Effects of Climate Finance on Risk Appraisal: A Study in the Southwestern Coast of Bangladesh

Abstract EN

Utilising climate funds properly to reduce the impact of potential risks of climate change at the local level is essential for successful adaptation to climate change.

Climate change has been disrupting the lives of millions of households along the coastal region of Bangladesh.

The country has allocated support from its national funds and accessed international funds for the implementation of adaptation interventions.

With the focus of the scientific community on climate finance mechanisms and governance at the global and the national level, there is a lacuna in empirical evidence of how climate finance affects risk appraisal and engagement in adaptation measures at the local level.

This paper aims to examine how the support from climate finance affects risk appraisal in terms of the perceived probability and severity and the factors which influence risk appraisal.

A field survey was conducted on 240 climate finance recipient households (CF HHs) and 120 nonclimate finance recipient households (non-CF HHs) in Galachipa Upazila of Patuakhali District in coastal Bangladesh.

The results indicate that both CF and non-CF HHs experience a high probability of facing climatic events in the future; however, CF HHs anticipated a higher severity of impacts of climatic events on different dimensions of their households.

With higher income and social capital, the overall risk appraisal decreases for CF HHs.

CF HHs have higher engagement in adaptation measures and social groups and maintain alternative sources of income.

Climate finance played a critical role in supporting households in understanding the risks that they were facing, assisting them in exploring as well as enhancing their engagement in adaptation options.