Incentivise greener industries

Concerns about how industry impacts the environment are growing. The manufacturing sector is one of those that is subject to a lot of scrutiny, thanks to the input and output of materials and potential waste that is created in the process.

Rapid and extensive industrialization has been one of the leading causes of global environment pollution. Black smoke spewing chimneys and noxious effluent emitting manufacturing units are potent symbols of the long carbon footprint of industries. However, with increasing realization that for the earth and the humans to survive and flourish the environmentally damaging aspects of the industries need to become things of the past. In this context we welcome the initiative by HSBC who has recently partnered with Bangladesh Economic Zones Authority (BEZA) and Brac to build a Green Economic Zone in Mirsarai. The collaboration will ensure over 40,000 mangroves plantation across 10 acres of coastal land in Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN) at Mirsarai. The mangrove plantation is estimated to capture 492 tons of carbon each year. HSBC will also support Covid-19 awareness campaign and skills development program in the Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN).

‘Greening’ investments are critical. The only way to reconcile investments with sustainability and avoid excessive social/health costs is to make them ‘greener’ from the beginning. For this, stronger regulation and enforcement are needed. Regulatory approaches must be complemented by incentives, economic tools, fiscal policies, and financing.

The cost of environmental damage in this country, and the rest of the globe, is enormous. Every year, the economy suffers huge losses due to various climate change events and escalating shortage of natural resources. Environmental concerns expressed by international buyers and other stakeholders have increasingly caused industries to give greater emphasis to environmental performance. Adoption of cleaner production methods has yielded financial gains independent of advantages in facilitating regulatory compliance. Local industries, not just exporters, can cut production costs by using cleaner production, which involves making changes in production processes, products, and services that enhance the efficiency of resource use and reduce environmental risk and liability.

The banks here can provide green loans at low interest rates to industries taking steps to mitigate their detrimental environmental impacts. They can also attract environmentally conscious consumers by providing loans for green housing or hybrid car loans on comparatively lower interest rates. A surge in the area of green financing can minimise the various international pressures arising from international environmental agreements and from organisations like IFC for accelerating green banking adoption.

It is very unfortunate that be it killer heat wave or abrupt changes in rain patterns causing immense destruction, care for the environment remains out of public and private discourse in this country.

One of the most appealing benefits to embracing sustainable manufacturing is the way that it can lower costs for businesses in the long run. Whether industries begin using renewable energy, such as solar power, to offset the use of more expensive traditional sources, or relying on smarter technology to better regulate your energy consumption, you will begin to see a reduction in your overheads. Though there is often an upfront cost for switching to greener options, these technologies usually have a relatively short payback period. Sustainable practices can also help the industries become more efficient with materials, giving much better value for money. In turn, with less waste to deal with, disposal costs will also decrease. Also eco-friendly measures can help industries gain access to new markets that are only open to businesses demonstrating sustainable credentials.

There needs to be revision of national environment quality standards. The authorities concerned should strengthen and expand cleaner production centres. Bangladesh needs to design a greener tax regime that includes, for example, pro-growth, pro-poor environmental and carbon taxes, and the elimination of environment damaging subsidies. It also needs to have a better financing regime for industries and small and medium enterprises. Green financing makes access easier for environmentally responsible enterprises and activities. The key to the successful strategic implementation of the vision of green industry is the creation of synergy within the different components of the system.