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Low carbon development path in Bangladesh: institutional perspective

24 Jun 2017, 18:49 | updated: 24 Jun 2017, 19:10

Tareq Zahirul Haque

Climate change is considered as one of the foremost problems the world faces today. Low Carbon Development (LCD) approach has become an emerging framework to address the challenge of climate change. While both developed and developing countries are now undergoing the process of LCD strategies, they are not equally capable to align with the LCD path. Since LCD path has a significant correlation with adopting advance technology, it requires huge initial economic investment. Unlike developed countries, it is usually difficult for developing countries to divert resources for LCD as they have many pressing issues such as poverty, illiteracy to deal with. Nevertheless, Bangladesh, a highly climate-vulnerable country, has no legal obligation to follow LCD approach, has made significant progress towards LCD path.

Against this backdrop, this article aims to understand the institutional influences of Bangladesh to support LCD path. The research question is: How do the prevailing institutional environment of Bangladesh promote LCD path? To answer this question, this paper will explore what institutional causes have motivated to proceed towards LCD path; who/what are the influential institutional actors/factors have influenced much; and whether the institutional contexts have resisted or facilitated. The paper begins with a background of LCD and Bangladesh, and then will present ‘institutional theory’ as a central guidance to situate the analysis. Finally, it will provide an analysis for answering the research question followed by a conclusion.

LCD and Bangladesh

In general, most existing definitions of LCD focus on the mitigation of greenhouse gas emissions in the process of development. More recently, adaptation has also been increasingly recognised as an important component of LCD in particular, in low-income country context. As such, LCD path incorporates three policy areas of climate change: mitigation, adaptation and development to find synergies and win-win. The alignment of policies regarding mitigation, adaptation and development is important to achieve co-benefits. Adaptation measures reduce the detrimental effects of climate change and thereby can contribute to sustain development.

Development activities lessen vulnerabilities to climate change impacts through building adaptive capacity. And, mitigation measures reduce the future risk of climate change through reducing carbon emissions.  LCD path combines all three policy arenas especially in the context of Least Developed Countries (LDCs).

Bangladesh has been undergoing in the above approach of LCD. Recently, the country has developed a number of documents in all three arenas of LCD. In 2005, Bangladesh adopted National Adaptation Plan of Action (NAPA) to address pressing and short-term needs of climate change impacts. After that, in 2008 the country formulated Bangladesh Climate Change Strategy and Action Plan (BCCSAP) for addressing both mitigation and adaptation.

Currently, Bangladesh is formulating Nationally Appropriate Mitigation Actions (NAMAs), country-specific emissions mitigation plan. Despite knowing high economic cost involved in mitigation, major national development plans have incorporated mitigation along with adaptation, as part of the overall development strategy. While the Ministry of Environment and Forest (MoEF) is the central organisation to develop climate change related policies, the Planning Commission (PC) is responsible for development planning. Given that, it is worthwhile to understand the institutional process through which Bangladesh is moving towards LCD path. This inquiry will provide important insights essential for better future result from LCD approach in Bangladesh, and to draw lessons for other LDCs.

Institutional theory

This paper has considered institutional theory to guide the whole analyses systematically. Institutional theory explains the processes by which institution influences organisations to conform to the environment. This theory has the competency to explain organisational response as a result of the institutional influences or pressures exerted on organisations. In the paper, the organisation will primarily mean the MoEF as they are the central authority of environmental issues.

Institution may be as state (regulatory arrangement, government agencies, courts and laws) and professions.  Apart from the state and professions, institutional constituents also include interest groups including public. In this paper, institution will mean state, professions and differing interest groups including public opinions.

Institutional theory depicts three major forms of drivers/pressures such as coercive, normative and mimetic that produce ‘isomorphism’ in organisational processes, structures and strategies. Coercive driver such as legal obligations come from those who are in powerful positions. Normative drivers are entrenched in the societal values that exert pressure to comply with societal obligations. And, mimetic drivers occur when organisations imitate the activities of other similar organisations. It does not essentially mean that, organisations respond equally to all three types of pressures. Rather, organisational responses depend on five basic questions such as, ‘why these pressures are being exerted, who is exerting them, what these pressures are, how or by what means they are exerted, and where they occur’. In line with these five questions, five institutional antecedents are outlined - cause, constituents, content, control and context respectively. Though not a comprehensive list, the subsequent analyses will proceed using three antecedents specifically cause, constituent and context for illustrating the institutional process of Bangladesh in promoting LCD path.  

Cause

Cause is defined as the rationale, expectorations or anticipated objectives of institutional pressures exerted on organisations for conformity. The underlying reasons of institutional pressures on organisations are categorised into two classes: social fitness and economic fitness. Pressures such as laws that demand organisations to reduce greenhouse gas emission make organisations socially acceptable and fit. Economic fitness of organisation in terms of gains or rationality is also an important cause of institutional pressures. When organisations assume that the conformity will enhance the social and economic fitness, they usually become more responsive to the institutional pressures.

In Bangladesh, though both social and economic fitness have contributed to LCD approach, economic fitness is the key promoter. Despite having environmental regulations, in Bangladesh enforcement is weak because of the traditional command and control mechanisms that undermine the social legitimacy of organisations. Additionally, in the absence of the informal enforcement mechanisms (e.g. public monitoring, disclosure of factory’s emission), the social fitness of organisations are poor. It is true that the authority is getting pressure to conform to sustainable environment management from public due to civic movements against environmental degradation. Nevertheless, overall the social fitness is not the key motivator for LCD approach in Bangladesh.

On the other hand, economic fitness has been found to be a principal cause of organisational motivation to promote LCD path in Bangladesh. The government is providing various financial incentives to the highly polluter industries for adopting environment-friendly technology including alternative energy generations. These initiatives are contributing to promoting LCD path. Concurrently, a number of international climate funding windows have been opened towards LCD, which has motivated the government. For instance, Asian Development Bank (ADB) provided fund to the MoEF for promoting Bangladesh brick industry to adopt green technology as this industry was alarmingly emitting greenhouse gases. This fund incentivised the industry to adopt green technology.

Moreover, the MoEF promoted the industry through generating finance from the source of the Green Climate Fund (GFC). Notably, according to the Kyoto Protocol, developing countries have opportunity to earn revenue from the GFC though carbon trading. Statistics shows that if Bangladesh brick industry can cut annual carbon emission by even 50% through adopting green technology, the country will gain US$ 4.17 million per annum by carbon trading.  This is no doubt an exemplary economic incentive for both the MoEF and brick industry to invest in low-carbon technology. Thus, this example demonstrates how economic incentive has incentivised government and the brickfield industry to promote green technology.

Constituent

Constituent refers to the actors who exert institutional influences to the organisations for conformity. Institutional constituents may include the state, interest groups, professions and common public who can impose laws, regulatory rules and expectancy on the organization. Institutional pressures can come from both internal (within state) or external (outside state) actors or institutions. The pressures from institutional constituents make the organisations more accountable both socially and economically. In a situation of competing interests of various institutional constituents, organisations often need to confront numerous conflicting pressures, which is a challenge for organisation to conform.

As far as LCD path is concern, the major influences in Bangladesh are channelled from international actors. Four pathways of influences through which international actors can influence domestic policy: international rules, international norms and discourse, markets, and direct access to domestic policy-making processes. Although all these pathways have either direct or indirect influences on Bangladesh to undertake LCD path, here ‘international rules’ have only been highlighted. The international rules focus on the pressure of issue-specific agreements, and the policy directions of influential international organizations (e.g. World Bank). These influences may be rested on consent or on coercion. As noted, Bangladesh has no legal binding to cut carbon emission. As such, influences to follow LCD path from this pathway is based on consent and indirect coercion. For instance, Bangladesh is currently undergoing the process of NAMAs. According to this policy agreement, developing countries can have mitigation fund from donors if they communicate with the UNFCCC mentioning mitigation plan. This is an economic incentive for the developing nations that influences Bangladesh to prepare NAMAs.

International powerful actors put coercive pressure on Bangladesh to invest more on carbon mitigation although the country’s priority is adaptation to climate change impacts. For instance, the MoEF has received indirect coercive pressure from the World Bank in connection to the Bangladesh Climate Change Resilience Fund (BCCRF), a major donor fund to address climate change. Despite the location of BCCRF in the MoEF, the World Bank remains the Secretary of this fund to manage regular activities. Such involvement of the World Bank undermines the ownership of the MoEF to the fund. Consequently, an inherent tension between the MoEF and the World Bank is prevailing with the utilisation of this fund. Evidently, where the absolutely domestic fund in Bangladesh (Bangladesh Climate Change Trust Fund- BCCTF) allots 20.54% for the theme mitigation, the corresponding figure in the BCCRF (43.63%) is more than double. This statistics indicates that the MoEF is getting an indirect coercive pressure to cut carbon emission.

Importantly, Bangladesh is highly dependent on foreign capital especially in the arenas of readymade garment industry (RMG) and foreign direct investment (FDI). In Bangladesh, trade in RMG sector has become a principal foreign currency earning source (78% of total export earning). Bangladesh is now the world second largest exporter of RMG. Because of the high dependency on the RMG, this country is on constant fear of losing global RMG market in the increased competitive globalised market. Similarly, as a developing country, remittance received from FDI is an important economic booster for Bangladesh. Therefore, to sustain RMG’s global market share and attract FDI, Bangladesh has been receiving significant influence from international rules in relevant to environmental sustainable business practices to comply.  

Moreover, domestic constituents have also significant influences. The civil society movement in Bangladesh is very active to protect the environment following LCD path. Many NGO/CBOs (civil society organisations) have taken very strong stance in this respect. They are raising awareness, organising people, advocating government in policy making and sponsoring civic movement against who are degrading environment.  All such activities have certainly significant influence on concern authority (e.g. MoEF) toward conformity to enhance their social legitimacy.

Context

In institutional theory, context refers to the circumstances within which institutional influences are imposed on organisations. Uncertainty and interconnectedness are two vital aspects of context that largely determines the resistance or conformity of organisations to institutional pressures. The institutional context around LCD is an uncertain issue. Climate change is a ‘wicked problem’ and therefore its likely solution is uncertain. LCD policy as a tool of mitigating climate change also remains in uncertainty. The uncertainties for LCD path especially for developing countries include generating climate change related appropriate country-specific data, technological innovation, transfer of technology and knowledge, and availability of finance for low-carbon projects. In Bangladesh, all these factors are very critical mainly because of low technological, human resource and financial capacity. High finance is involved in technological innovation and transfer of knowledge and technology that Bangladesh is still incapable to afford. Therefore, LCD path in Bangladesh is substantially dependent on donor money.

Certainly, though insufficient, a number of funding windows have been opened for Bangladesh because of its high climate-vulnerability and limited responsibility of carbon emission. This is, however, Bangladesh is facing challenges with the uncertainty of donor money. The reasons are: the actual disbursement of money is far below than the amount donors commit and the delay and conditionality of donor funds. For example, donors want to ensure financial accountability of their money and thereby proposed various reform measures as conditions that sometimes become difficult for Bangladesh to adopt in existing country context. As stated, the presence of World Bank in managing the BCCRF is one of such conditionality. This ultimately creates huge uncertainty with donor funds. 

Interconnectedness can be defined as the inter-organizational interactions in an organizational field. In Bangladesh, inter-organisational relations in environment management are very poor that remain a major challenge for LCD initiative. It is found that in Bangladesh both environmental related laws and policies lack specific operational guidelines for inter-organisational collaboration. For instance, the MoEF and PC are two central organisations to accelerate LCD path. The BCCSAP has taken an approach of mainstreaming mitigation and adaptation into the national development planning. However, the location of project management and fund governance authority on mitigation and adaptation remains in the MoEF where PC lacks authority. The coordination mechanism between the MoEF and PC is also limited. This is virtually a divergent approach of LCD path from central development. Therefore, it is difficult to ensure the success of LCD path unless well alignment between the MoEF and the PC is maintained properly.

Conclusion

Considering the institutional process by which institutional pressures are imposed on organisations discussed, it makes sense how prevailing institutional environment of Bangladesh has influenced to promote LCD path. The analyses demonstrate that economic incentive is the main motivating factors for which government has responded towards LCD approach. While all institutional constituencies’ influences are shaping organisational decisions regarding LCD, international constituencies are playing the major role because of the high dependency of Bangladesh on international aid and supports. Notably, in the present competitive pace of globalisation, Bangladesh’s major economic boosters are absolutely dependent on foreign trade and capital. Therefore, pressures from international constituencies in relation to trade and investment, and donor money are influencing much to conform to LCD approach. Despite above institutional causes and constituencies’ influences on LCD path, the concern organisations are facing significant challenges because of the high contextual uncertainties and poor organisational interconnectedness. Contextual uncertainties are found to be very complex because of the nature of problem (wicked problem), difficulties with donor money and government accountability, and inherent tension between donors and the MoEF for differing priorities. These complexities sometimes help maintain organisational ‘status-quo’ which is a challenge of LCD path in Bangladesh.

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