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

Press release, 19 September 2019
Struggling families in rural Bangladesh spend almost US$2 billion a year on preventing climate-related disasters or repairing damage caused by climate change – far more than either the government or international bodies, new research today reveals ahead of the UN Climate Action Summit.

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. 

Media enquiries

For more information and to arrange interviews with experts and with affected people in the field, contact Beth Herzfeld, IIED head of media, on +44 (0)7557 658 482 or email beth.herzfeld@iied.org.

Notes to editors

  • Read the full report: Bearing the climate burden: how households in Bangladesh are spending too much
  • The UN Climate Action Summit is meeting in New York on 23 September, related activities start on 21 September
  • The data on households is from the Bangladesh Integrated Household Survey (BIHS) dataset of 6,503 households representing all agro-economic zones of rural Bangladesh. It is approved by the government of Bangladesh. The first round of the BIHS dataset was carried out between October 2011 and March 2012. The second and most recent survey was carried out from January to June 2015. There are 24 million households in rural Bangladesh. 
  • International climate and disaster finance to Bangladesh comprises contributions over five years from the Green Climate Fund, Bangladesh Climate Change Resilience Fund, Climate Investment Fund, the World Bank’s Coastal Embankment Improvement Project and the Multipurpose Disaster Shelter Project. The other main multilateral partner is the United Nations Development Programme Comprehensive Disaster Management Programme 2.   
  • IIED estimates less than 10% of the $17 billion climate finance committed from international climate funds between 2003 and 2016 was prioritised for local-level activities. Committing these funds to every level – national, regional and local – is crucial. The imbalance needs to be addressed with more of this money channelled to the local level. This analysis is of dedicated climate funds, which is only 7% of total climate finance over this period, as the rest of the climate finance is not sufficiently transparent to be analysed. Greater transparency is needed to be able to track the effectiveness of climate finance. Read: Financing local responses to poverty, climate and nature 
  • For more on effective ways to channel climate finance, read: Money where it matters: designing funds for the frontier
  • According to UNEP, donors and global funds only committed $22 billion to adaptation – $140-300 billion is needed annually by 2030 in order to meet the Paris Agreement’s commitment for balanced support for adaptation and mitigation projects.
  • IIED is a policy and action research organisation. It promotes sustainable development to improve livelihoods and protect the environments on which these livelihoods are built. IIED specialises in linking local priorities to global challenges. Based in London, UK it works in Africa, Asia, Latin America, the Middle East and the Pacific, with some of the world's most vulnerable people to strengthen their voice in the decision-making arenas that affect them – from village councils to international conventions
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