158 billion taka) a year – $79 (6,608 taka) a year per family – on addressing the impacts of climate change.

This is twice as much as the government and nearly 12 times the amount Bangladesh receives in multilateral international climate financing in absolute terms, according to the latest data.

'Bearing the climate burden' is the first report to measure household spending on climate change in any country compared to public climate finance.

Even though the Bangladesh government’s annual budget for addressing climate change in rural areas rose in 2018-19 to $1.46 billion (123.18 billion taka), up from $884 million (74.32 billion taka) in 2014-15, it is still substantially less than the amount rural households are spending on climate change.

The report shows that of this rural households received an estimated total of $154 million a year in international climate and disaster finance – or $6.42 (533 taka) for each rural household per year.

The research found female-headed households spend three times more money as a share of their income than households headed by men, evidence that addressing the impacts of climate change is more of a priority for women.

As a result, households living in poverty are diverting money away from basic necessities including food, education and health in order to repair damage to their homes and replace animals or destroyed crops. Or on such defensive measures as raising their houses above flood levels.

This is causing climate disaster-affected households to borrow from informal sources at high interest rates pushing them deeper into poverty.

It is vital for more climate finance to be directed to the local level. This is crucial for developing countries to be able to achieve the Paris Agreement’s targets and for keeping temperature rise below 1.5 °C above pre-industrial levels. Low-cost loans from formal financial institutions and microfinance NGOs also need to be more widely available.

It is important that local people are included in designing programmes to tackle climate change and address its impacts to ensure their priorities are met. And to make sure that female-headed households are given the extra support they need.

IIED director Andrew Norton said: “This research reveals an alarming imbalance. It is unacceptable that the poorest people are shouldering the burden of spending for adapting to climate change in Bangladesh. Far too little support is being directed to the women, children and men who are living on the frontline of climate change. Much more needs to be done to make sure more public climate finance reaches the people who need it most.”

Previous IIED research shows that less than $1 in $10 of international climate finance is being committed to the local level. As a result, local priorities and the flexibility to respond both to rapidly changing needs and new opportunities are not being met. This will make it significantly harder for developing countries to implement the Paris Agreement and meet the United Nations' Sustainable Development Goals.

The majority of Bangladesh’s population (65%) lives in rural areas. The country is one of the most vulnerable to climate change and extreme weather events and is one of the poorest countries in the world.