Human civilisation is at a very important crossroads. Our actions in the coming years regarding global warming will determine what sort of future is in store for us.
In this make or break scenario, the Paris Agreement, signed in 2015 to fight the effects of climate change, was a landmark deal.
The Agreement set up goals such as keeping global temperatures “well below” 2.0 degrees Celsius above pre-industrial times.
In order to achieve this goal, the treaty has aimed to reduce the amount of greenhouse gases emitted by human activities.
Countries must adjust their own level of emissions to reach the global goal. Therefore, it is essential to transition to renewable energy quickly to cut emissions effectively.
Political will and progressive policies are extremely essential in reaching the goals of the Paris Agreement. Bangladesh, as one of the countries most vulnerable to climate change, has shown both in the past.
As a result, there has been a surge in solar panel usage in the country.
Currently, 4.5 million homes run on the “solar home” system. There are eight solar mini-grids and 441 solar irrigation systems in use as well. Solar panels have spread electricity to areas where there was no electricity before, thus transforming the lives of the rural populations.
However, bad -- or rather, misguided -- policy can almost guarantee that we don’t reach the goals.
Bad policies will hurt
Even though Bangladesh has made significant strides in the renewable energy sector, more needs to be done.
World Bank data shows that the share of renewable energy in total electricity output has fallen sharply over the years. In 1990, 11.43% of total electricity output came from renewable energy, and now it is down to only 2.86%.
Whether we like it or not, our failure to promote the use of renewable energy will eventually hurt us severely, as we happen to be highly vulnerable to the negative effects of climate change.
While the government understands the importance of scaling up solar energy production -- and thus, judiciously set a target to generate 10% electricity from renewable energy by 2020 -- it is setting us back by imposing a 10% import duty on solar panels in the latest budget.
This decision will have a negative effect on the expansion of solar energy in the country. According to Engineer SM Sanzad Lumen, Deputy Dierector (Solar) of Sustainable and Renewable Energy Development Authority (SREDA), prices of imported solar panels will increase 30-40% due to this taxation.
The reason behind the government imposing tax on import of solar panels was to facilitate local manufacturers, but they can only meet the demand of home solar panels and irrigation. SREDA plans to generate 1,500MW electricity from solar energy from 2018 and the local manufacturers aren’t equipped for that.
A tax on imported solar panels will be nothing but a hindrance on our path to development
In fact, currently 80-90% solar panels are imported. Moreover, SREDA has already initiated plans to build power-plants with foreign investors. The investors signed on for the projects before the tax was imposed.
They planned to use the imported panels. Mr Lumen feels that the investors might be discouraged from investing when the cost of panels goes up.
For that reason, a tax on imported solar panels will be nothing but a hindrance to our path to development. It will derail Bangladesh’s progress towards achieving the goal of generating 10% of the total electricity output from renewable energy within 2020.
We can choose to be leaders instead
Bangladesh needs to take a leading role in bringing a green energy revolution. Then, Bangladesh can also demand the same commitment from the big polluters of the world.
In fact, Bangladesh almost took a bold step in this very same budget when it planned to impose a carbon tax.
However, in the end, the plan got cancelled due to concerns of the energy and transport lobbies about increased living costs.
Bangladesh is not a huge polluter with emissions at only 0.44 tons of carbon dioxide per person according to World Bank.
But imposing a carbon tax would send a message to the international community about Bangladesh’s commitment to fighting climate change.
World Bank projections show if Bangladesh imposed a tax of $5 on each ton of carbon dioxide, it could generate $2.4 billion annually.
However, SREDA feels that carbon tax is not necessary at the moment as SREDA has its own “Energy Efficiency and Conservation Master Plan up to 2030.”
It aims for 20% improvement of Bangladesh’s Primary Energy Consumption per GDP by 2030. The master plan includes financial incentives like subsidies, preferential taxation, and low-interest loans.
But the plan only has provisions for incentives for using energy efficiently. It states that providing subsidies and preferential taxation will be tough, because it would put an extra financial burden on the government.
On the other hand, if the government imposes the carbon tax, it would generate a huge amount of revenue, which could be used to finance the expansion of the renewable energy sector and to subsidise energy-efficient initiatives under the master plan.
Bangladesh government should make sensible, progressive policies like implementing carbon tax and withdrawing the tax from solar panels. Otherwise, our progress, so far, in the renewable energy sector will have been for nothing.
Tanjim-Ul-Islam is a Climate Leader at Climate Reality.
