Daily Archives: June 4, 2021

A pressure gauge at an underground gas storage facility in the village of Mryn north of Kyiv. (REUTERS/Gleb Garanich)

American tech guru Alan Kay famously stated that the best way to predict the future is to invent it. This is the kind of thinking required to revamp entire energy ecosystems. In Ukraine, we have been debating the countrys energy future ever since independence. There has never been any shortage of ideas. Instead, Ukraine has lacked consistency of vision and continuity of implementation.

It takes many years, if not decades, for a nation to achieve a truly systemic transformation of energy policy. The key to success is not billions of dollars or technological prowess, but a shared vision within the political community. When this vision exists, successive administrations are able to build on the work of their predecessors rather than starting anew after every change in government.

For the US, this vision was energy independence. For Norway, it was all about preventing the countrys energy riches from becoming a resource curse, while for Poland, the goal was ending reliance on Russian gas.

In Ukraines case, the most appealing vision would involve inextricably fusing the countrys energy infrastructure with the wider European system. This would allow both parties to benefit from a range of complimentary features which are especially self-evident in the natural gas sector.

There are three gas-related objectives in particular that I would highlight for Ukraine: regulatory harmonization and deeper infrastructural interconnectivity with our EU neighbors; continuity of international transit; and transition towards decarbonized gas production and transportation using existing infrastructure.

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The gas queues of the 1970s, which were triggered by an OPEC embargo on oil exports, have remained imprinted on Americas collective imagination and have helped fuel the countrys drive for energy independence. It may have taken nearly five decades, but according to the IEA, the US surpassed Russia as the worlds largest natural gas producer in 2011, and overtook Saudi Arabia seven years later to become the largest petroleum producer.

Much of Americas success has been attributed to the fracking revolution. But this technological breakthrough did not occur in a vacuum. The ambitious goal of energy independence has guided several generations of US politicians. It has encouraged them to fund research, stimulate domestic production, and keep international trade routes open to guarantee supply stability and market competitiveness.

Norway faced the altogether different energy challenge of converting the energy bonanza of 1970s gas discoveries into a source of national wealth rather than ruin. The Scandinavian country gets top marks for the way it has fended off a potential resource curse.

Formerly known as a fishing-based economy in the backwaters of Europe, Norway is now among the worlds top three richest countries. The government doesnt squander earnings from gas exports. Instead, revenue is collected in a sovereign wealth fund that serves to guarantee a prosperous future for all Norwegians, and a stabilization fund that shields the countrys energy sector from commodity cycle volatility. Valued at over a trillion US dollars, this is the largest such fund in the world.

Despite supplying a quarter of the EUs gas imports, Norway is second only to Iceland in its use of renewable energy (78% and 75% respectively). Energy consumption per capita in energy-rich Norway continues to decline year after year.

Much closer to home, Polands example is perhaps the most pertinent for Ukraine. The two neighboring countries have considerable first-hand experience of the Kremlins attempts to weaponize energy supplies. As Russian military aggression against Ukraine escalated in April 2014, Polish PM Donald Tusk summed up the view from Warsaw. Regardless of how the standoff over Ukraine develops, one lesson is clear: excessive dependence on Russian energy makes Europe weak, he noted.

Russia has cut off gas supplies to Ukraine more than once in the past, leaving a lasting impression on the numerous EU countries that were also affected. This vulnerability had far-reaching political and national security implications which Poland, quite rightfully, resolved to address.

In 2015, the first Polish LNG terminal was inaugurated in winoujcie, with plenty of space for further expansion. Another terminal is planned near Gdansk. Crucially, the twenty-year-old idea of a direct connection to access Norwegian gas is now coming to fruition.

Polands Secretary of State for energy infrastructure, Piotr Naimski, recently summed up the countrys progress. The construction of a gas pipeline from Norwegian fields to Poland is in its final stages. This complements the implementation of the strategy for diversification of gas supply sources and directions. On 1 October 2022, gas will flow from the Norwegian shelf to Poland.

The examples of Poland, Norway, and the US unequivocally demonstrate what can be achieved when clarity of vision is matched by consistency of implementation. In Ukraines case, the ever-shifting geopolitics of the countrys gas policies has consistently undermined efforts to establish long-term strategies.

It is clear that today, our highest priority should be the preservation of gas transit through Ukraine. This is a pillar of our national security. Ukraine cannot afford to lose transit at a time when we are faced with a major Russian military buildup on the countrys borders.

We must seek to increase domestic production of natural gas, as the US has done, while lowering the carbon intensity of our economy as per the Norwegian example. In combination, such measures could turn Ukraine into a gas exporter. However, we must also take a number of constraining factors into account such as time, investment capital, and technology transfer issues.

In the immediate future, we should seek to accelerate regulatory harmonization and infrastructural interconnectivity with Ukraines European neighbors in order to achieve higher security of gas supplies, which comes with the diversification of transit routes. Poland has demonstrated the way forward in this regard. Given the size of Ukraines energy market and the countrys unmatched gas storage capacities, closer integration would be a win-win for the EU as well as Ukraine.

The next step is to leverage Ukraines unique advantages such as existing energy infrastructure, nuclear power, wind, solar, and other renewables in order to become a European leader in the field of decarbonized gases.

Energy transformation in Ukraine is possible. To make this vision a reality, we must first define it and commit to consistent implementation, election cycles notwithstanding.

Olga Bielkova is director of government and international affairs at Ukraines gas transportation system operator GTSOU and a former member of the Ukrainian parliament (2012-2020).

Thu, May 20, 2021

The Biden administration has this week announced a mixed bag of sanctions and waivers concerning the Nord Stream 2 pipeline, leaving opponents of Putins pet energy project confused and alarmed.

UkraineAlertbyDiane Francis

The views expressed in UkraineAlert are solely those of the authors and do not necessarily reflect the views of the Atlantic Council, its staff, or its supporters.

UkraineAlert is a comprehensive online publication that provides regular news and analysis on developments in Ukraines politics, economy, civil society, and culture.

The Eurasia Centers mission is to enhance transatlantic cooperation in promoting stability, democratic values and prosperity in Eurasia, from Eastern Europe and Turkey in the West to the Caucasus, Russia and Central Asia in the East.

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Ukraine's energy future is tied to European integration - Atlantic Council

In fact, holding it up as an all-in-one solution may lead us to ignore some of the concepts shortcomings and especially many of the fundamental questions about absolute production and consumption levels.

Todays industrial production and consumption driven by a growing global middle class uses more re- sources than the planet can sustainably provide. One reason for this is the linear way we use materials and products. We live in a throwaway society, especially since the middle of the last century with the success story of plastics providing us with convenient products at a reasonable price but of course plastic is not the only problematic area. Among the results of the linear economic system are the depletion of resources, a huge biodiversity and habitat loss, waste streams that leak or flow directly into natural ecosystems, and alarming levels of pollution and effects on the environment along the whole product life cycle.

These negative effects have not gone unnoticed by company leaders, consumers and politicians. Especially company leaders have been looking for new production and business models minimizing risks connected with access to raw materials, customer expectations on pollution and climate change, national laws and interna- tional standards; and all of this while ensuring revenue and profit growth for the company as well as increas- ing consumption.

The concept of Circular Economy (CE) has emerged as a promising approach to solve some of these challenges. Though the concept of Circular Economy comes with three main pillars (reduce, reuse recycle), conversations in the industry and in policy making often reduced it to just recycling, see e.g. the Report to the European parliament on the implementation of the Circular Economy Action Plan (European Commission, 2019). Reusing materials after they have served their purpose in a current product is smart and effective: it reduces waste and it reduces the need for primary material in the production of a new product. Over the last thirty years many different recycling systems have been set up and a variety of Life Cycle Assessment (LCA) studies have shown that recycling leads in many cases to a relevant reduction in environmental burdens. For materials like aluminium and other metals, the reduction is by factors of up to ten, for others, like glass, there are reductions by about one third. An important condition for the CE approach is to avoid or at least minimize persistent pollutants, like heavy metals or POPs, so that they do not remain in the recycling-loop and harm humans or the environment. Therefore, the advantages are twofold and the CE movement, institutionalized by the Ellen MacArthur Foundation, has gained many signatory companies and convinced many consumers. Sometimes the impression arises that recycling was invented in the last decades. However, materials such as metals, glass, paper or textiles have been recycled and reused for centuries or thousands of years, also because of the scarcity of these products.

CE is a conceptual way of thinking about our economic system and is often compared to how nature works. It is an important and valid concept, because recycled and reused materials tend to have lower environmental impacts than primary materials, and avoiding harmful substances is an important issue. It is therefore crucial that the concept of CE has become an important issue and has gained high acceptance in society, probably also because it is associated with the promise that no restriction of consumption is necessary as long as everything is being recycled (Braungart & McDonough, 2014). Recycling is widely regarded as a guarantor of sustainable development and, accordingly, the recycling rate and the recycled content as its yardsticks. In this context, it we sometimes forget that there is no material system in our economy that runs as a circular economy. Energy and additional raw materials are always needed, because quality is often reduced through each cycle, leading to environmental impacts and costs, even for products typically celebrated for their circular economy potential such as the glass bottle. Furthermore, the aim of the EU CE package is not to protect recycling rates, but rather to reduce environmental impacts, create jobs and provide the economy with as many indigenous resources as possible. Although recycling can contribute to these goals, there are many cases where these goals can be far better achieved through other measures. This is because no material is produced to be recycled, but to fulfil a specific function. This benefit can be much higher than the burden of producing a material. Typically, the protective function of a packaging is much more relevant than the burdens caused by the manufacture of the packaging, which often represents only a fraction of the environmental impacts and costs compared to the packaged good. This has been shown, for example, by the investigations on food from Denkstatt (Pilz, 2016), Carbotech (Dinkel & Kgi, 2016), Williams & Wikstrm (2011), UNEP (Flanigan u. a., 2013) and others. Therefore, the best packaging is the one providing the optimal protection to the packed goods with the lowest environmental impacts. Recycling can make a positive contribution to this, as e.g. the aluminium can with recycling rates of 90 % and more shows.

However, focusing only on recyclability does not do justice to the need for a holistic approach and can lead to false conclusions and even worsen the environmental impacts. Optimizing the recyclability of materials can be at odds with the most material-effective product design. A good example here is in packaging, where recyclability often means using mono materials and meeting the necessary handling requirements. However, flex- ible packaging, which is extremely lightweight and uses minimal material, has a lower environmental or carbon footprint in many applications than comparable recyclable rigid packaging, if compared over the whole life cycle, even if it is not recyclable. The German institute ifeu has shown that with a shift from rigid to flexible packaging, the environmental impacts can be reduced, even if the rigid packaging is recycled and the flexible packaging is not recycled (Wellenreuther, 2019). Similar results are reported in a study on beverage packaging for the Swiss Federal Office for the Environment (Dinkel & Kgi, 2014) or in a presentation by thinkstep (Kieselbach, 2019). These studies have shown that applying the CE concept single-mindedly can lead to undesirable outcomes. Even the Swiss association for the recycling of household waste, Swiss Recycling, has analyzed its systems and found that recycling rates are not the best indicator for measuring its environmental performance (Swiss Recycling, 2017). This year they presented a new indicator system developed together with ETH and Carbotech based on LCA and Costs to evaluate goals and the achievement of these objectives (Haupt & Hellweg, 2019; Swiss Recycling, 2019).

The danger of making the wrong decisions when focusing on recycling is not only evident in the packaging sector. A study on the environmental impacts of an average Swiss citizen has shown that most of the burdens from a Swiss household come from food production, heating and transportation (Froemelt u. a., 2018; Jungbluth u. a., 2011). For these relevant topics, recycling can only make an insignificant contribution and

therefore tends to misguide consumers to have made a significant contribution to sustainable development through recycling (IPSOS Mori, 2011).In summary, the CE concept can lead to a reduction of environmental impacts and raw material consumption. However, there is also a big risk of a rebound effect because recycling, the one pillar the industry and politics is concentrating on, is not addressing some of the fundamental questions of production and consumption levels, like economic and social effects or rebound effects, see among others (Bening u. a., 2019). The Circular Economy concept alone will never be enough to achieve a more sustainable society. Rather, it implies that companies can further increase their output because the better we design our Circular Economy system, the faster it can spin without losing material. Notwithstanding that recycling also uses energy and other resources, it is connected with losses and can lead to inefficient solutions.

To overcome this problem and to avoid or minimize these shortcomings, additional and holistic approaches going far beyond recycling rates and recycling content must be considered to sustain our resources, our environment and our economic system. By holistic, we mean an approach that links the various concepts in such a way as to achieve a high reduction in environmental impacts as well as benefits for society. In addition, it is important that this approach is not limited to a rich country/people perspective but includes also the perspective of the global South. To reach this, it is necessary to develop a target system for the EU within the framework of a joint project, which includes the whole concept of CE, and to focus even more on minimizing environmental impacts, material losses and increasing resource efficiency.

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Extension of circular economy to achieve a more sustainable society - RECYCLING magazine

If you've been shopping for building materials lately, you might have noticed that prices have gone up: wood panel products that would have cost you maybe $14 a year ago will now set you back $35 or $40. The pandemic has had a number of effects on the wood products industry.

To learn more about them, Morning Edition Host Jennifer Mitchel spoke with Patrick Strauch, executive director of the Maine Forest Products Council.

Jennifer Mitchell: So Patrick, what is the deal with lumber prices right now? Why are they so high even in a place like Maine that has, you know, lots of trees around?

Patrick Strauch: Yes, I can speak from firsthand experience: I'm trying to build an addition on my house. COVID caught a lot of people off guard, of course. There's no way to predict that kind of event, and I think what you found was that we didn't have the manufacturing capacity to keep up with that demand. We had the wood resource. We had the loggers available to cut the wood. But we just didn't didn't have the capacity to come online fast enough to produce the lumber in the panels that were needed.

So where did this last year leave Maine's forest products industry, then? If we didn't have a huge capacity for finished lumber that suddenly everyone wanted, but we do have a lot of trees and a lot of product out there, what happened to it all, and where did it go?

We're also part of a pulp and paper economy that affects everyone as well. It's all inter-related. The mills in Maine that were still making writing paper and printing paper, they were losing markets because of the long-term trend with electronic communications. And a lot of them were converting over to paper packaging products and cardboard type products and tissue paper: a mill in Woodland had tissue paper.

So those mills were strong, but we still had a lot of dependence on media papers. And that market started to go south very quickly. And it started to create a surplus of wood that was already cut and on the market.

And then that was compounded by the digester in Jay, the Pixelle Specialty papers digester, erupting. And that took out a major pulp and paper mill in the wood basket. So all of a sudden, we had a lot of wood on the market. So we had a surplus amount of wood, high demand for lumber, not enough capacity to really take in all that wood. So loggers were still left waiting and landowners waiting for the markets to adjust. And it's only recently that we've seen that surplus amount of wood kind of start decreasing and therefore the price of logs and pulp wood is adjusting.

So what about the future? You'd mentioned paper products like cartons, packaging, cardboard, things like that: obviously, we don't have any numbers yet, but it seems like this past year might have been a pretty bullish year for those kinds of products because of the pandemic and everybody shopping online and having takeout and things like that. But what did you learn over the pandemic year about what maybe needs to change? Or is the wood products portfolio, I suppose, diverse enough for what we know going forward?

Yeah, I think there's been a recognition that we needed to diversify our portfolio. If we think of ourselves, the state, as a business, and we want to stay in forest products, that's really what we need to do. Fortunately, there are market trends that are really supporting that kind of concept. A lot has to do with climate change.

And climate change is forcing us to take a look at what are the materials we use, can they be recycled? Is there a way to get off of petroleum-based products and move into more biodegradable products? And that opens up a lot of possibilities.

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From Mill Explosion To Pandemic, Maine's Wood Products Industry Had A Rocky Year - Maine Public

By Siphelele Dludla 15h ago

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THE RAND surged to its highest levels in 26 months during early trade yesterday, testing the R13.50-mark against the US dollar on prospects of a global economic recovery.

However, the domestic currency retreated slightly and was 0.05 percent higher to R13.60 against the greenback at 5pm after the dollar inched higher following upbeat US jobs numbers

Private businesses in the US hired 978 000 workers in May, the highest reading since June 2020 as the labour market continues to recover amid a rapid reopening of the US economy.

The positive risk sentiment on the rand had kept the greenback on the back foot and saw US bond yields decline before the dollars slight recovery.

TreasuryONE currency strategist Andre Cilliers said a sustained break of the R13.50 level could see the rand target R13.35 in the short term.

The rand continues to outperform its emerging markets peers as commodity prices remain elevated and good resource-based exporter dollars flood the local market, Cilliers said.

The current rand levels are almost unbelievable, considering where it traded a year ago when the country was deep in the Covid-19 pandemic and its associated lockdown restrictions.

The rand has gained 20.1 percent against the dollar over the past 12 months, 11.8 percent over the past 3 months, and 3.8 percent over the past month.

President Cyril Ramaphosa even commented on the rand performance yesterday, saying it was at its best levels since 2019. He said it was outperforming the currencies of South Africas major trading partners, aided by high commodity prices.

Our favourable position as a commodity producer should attract capital inflows and boost the fortunes of domestic producers as well as retailers, Ramaphosa said.

Citadel Global director Bianca Botes said the key main themes driving the rand strength yesterday were the weak US dollar and the commodity supercycle.

Botes said the record stimulus deployed by the US government to fight the Covid-19 pandemic over the past year had led to excess liquidity in the capital markets.

She said this drove investors to assets such as the rand regardless of the underlying risks.

The dovish stance by the Fed continues to plague the dollar, assisting the rand to gain momentum, Botes said. And while many analysts argue that we will not enter a super cycle, the strong commodity process are beneficial to the rand, and other commodity driven currencies.

When comparing commodity cycles with the local currency, the correlation between strong commodity prices and a strong rand cannot be disputed.

Botes concurred that there was likely to be a correction in the rand in an environment of tightening of global monetary policy and the looming risks ahead.

While many articles elude to a stronger rand, closer to levels of R11, many analysts agree that the rand should be trading closer to the R15 (level) as we approach the third and fourth quarters, she said.

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Stronger rand tests R13.50 mark to the dollar on improved global prospects - IOL

ByChris Farrell, Next Avenue

An Age Friendly Workplace Initiative workshop for the Logan County Economic Development Corp.

Enjoyed a meal with friends at a restaurant recently? Booked a trip for your summer vacation? You don't need government data to see that the economy is gathering momentum with the Covid-19 vaccine rollout; Wall Street and Corporate America are exuding confidence about it. Yet not everyone shares their optimism, including experienced workers with good reason.

The question that haunts older workers is this: Will employers embrace them as things rebound or willageist stereotypesdeny them job opportunities?

A recent McKinsey & Co. report suggests many fear the latter. The consulting firm surveyed 25,000 Americans this spring and among the most unambiguous findings were that respondents believe age would negatively affect job prospects. Specifically, 61% of those 55 to 64 felt that way, as well as 54% of those 65+. That compares to 19% among those 25 to 34 and 38% for the 35 to 54 cohort.

Colorado offers "a good test market" to gauge employer willingness about hiring and keeping older workers, says Rochelle Salem, executive lead for strategic partnerships at Gavin Heath, a recruitment and talent acquisition services firm based in Denver.

The Rocky Mountain state boasts the nation's second fastest growth rate of people 65 +, a combination of ones aging in place and retirees moving there. One-in-four Coloradans 65 and older were in the labor market before the pandemic.

And Colorado stands out for the infrastructure it built in recent years on the foundation of convincing employers about thevalue of experienced workers. As in many states during the pre-pandemic economic expansion, employers in Colorado back then increasingly complained about the lack of qualified workers. So, private foundations, nonprofits and Governor Jared Polis' office responded by making the business case to employers to retain and hire experienced workers.

This older-worker ecosystem went into suspension during the pandemic, but it remains in place.

"Unlike states that focused more on long-term care and health care and other traditional aging topics, here we had a focus on workforce," says Janine Vanderburg, head of Changing the Narrative, a campaign to alter the way people think, talk and act about aging and ageism. "I am optimistic that despite post-pandemic worries, Colorado will be in the forefront of older workers."

Her optimism reflects insights from a tantalizing moment just before the nation went into Covid-19 lockdown.

On February 27, 2020, the nonprofit Transamerica Institute hosted aconference in Denver showcasing best practices for recruiting and retaining experienced employees. It presented research findings from the Colorado's Above-Fifty Employment Strategies (CAFES) initiative led by Brian Kaskie, a professor in the College of Public Health at the University of Iowa.

Polis opened the event and local human resource professionals, corporate executives and others interested in older workers attended.

At the time, employer interest was largely driven by one economic reality: the state's then low unemployment rate of 2.4%. Employers needed workers.

"They were saying, 'I have jobs, where do I find these older workers?'" recalls Karen Brown, CEO at iAging, a Denver consulting firm. Adds Catherine Collinson, CEO and president of the Transamerica Institute: "I felt we were on the brink of greatness."

Then the pandemic hit, the state's economy pretty much shut down and, naturally, employer interest in hiring experienced workers vaporized.

In addition, the CAFES study found that even before Covid-19, an aging workforce wasn't high on the list of concerns of business leaders and human resource departments. Only about half the organizations surveyed had programs allowing employees to retire and then come back to work part-time; very few offered phased retirement.

"No policy or program has caught fire [among employers]," says Kaskie. "They're dipping their toe in the water."

But there may be an opening now to change employer perspectives about older workers in Colorado and around the country.

Many organizations have been struggling to create a more diverse and welcoming work environment. These efforts gained primacy with the harsh spotlight the pandemic pointed at long-simmering inequities, as well as the social unrest unleashed after the murder of George Floyd by a former Minneapolis police officer.

"We're having a diversity, equity and inclusion (DEI) moment in the workplace," says Kaskie. "We want to bring age into that too."

Adds Dan Steele, chief operating officer and president of Gavin Heath: "The last couple of years, the push with DEI has been helpful."

Stories matter. Amplifying the positive business impact of older workers can help persuade other employers to see the potential from having older workers on the payroll.

Collinson highlights the example of Home Instead, a global caregiving franchise company headquartered in Omaha, Neb. that's been supportive of efforts to change the older worker narrative. It's built retaining and hiring older workers into the firm's business model and strategic planning.

About one-third of Home Instead's caregiving workforce is 60 and older. (Five generations work at corporate headquarters in Omaha.)

"We're employing very diverse people, including older adults," says Jisella Dolan, global chief advocacy officer for Home Instead. "Ageism is the last frontier of diversity, equity and inclusion that has to be eradicated."

Along these lines, Kaskie and Collinson and her team took advantage of the pandemic slowdown to work on a new online employer platform highlighting the business case for hiring experienced employees and showcasing age-inclusive management strategies employers can use to compete for talent. Its Age Inclusive Management Strategies in Colorado conference is on June 17, 2021. (Bonus alert: author and Next Avenue columnist Kerry Hannon is the keynote speaker.)

Still, the value of Colorado's older-worker infrastructure in making a genuine difference going forward largely depends on employment growth. With a low unemployment rate, management will likely realize it can either lose business or embrace experienced workers.

That was certainly the case in early 2020, when Colorado employers became increasingly receptive to arguments about the value of experienced workers as a way to help solve their labor shortage worries.

Despite the uncertainty inherent in any economic forecast, odds are that employment growth will be strong in 2021 and next year (if not longer) in Colorado and around the country.

"I believe the economy will come roaring back," says Collinson. "To fill positions, employers will embrace the business opportunity of the older worker and the power of the multigenerational workforce."

We'll see. Many employers still haven't adjusted to the aging of the population and the workforce and ageism remains powerful.

Fingers crossed that the learning curve during the economic expansion will be shorter in Colorado, thanks to the older-worker ecosystem. Success in Colorado could then help change the experienced worker dynamic elsewhere and fast.

Original post:

How Colorado Is Tackling Age Diversity In The Workforce - Forbes

Shamsul Alam | Published: June 04, 2021 20:13:07

The Sustainable Development Goals (SDGs), also known as the Global Goals, were set by the United Nations in 2015. SDGs are considered the universal calls for ensuring that each person in every corner of the world relishes the benefit of development and lives in peace and prosperity. UN member states have adopted the SDGs and recognised the need for a balance among social, economic, and environmental sustainability. The countries have pledged to "Leave No One Behind" and fast-track progress for those furthest behind first. SDGs are intended to achieve a better and more sustainable future for all, address the challenges our world and the people in it face every day. These goals bring the world to several life-changing zeros, including zero poverty, hunger, discrimination against women and girls etc. There is no doubt that these are ambitious targets in every context and thus, the creativity, know-how, technology, and financial resources from all of society will be necessitated to achieve them.

Bangladesh, as a signatory of the Global Agenda for Sustainable Development, is committed to achieving the SDGs by 2030. The country, as an active contributor to the global discourse for implementing SDGs, is continuously putting efforts into achieving its sustainable development aspirations. It has taken two important steps towards implementing the SDGs. First, the Government of Bangladesh (GoB), for better policy guidance, has completed all the preparatory works such as integration of SDGs in the national plan, mapping of ministries and divisions, SDGs M&E framework, SDGs financing strategy, SDGs action plan, and 39+1 national priority indicators. Second, the country is working on disseminating the produced knowledge among the relevant stakeholders and implementing SDGs at the local level. These are expected to be the important building blocks for achieving the SDGs.

Nevertheless, there are two major challenges in achieving SDGs in Bangladesh. One is to engage related stakeholders in the process of materialising SDGs. To overcome this challenge and recognising the fact that SDGs are overarching, the GoB has adopted the "whole of society" approach and involved the private sector, NGOs, CSOs, think-tanks, academia, and the media in the implementation of SDGs. Besides, the General Economics Division (GED) of Bangladesh Planning Commission has developed an SDG Localisation Framework. The primary aspiration of SDGs, Leave No One Behind, remains at the core of this framework. The framework offers a set of strategies that will enable the local government institutions to take part in the process of local implementation of SDGs in Bangladesh. It also provides an opportunity for the local people to participate in the accomplishment of the SDGs at the grassroots level. At the same time, the localisation process also relates to how the SDGs can provide a framework for local development policy.

Another notable challenge for Bangladesh is to mobilise resources to finance SDG implementation. Lack of resources can burden realising the SDGs in Bangladesh. The "SDG Financing Strategy: Bangladesh Perspective" prepared by the General Economic Division (GED) of the Planning Commission estimates that Bangladesh will need an additional USD 928.48 billion for attaining the SDGs during the implementation period. According to the same report, on average, 85.1 per cent of the financing should come from domestic sources where 42.1 per cent will be financed by the private sector. The public sector will require to contribute 33.5 per cent to the total financing.

The effectual implementation of the 'whole of society' approach with a special focus on private sector investment by the government and expansion of the economy's tax base will play a critical role in reducing financial gap for SDGs implementation. However, as the implementation of SDGs goes forward, just stimulating growth in private investment will not be enough. Bangladesh will need to learn from the successful experiences of other countries and put efforts into designing innovative financing strategies for managing and mobilising required resources from public and private sources.

Bangladesh has lately introduced some innovative solutions to create incentives, especially for the private sector, to promote financing for inclusive development. For example, the country has introduced the Shariah-based bond "Sukuk" in December 2020 as a new investment tool to promote Islamic finance and attract local and foreign direct investment. The purpose of the Sukuk is to raise BDT 80 billion to implement a safe water supply project titled "Safe Water Supply for the Whole Country".

Bangladesh has also approved its first green bond to finance environment-friendly projects including renewables. Bangladesh Securities and Exchange Commission (BSEC) has already approved a Non-Governmental Organisation (NGO) named Sajida Foundation to raise money from the capital market by issuing green bonds. The bond will be issued to institutional investors, insurance companies, corporate entities, and prosperous individuals through private placement. The value of the bond is BDT 1 billion for a tenure of two years. The fund raised from the green bond will be used to enhance the micro-credit operations and ensure environmental development.

Though there is still a long way to go, the bond market in Bangladesh is taking a shape. There is an appetite for new types of bonds in the market. A recent example is the introduction of the Sukuk bond in the country which has been oversubscribed by almost 4 times. The excess liquidity in the banking sector, relatively higher rate of return, and risk-free investment as the rate of return is fixed for the next five years have produced huge interest among investors for Sukuk bonds. Despite some apprehensions, introducing Sukuk was a timely initiative by the government. It should encourage the introduction of more bonds of new kinds to meet the long-term financing needs of the country. In a true sense, it is high time for emboldening the private sector, particularly big corporate companies to come forward with the issuance of "sustainable bonds" to raise funds.

Sustainable bonds promote environmental sustainability and the socio-economic development of a country since the funds raised from sustainable bonds are used to support the financing of specific projects related to climate change, environment, or social goals. There has been a surge in sustainable bonds in recent years. Global sustainable investing assets are now valued at more than USD 30 trillion-- an increase of 34 per cent over the last two years. However, the blue bond is the newest member of the sustainable bond family which finances projects related to ocean conservation.

Around 71 per cent of the earth's surface is the ocean. Billions of people rely on the oceans resources for their livings. The annual value of the ocean is estimated to be USD 1.5 trillion per year. Therefore, blue economy is receiving growing importance and gaining momentum amongst policymakers all over the world. In the coming days, innovative financing solutions will be essential to explore the ocean - a significant wealth generator and in this case, blue finance, especially blue bonds, have huge potential. It is anticipated that the success of green bonds in the capital markets will create a blueprint for the nascent blue bond market.

The Republic of Seychelles launched the world's first sovereign blue bond in 2018 to raise a total of USD 15 million to implement the small island state's sustainable blue economy plan. Nordic Investment Bank, the international financial institution of the Nordic and Baltic countries, launched a "Nordic Sea Blue Bond" in January 2019 to raise USD 200 million to protect and rehabilitate the Baltic sea. The fund will be spent on wastewater treatment, prevention of water pollution, and water-related climate change adaptation projects. Moreover, Morgan Stanley, working with the World Bank sold USD 10 million worth of blue bonds in April 2019 intending to solve the challenge of plastic waste pollution in oceans.

Bangladesh has great potentials in respect of the blue economy. The country's coastal and marine ecosystem resources can be used in increasing food security, creating jobs, alleviating poverty, reducing inequality, lifting trade and industrial profiles whilst at the same time conserving biodiversity, protecting the coasts and oceans as well as the health, livelihoods, and welfare of the people in the coastal zone. There are huge scopes for ocean-based economic activities in Bangladesh. Fisheries, shipping, and coastal tourism are the traditional use of coastal and ocean resources in the country while there are also new sectors like offshore gas exploration, salt production, and offshore renewable energy.

Bangladesh has taken initiative for huge industrial expansion in the coastal region including coal power plant, deep-sea port, and LPG-LNG terminal. The blue economy concept features prominently as a policy objective in the country's 8thFive Year Plan and Delta Plan 2100 of Bangladesh to support the country's economic development. To help deliver on the objective, the government established a new department called "Blue Economy Cell" in 2017, with a mandate to coordinate across sectoral ministries to better chart a path toward sustainable development of the ocean resources and answer key questions about the implementation of the medium-term development plans.

The old and new sectors of ocean use have a great prospect for innovation and growth. Nonetheless, estimating the value of the blue economy will be important in realizing its full potential. Unfortunately, there is no accurate estimate on the contribution of ocean-linked economic activities in Bangladesh following the methods prescribed in the System of the National Account (SNA). An estimate shows that the value of the blue economy in Bangladesh was USD 6.2 billion or around 3 per cent of GDP in 2014-15 ((P.G. Patil et al, 2018). This value was derived mainly from tourism and recreation, fisheries and aquaculture, transport, and energy. It seems that the estimate is based on guestimate and as a result, it undervalues the contribution of the blue economy in the country.

Bangladesh will need large investment to promote a sustainable blue economy. Experiences of other countries show that long development financing is served through fixed income securities or bonds. The world has experienced a surge in green or sustainable bonds, in particular, in the last 10 years. With an increase of 34 per cent over the last two years, global sustainable investing assets are now valued at more than USD 30 trillion. However, the country should use blue investments financed through blue bonds -- a relatively new type of sustainable bond at promoting the implementation and achievement of SDGs, specifically SDG 14 (Life below water) and related SDGs (i.e. 1,2, 6, 8, 10, 13, and 15), that contribute to the good governance of the ocean and coastal habitats, deliver long term value to marine and coastal ecosystems, reduce carbon emissions and strengthen resilient livelihoods of people who depend on oceans and their resources in a changing climate. Blue bonds will propound an opportunity to mobilise the private sector capital to support the blue economy.

Recent consultation with the relevant state and non-state stakeholders reveals that Bangladesh will require to emphasise on new innovative financing strategies to engage the private sector in financing the SDGs. In this regard, the blue bond can be an innovative tool to finance public investment in projects related to ocean and marine that will ultimately contribute to environmental sustainability, employment generation, poverty alleviation, and reducing inequality in Bangladesh. Nevertheless, the blue bond is a new concept, and thus, there is a lack of aeareness and expertise in this area. Knowledge products and more discussion will be required to sensitise the relevant stakeholders on this issue to explore the full potential of blue economy in the country.

GED, with support from the "Strengthening Institutional Capacity for SDGs Achievement in Bangladesh (SC4SDG)" project of UNDP Bangladesh and UNEP-PEA4SDGs, has recently conducted an important study on "Assessing the Feasibility of Instituting Blue Bond in the Bond Market of Bangladesh". GED, through this study, has endeavoured to understand the possibility of promoting the blue economy in Bangladesh through the issuance of blue bonds. The blue economy and its prospect, bond market, suitability of bond financing, and likelihood for releasing a blue bond in Bangladesh along with mapping the pathway of releasing such a bond have been evaluated in this study.

The study has attempted to project the value of blue economy in Bangladesh. Since there is no accurate estimate available for Bangladesh and there is a lack of data on the blue economy, it is tough to project the future potentials of blue economy. However, there have been efforts to introduce assessment of the blue economy through developing the "Blue Economy Satellite Account"(BESA) - a method proposed in the SNA. It fits well with the SNA endorsed national account measurements such as the Supply and Use Table (SUT) and Input-Output Table (IOT).

The study has considered three scenarios for the Bangladesh Blue Economy (BBE). They are - BBE will grow at (i) 5 per cent, (ii) 8 per cent, and (iii) 10 per cent rates. Under these three scenarios, projections have been made up to 2035. The calculation shows that the size of BBE can be between USD 12.9 billion to USD 25.9 billion in 2035. The study has also tried to estimate the required investment for the three scenarios since one of the key preconditions of 5 to 10 per cent growth rates of BBE is to invest in the BBE. The results show that Bangladesh will need to invest between USD 2.45 billion to USD 7.22 billion annually during the years 2021-2035.

Harnessing the blue economy is a costly venture and thus, will require a huge investment in projects with time-bound completion and clear outcomes. There is a demand for development financing in Bangladesh. However, the current model of development financing with excessive reliance on the banking sector may not be suitable for long-term investment needs. Thus, Bangladesh must adopt a strategy to mobilise funds through developing fixed-income securities or bonds. In this case, sustainable bonds - for instance blue bonds - should be a priority policy option for Bangladesh.

Several issues need to be addressed to carry forward the plan of a sustainable blue economy through sustainable financing, i.e., blue bonds. Due to the scarcity of data, there should be a comprehensive study on the Bangladesh Blue Economy (BBE) encompassing - setting the BBE vision and goals; defining the scope of the BBE; better valuation of the BBE; firmer projections of the BBE (in conformity with PP 2041 time frame) and additional resource requirements; and exploring financing options including the issuance of the blue bond. There is also a need for awareness and capacity building on the scopes and potentials of blue economy. This is not known to many local investors in Bangladesh. Thus, Bangladesh may conduct a survey on the future of the blue economy covering investors (mainly institutional investors), regulators, policymakers, environmentalists, and researchers. External companies and investors interested in sustainable projects should also be made aware of the potential of the blue economy in Bangladesh. Lastly, Bangladesh should gather first-hand knowledge from Seychelles or Indonesia in the areas of defining the blue economy, assessing the potential, addressing the barriers, and determining the institutional arrangements for promoting the BBE.

(The article is based on a recent study titled "Promoting Sustainable Blue Economy in Bangladesh through Sustainable Blue Bond: Assessing the Feasibility of Instituting Blue Bond in Bangladesh", conducted by GED with the technical and financial support from the SC4SDG project of UNDP Bangladesh and UNEP-PEA.)

Dr Shamsul Alam is Member (Senior Secretary), General Economics Division, Bangladesh Planning Commission.

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Link:

Blue bond an inventive financing solution for blue economy - The Financial Express