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Prelude:

It is now quite well known internationally as well as in Bangladesh that the


global climate is slowly getting warmer due to emissions of greenhouse gases
(GHGs)i like carbon dioxide, Methane (CH4), Nitrous oxide (N2O), Hydro
fluorocarbons (HFCs), Per fluorocarbons (PFCs), Sulphur hexafluoride (SF6)
into the atmosphere. These gases are produced by human activities including
the burning of coal, oil and gas over the last two centuries since the beginning
of the industrial revolution and accumulated in the global atmosphere to
produce the so called ‘greenhouse effect’ which makes the earth behave like a
greenhouse and raises the temperature of the earth’s atmosphere. The
consequences of such global warming can be severe in different parts of the
globe and can include enhanced incidents of droughts, flooding, snow melt and
sea level rise. Bangladesh, as one of the most densely populated low lying
developing countries is likely to be severely impacted by any such global
warming that might occur in future.

Kyoto Protocol:

The GHGs are consider at least partly responsible for global warming – the rise
in global temperature which may have catastrophic consequences for life of the
Earth. For this reason, the United Nations Framework Convention on Climate
Change (UNFCCC) established an international treaty designed to limit global
greenhouse gas emissions in 1997, based on the principles set out in a
framework agreement signed in 1992, is known as “Kyoto Protocol”.

Targets of Kyoto Protocol:


i
Greenhouse gases includes: Carbon dioxide (CO2), Methane (CH4), Nitrous oxide (N2O),
Hydro fluorocarbons (HFCs), Per fluorocarbons (PFCs), Sulphur hexafluoride (SF6)

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Some 141 countries – who account for about 55% of greenhouse gas emissions-
have ratified the treaty, which pledges to cut these emissions by 5.2% by 2012.
Industrial countries have committed to cut their combined emissions to 5%
below 1990 levels by 2008-2012. Each country that signed the Protocol agreed
to its own specific target. European Union countries are expected to cut their
present emissions by 8% and Japan by 5%. Some countries with low emissions
were permitted to increase them.

Kyoto Protocol comes into force:

Kyoto protocol comes into force after two conditions had been fulfilled:

 It had been ratified by at least 55 countries.


 It had been ratified by nations accounting for at least 55% of emissions
from what the treaty calls ‘Annex 1’ countries – i.e. those given specific
targets for reducing emissions. These are the richer nations of the world.

Global Warming and Bangladesh:

Poverty is deep and widespread; almost half of the populations live on less than
one dollar a day. However, Bangladesh has reduced population growth and
improved health and education. The major employer is agriculture, but it is
unable to meet the demand for jobs. Thus many Bangladeshis - in common
with citizens from other countries in the region - seek work abroad, sometimes
illegally. The country is trying to diversify its economy, with industrial
development a priority. Overseas investors have pumped money into the
manufacturing and energy sectors.

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Bangladesh is a low carbon dioxide emitting country. For instance, the per
capita carbon dioxide emission is estimated at 0.2 ton/year, while the average
for developing countries is 1.6 ton/year. In USA the per capita emission is 20
ton/year. The low GHG emission status however provides no relief from the
effects of Global Warming because 1.5 meter rise in sea level would inundate
an area of 22,000 sq.km of Bangladesh, affecting 17 million people.

Table: Ranking of the industrial sectors (top five polluters)

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Source: www.earthtrends.wri.org

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Source: www.earthtrends.wri.org

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Figure: Annual air pollution by industrial sectors

Figure: Annual water pollution by industrial sectors

Obviously Bangladesh is likely to be one of the worst suffers of Global


Warming. The other impacts of global warming would be on: agriculture, bio
diversity and forestry, human health, fisheries, drainage, and fresh water.

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Effects of Kyoto Protocol:

Study shows that Small Scale Enterprise (SSE)ii generates about 80% of
employment opportunity in any underdeveloped and developed country of the
world. SSE provides a significant portion of national income. Presently, small
and cottage enterprises jointly contribute 37% to 40% of the total value added
to the industry sector of Bangladeshiii. On the other hand SSE supplying of raw
materials to the big and incubator enterprises for the production of goods and
services. Reducing greenhouse gas emissions by the amount demanded by the
Kyoto Protocol it’s make a huge impact to the SSE in Bangladesh. For this
reason so many SSE will shut down in a short time, that’s why destroy
2,400,000 jobs in Bangladeshiv. For this reason the unemployment rate will
grow up.

Reducing greenhouse gas emissions by the amount demanded by the Kyoto


Protocol would require new taxes on gasoline equal to 68 cents (42.84 TK) a
gallon or more. Alternatively, the government might sell permits to businesses
that produce greenhouse gases and allow them to shift the cost to consumers by
raising prices. Either way, all of us will pay higher prices for products requiring
energy to be produced or transported--in other words, virtually everything we
buy. Increase the price of electricity by at least 55%.

The new industrial Policy of Bangladesh (Appendix) states that an industrial undertaking
ii

engaged either in manufacturing process or in service activity within a total investment up to TK.
15 million and the investment in machinery and equipment not exceeding TK. 10 million
(excluding taxes and duties) is to be taken as a Small Scale Enterprises (SSE).
iii

Source: Bangladesh Bureau of Statistics 1998

Journal of Environmental Economics and Management (volume 50, Issue 1, July 2005, ISSN
iv

0095-0696, Page 59)

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Commodity Effects on Costs Effects on Profits
Corn + 31.7 % - 47.0%
Soybeans + 27.3% - 20.5%
Wheat + 26.4% - 57.2%
Cotton + 25.4% - 49.1%
Hogs + 10.3% - 84.5%
Milk + 7.5% - 53.1%

Source: The Kyoto Protocol and U.S. Agriculture,” The Heartland Institute, October 31, 1998

If the production cost rise up then many business organizations shot down in a
short time. On the other hand increasing the production cost, the price of the
product also rise up. For this reason middle class or the poor people can’t effort
to purchase the necessary goods.

On the other hand if the price of the product increases then automatically the
savings of the country decreases, and people take out their money from the
bank. For this reason the entrepreneur can’t take the loan from the banks. For
this reason the investments in the production sector in Bangladesh decrease.
For a developing country like: Bangladesh it’s bad to decrease the investment.

There are many companies in Bangladesh which are only export oriented.
When cost of production rise up then it’s make a huge impact on the export in
Bangladesh. For impact of Kyoto Protocol international agreement the price of
the product rise up then the foreign buyers go to the other country to purchase
product with a low price. For this reason we loss the foreign market. That
makes a huge negative impact in our foreign reserves. For this reason the GDP
in Bangladesh will go down.

Reducing the greenhouse gas emissions by amount demanded by the Kyoto


Protocol it’s make a huge negative impact in GDP on Bangladesh. That’s we try
to show in the following using a model (diagram):

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Kyoto Cost of
Protocol Production GDP goes down
Goes up

Export will be Industry will The investment


go down shout down goes down

Unemployment Savings
rise up Decreases

Diagram: Effect of Kyoto Protocol in Bangladesh

For the cause of Kyoto Protocol, the cost of the production will rise up. So that
the many export oriented firms and SSE will be closed in a short time. That’s
why the export goes down and unemployment rise up in Bangladesh. When
unemployment and cost of the product (price of the product) goes up then the
savings and foreign currency reserve of the country (Bangladesh) also
decreases. For this reason the investment of the country (Bangladesh)
decreases. This makes a grate negative impact in the Gross Domestic Product
(GDP) in Bangladesh. So that the GDP of Bangladesh goes down, this isn’t good
for Bangladesh.

Recommendation:

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The country still has a relatively small industrial base (including
manufacturing, construction, mining, and utilities) contributing about 26% of
GDP (2003-2004). The manufacturing sub-sector accounts for about half of
this contribution and it grew at a rate of 7.60% between 1972 and 2004.

Figure: Growth rates of important industrial sectors

There are increasing efforts to develop the industrial sector of the country by
both stimulating the local industries and attracting foreign investors. As a
result, the growth rate of the industrial sector is expected to rise. The growth
rate of the manufacturing sector has been projected to be 14.4% for the year
2005 (World Bank).

According to the following table we find that the GDP of Bangladesh is


continuously increasing, which is good for Bangladesh. But reducing the
greenhouse gas emissions by amount demanded by the Kyoto Protocol it’s
make a huge negative impact in the GDP of Bangladesh, which is bad for a
developing country like: Bangladesh.

2001-02 2002-03 2003-04 2004-05

GDP at current market prices (billion TK) 2,732 3,006 3,330 3,685

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GDP at constant market price (billion TK) 2,253 2,371 2,520 2,655
Per capital GDP at current market price (TK) 20,754 22,530 24,628 26,898
Per capital GDP at constant market price (TK) 17,112 17,772 18,637 19,382
Sector growth rate of GDP at constant price (%)
Agriculture 0 .01 3.08 4.09 0.32
Industry 6.53 7.26 7.60 8.55
Services 5.43 5.38 5.66 6.63
Investment at current prices (billion TK)
Private Consumption 458 517 594 683
Public Consumption 174 186 206 217
Domestic savings at current price (billion TK) 496 560 650 743
National savings at current prices (billion TK) 640 748 847 976

Source: Bangladesh Bureau of Statistics, June 2005

The Kyoto Protocol, international agreement which is setting targets for the
industrialized countries to cut their greenhouse gas emissions, but it comes into
force for the all the countries when Kyoto Protocol had been ratified by at least
55 countries, and It had been ratified by nations accounting for at least 55% of
emissions from what the treaty calls ‘Annex 1’ countries.

Kyoto Protocol is not good for the developing country like: Bangladesh where
the per capita carbon dioxide emission is estimated is only at 0.2 ton/year.
According to the Journal of Environmental Economics and Management if
each people plant 2 trees today then the after twelve years the emissions to 1%
below 1990. v

On the other hand UNFCCC need to think about the developing countries, the
Kyoto Protocol international agreement can be change in a way that those
developing countries the per capita carbon dioxide emission is estimated is only
at 0.6 ton/year they don’t need to follow the Kyoto Protocol.

On the other hand the UNFCCC can include another important issue in the
Kyoto Protocol International agreement that every year the developed
countries must import a fixed amount of goods/ readymade garments/ jute and
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Journal of Environmental Economics and Management (volume 26, Issue 1, July 2003, ISSN 0023-
0351)

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jute made goods/ fish/ leather products etc. That doesn’t make negative impact
the GDP of the developing country like: Bangladesh.

Bibliography:

i. Bhattacharya, D., Kabir, B. N. and Ali, K. 1995. Industrial Growth and


Pollution in Bangladesh: A Sectoral Analysis, Paper presented in the
symposium on "Environment and Sustainable Development with Special
Reference to Bangladesh", North South University, Dhaka.

ii. World Bank. 1997. Industrial Pollution in Bangladesh: A Detailed


Analysis, Workshop Discussion Paper, The World Bank Dhaka Office.

iii. Aaron Cosbey (2004). The Kyoto Protocol and the WTO, Seminar Note,
Energy and Environment Program, the Royal Institute of International
Affairs.

iv. Kyoto Protocol, targets of Kyoto protocol: www.unfccc.org

v. Kyoto Protocol comes into force: www.bbcnews.com/kyotoprotocol

vi. Source: Bangladesh Bureau of Statistics 1998

vii. Journal of Environmental Economics and Management

viii. Bangladesh Environment by: Lutfar M. Kabir

ix. www.earthtrends.wri.org

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