LONDON (AlertNet) - This year, Bangladesh will start rolling out an ambitious 10-year action plan to tackle climate change. It covers 37 programmes, ranging from developing crops that thrive better in floods and droughts to strengthening early warning systems for cyclones and building river embankments and storm shelters.

The plan says the country can expect more severe flooding, droughts and cyclones because of global warming. And it warns that up to 8 million of its people may have to be resettled by 2050 if sea-level rise accelerates and coastal defences aren't improved.

In the face of these threats, Bangladesh has identified urgent measures to protect its people and help them live with climate change. But they don't come cheap. The action plan estimates they could cost as much as $5 billion in the first five years.

Last year the government launched a climate change fund with initial financing of $45 million, to which Britain pledged an additional £60 million ($87 million), and invited its development partners to make contributions.

But as the global financial crisis squeezes donor budgets, the billion dollar question facing Bangladesh and other poor countries that need to start adapting fast to climate change is: How much support can they realistically expect?

Quamrul Chowdhury, a Bangladeshi negotiator at U.N. climate talks who helped draw up the action plan, fears funds for tackling climate change will be the first type of aid rich countries slash in the global economic downturn.

HUGE FUNDING GAP

"They will try to offer even less money for a bailout from the global climate crisis as most of them still think it won't affect them much - rather global warming will hit countries like Bangladesh which is not at all their concern," said Chowdhury.

"The least developed countries, including Bangladesh, are already feeling the pinch."

Deirdre Boyd, country director for the United Nations Development Programme (UNDP) in India, agreed the credit crunch could deter rich governments from committing cash.

"We haven't yet seen much of this new money for adaptation and that's the concern," she said. "Will we see it now as a result of the financial crisis?"

Kit Vaughan, an advisor on adaptation at the British branch of the WWF environmental group, isn't optimistic.

"There's a lack of financial availability of money, the tightening up of the global economy, and a lack of anybody wanting to pick up responsibility," he said, adding that poor countries simply couldn't afford to fill the huge gap between what's on offer and what's needed.

U.N. projections are that poor nations will require tens of billions of dollars annually by 2030 to adapt to climate change, but existing funds barely stretch beyond several hundred million dollars per year.

To make matters worse, the main U.N. fund for adaptation has seen its value shrink since the price of carbon credits - on which it depends - tumbled from a record of over 24 euros ($30.50) a tonne last summer.

The Adaptation Fund is financed by a 2 percent levy on the Clean Development Mechanism, a U.N. system of projects that funds greenhouse gas emissions cuts in poor nations.

SHRINKING U.N. FUND

When the fund was launched at U.N. climate change talks in Poland in December, it was estimated to be worth $80 million, but the credits have yet to be turned into cash. Their value has since dropped by more than a quarter to around $58 million as carbon credit prices have declined.

Amid an economic downturn, companies are producing fewer goods - and less pollution - reducing demand for permits to emit carbon. Falling emissions are positive for climate change but also mean businesses and governments need to invest less in green schemes to offset them.

The Adaptation Fund aims to start turning U.N. carbon credits into cash in the next few months, so it can start dishing out money for adaptation projects in the second half of the year. But carbon market experts predict prices for these credits may remain depressed.

"The carbon price is unlikely to recover quickly in the short-term," said WWF's Vaughan. "This is bad as it may encourage high-carbon investments and at the same time reduce funding streams for adaptation, creating a double problem."

Developing countries will push hard for rich nations to put new and predictable funding on the table at U.N. climate talks in Copenhagen in December, when the world is due to agree on a successor agreement to the Kyoto Protocol.

What's becoming less clear as the financial crisis bites is how much they are prepared to offer, and where the money will come from.

NEW SOURCES OF CASH

Brennan Van Dyke, a senior advisor at the Global Environment Facility that administers the Adaptation Fund, said its diminishing size could increase the pressure on rich countries to find other ways of raising money.

"What additional steps are donor countries going to take to help countries adapt?" she said. "This is not supposed to be the only source of funding for adaptation. It might mean that more slack has to be picked up elsewhere."

Yvo de Boer, the executive secretary of the U.N. Framework Convention on Climate Change, told Reuters recently that generating money through taxes wouldn't be attractive to countries like the United States and Britain, which are preoccupied with economic recovery.

Washington may be more interested in innovative sources of financing, including disaster insurance and auctioning of international allowances to emit carbon, said Maria Netto Schneider, a UNDP climate change policy advisor.

But for developing country negotiators like Chowdhury, there is no justice in the way rich economies are pouring hundreds of billions of dollars into their ailing banking systems while stalling on helping the world's most vulnerable people avoid climate catastrophe.

"It is a fait accompli for the poorest of the poor - they deserve drowning for the greatest sins of the wealthy of the most affluent nations," he said.

(Additional reporting by Nita Bhalla in New Delhi)

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