Bangladesh’s climate debt crisis deepens, warns new index
Bangladesh has been ranked among the world's most climate-vulnerable yet climate-indebted nations, according to the Climate Debt Risk Index (CDRI-2025) released by Change Initiative.
With a national risk score of 65.37 out of 100—set to rise to 65.63 by 2031—the country now falls into the "High Risk" category, highlighting a dangerous trajectory unless urgent reforms in global climate finance are made.
Despite contributing less than 0.5 per cent of global greenhouse gas emissions, Bangladesh carries one of the world's highest per-capita climate debts at USD 79.6. Its debt-to-grant ratio stands at 2.7—almost four times the least developed country (LDC) benchmark of 0.7—while the multilateral climate loan ratio of 0.94 is nearly five times higher than the LDC average of 0.19.
Keep updated, follow The Business Standard's Google news channel
The report warns of chronic underfunding for adaptation, with the adaptation-to-mitigation ratio at only 0.42 compared to the LDC average of 0.88. This imbalance, it says, undermines life-saving resilience initiatives.
"Protecting biodiversity can reduce climate impacts, yet global forums like COP often fail to deliver results," said Dr Farhina Ahmed, Secretary, Ministry of Environment, Forest and Climate Change. "Bangladesh must respond by prioritising adaptation plans and NDC implementation, while demanding climate justice."
Key findings for Bangladesh:
- Per capita climate debt: USD 79.6 – among the highest in LDCs
- Debt-to-grant ratio: 2.7 – nearly four times the LDC average
- Multilateral climate loan ratio: 0.94 – vs. 0.19 LDC average
- Adaptation-to-mitigation ratio: 0.42 – less than half of the LDC average
- Loan burden per tonne of CO2e: USD 29.52 – contradicting the polluter pays principle
- 18.84 per cent of "climate finance" misattributed to fossil fuel projects, with a loan-to-grant ratio of 28.8:1
Sectoral analysis shows energy (loan-to-grant ratio 11.99:1), transport and storage (1123:1), and water supply (7.78:1) are heavily debt-financed, while critical sectors such as agriculture, health and disaster preparedness remain underfunded.
"Grants are limited, loans risky, and overreliance on the private sector heightens financial strain," warned Dr A K Enamul Haque, Director General of BIDS. "True resilience demands local knowledge, technology, and systemic change -incremental fixes are not enough."
The report also shows the household burden is rising between 2000 and 2023, climate hazards displaced or affected 130 million Bangladeshis, causing USD 13.6 billion in losses. In the absence of adequate public support, households now spend on average BDT 10,700 (USD 88) annually on self-financed climate protection—totalling USD 1.7 billion a year.
"Adaptation finance must be grant-based and equitable, or the world risks a climate debt crisis where survival becomes unaffordable," said Dr Fazle Rabbi Sadeque Ahmed, Deputy Managing Director, PKSF.
Change Initiative calls for a just climate finance system, based on a grant-first approach for adaptation and loss and damage, climate debt relief through debt-for-nature swaps, transparent finance classifications, a bottom-up Earth Solidarity Fund for community grants, and reforms to multilateral development banks to end fossil fuel support.
"Bangladesh contributes little to global emissions yet suffers disproportionately," said Dr Saimun Parvez, Special Assistant to Chairperson, BNP. "We must move from loans to justice—this is the time to end climate debt and usher in climate equity."
