Thursday, 23 March, 2023

State of Emission Trading in Bangladesh

Dr. Mohammad Reazul Haque

State of Emission Trading in Bangladesh
Dr. Mohammad Reazul Haque

Last year at the beginning of the monsoon, Bangladesh faced devastating floods in the Greater Sylhet region and other parts of the country. However, rainfall in rainy season was scanty. September also got much less rain than usual. On the other hand, we saw how wildfires devastated the USA and some other European countries. Besides, Pakistan and China faced much trouble with the floods. From all these unusual activities of nature, anyone can infer that we did much harm to Mother Nature, and it is taking its toll. These extreme weather conditions are due to our aggressive attitudes towards nature. We are not taking care of nature where we are living. If we continue exploiting nature, it would strike back more severely.

The use of energy has increased many folds in our country, though we are far behind many countries in per capita consumption. We are contributing a mere 0.3 percent of world carbon emissions. However, in recent years we saw a gradual increase in using electrical appliances. Even in remote villages, most houses have refrigerators. However, our increased energy use alone has not contributed to the environmental degradation in our country. It is a global issue. Pollution caused by a country can affect its neighbouring countries. Therefore, pollution from other countries is also responsible for the environmental degradation of our country.

Fossil fuels, such as coal, natural gas or petroleum, burning is contributing much to increasing greenhouse gases (GHGs) and thus causing global warming. Along with rising sea levels, global warming is contributing much to the unusual behaviour of nature, such as scanty monsoon rain, floods, droughts, cyclones etc. Therefore, there is a need to lower carbon dioxide emissions by minimizing the burning of fossil fuels. In this regard, emission trading or a cap-and-trade system, also known as carbon emission pricing, would be one of the solutions for reducing carbon dioxide emissions. It is to be noted here that emission trading is a market-based approach designed to reduce GHGs, primarily carbon dioxide, which contributes to global warming. In this trading scheme, the seller countries often less-carbon emitting ones are being rewarded for compliance with the commitment to reducing emissions, while the buyers, higher carbon emitting countries, have to pay a charge for polluting the environment. By providing economic incentives for controlling GHG emissions, carbon emissions trading is playing a significant role in achieving GHG emission reductions as well as reducing the demand for fossil fuels, which are responsible for 89% of all CO2 emissions and 68% of all GHG emissions.

Different states, countries and regions are opting for different action plans to reduce GHGs emissions. For instance, the New South Wales GHGs Abatement Scheme was formed in 2003 by the Australian state of New South Wales. Canada's provinces of Quebec and Nova Scotia run a carbon trading program. In 2021, China launched the largest global carbon trading system, the Chinese national carbon trading plan. The European Union Emission Trading Scheme (EU ETS), the biggest global program for the commerce of GHG emissions, was implemented in several EU member states in January 2005. Trading started in 2014 in India as well under a required energy efficiency trading program that covered eight industries that accounted for India's industrial energy usage of 54 percent. Japan also has a voluntary emissions trading scheme. New Zealand operates under the New Zealand Emissions Trading Scheme (NZ ETS). South Korea, which has pledged to cut GHG emissions by 30 percent by the year 2020 compared to the business-as-usual scenario, has the second-largest carbon market after the EU ETS. The US has no national emissions trading scheme. However, different states and regions are committed to forming a cap-and-trade carbon dioxide emissions program. Additionally, there are examples of a successful cap-and-trade system that was implemented in accordance with the US Acid Rain Program to reduce sulphur dioxide emissions in North America. Moreover, Bhutan achieved the Carbon Neutral country status in 2011. It is one of the few such countries in the world and affirmed to remain carbon neutral in the Paris Agreement in 2015, though has substantial pressure to increase GDP and GNH to become a middle-income country by 2023.

A study revealed that assuming higher growth in Bangladesh, the projected carbon dioxide emission would be 913 Mt in 2050. Yet, the emission would be about 16 percent of what the United States is currently emitting. From this trend, it can be assumed that the carbon emission of our country is gradually increasing. However, that may not reach an alarming level since we are emitting much less per capita carbon dioxide. In spite of that, Bangladesh is installing renewable energy plants. Moreover, to improve Kiln Efficiency in the Brick Manufacturing Industries in Bangladesh, Industrial and Infrastructural Development Finance Company Limited (IIDFC) has initiated a Clean Development Mechanism (CDM), which will significantly lower carbon dioxide emissions. This initiative fostered by IIDFC not only contributed to lowering GHG emissions but also to Bangladesh's adoption of new, environmentally friendly and sustainable technologies. In addition, utilising energy-efficient modern technology in the brickfields will enable Bangladesh to produce and export eco-friendly bricks. Therefore, Bangladesh can benefit by following Kyoto’s flexible mechanisms like CDM, afforestation, environment-friendly technologies and better equipment, and thus attracting foreign investment is much needed for becoming a developed nation.


The writer is an Associate Professor,

Department of Chemistry, Chittagong

College, Chattogram.

Email: [email protected]