Financing nature: Sustainable solutions for biodiversity conservation in Bangladesh

Bangladesh is endowed with rich biodiversity, including the Sundarbans—the world's largest mangrove forest—along with diverse wetlands, coastal and marine ecosystems, hill forests, and agro-ecosystems. Home to thousands of plant species and a wide array of animal life, including migratory birds, this biodiversity supports vital ecosystem services such as carbon sequestration, flood control, and livelihoods for millions. However, these natural assets face mounting threats from deforestation, pollution, unregulated tourism, climate change, and unplanned development. 

As we mark the International Day for Biological Diversity under the theme "Harmony with Nature and Sustainable Development", we are reminded of the urgent need to protect and restore our ecosystems, invest in nature, and ensure a sustainable future where both people and the planet can thrive in balance. 

One of the most pressing barriers to effective biodiversity and nature conservation in Bangladesh is the persistent lack of adequate and sustained financing. Current funding mechanisms are fragmented, often short-term, and heavily reliant on donor support. This approach limits the scale, scope, and sustainability of conservation efforts.

The global biodiversity finance gap stands at an estimated $700 billion annually, with current spending falling far short at only $120–$150 billion—primarily from public sources. To meet the targets of the Global Biodiversity Framework, annual investments of around $800–850 billion are required. In Bangladesh, approximately $82 million was invested in biodiversity conservation through the Ministry of Environment, Forest and Climate Change (MoEFCC) between 2015 and 2019. 

However, the Country Investment Plan for Environment, Forestry and Climate Change (2016–2021) identified a need of $2.46 billion for biodiversity and natural resource management, revealing a significant funding gap of $1.82 billion (74%). Targeted conservation plans have been developed for key species, including vultures, tigers, elephants, and dolphins, with dedicated budgets. Bangladesh has benefitted from an $8.5 million debt-for-nature swap with support from the United States, converting debt into conservation funding.

Challenges in biodiversity financing

Several structural and systemic challenges hinder effective biodiversity financing in Bangladesh. Public investment in conservation remains limited, with existing budget allocations to forest and environment-related departments falling short of the long-term needs for ecosystem restoration and protection. 

At the same time, heavy reliance on donor funding—often tied to short-term, project-based initiatives—means that many conservation efforts lack continuity once external funding ends. This approach hampers the ability to sustain and scale successful initiatives over time, as successful ecosystem restoration needs decades.

One of the most pressing barriers to effective biodiversity and nature conservation in Bangladesh is the persistent lack of adequate and sustained financing. Current funding mechanisms are fragmented, often short-term, and heavily reliant on donor support. This approach limits the scale, scope, and sustainability of conservation efforts.

Moreover, private sector participation in biodiversity finance is minimal, largely due to unclear policy incentives and the perception of low financial returns. The absence of innovative financial instruments, such as green bonds, biodiversity offsets, payment for ecosystem services and conservation trust funds, further restricts the mobilisation of long-term funding. 

Compounding these issues is weak institutional coordination among government ministries and agencies, leading to fragmented efforts, inefficiencies, and a lack of strategic investment aligned with national conservation priorities. Addressing these barriers and reviewing biodiversity expenditure is essential to build a resilient and sustainable financing framework for nature.

Global solutions for biodiversity financing

As part of the UNDP-led BIOFIN, several countries have successfully implemented innovative and sustainable financing solutions to bridge biodiversity funding gaps. For example, the Philippines introduced environmental user fees and leveraged ecotourism revenues in protected areas like the Tubbataha Reefs to support conservation efforts. 

Mexico expanded its Payment for Ecosystem Services (PES) programme, compensating landowners for forest conservation through water fees, benefiting both biodiversity and local livelihoods. In Indonesia, biodiversity budget tagging has been used to track and align public spending with conservation priorities, enhancing transparency and effectiveness. 

Bhutan established the Bhutan for Life fund—a pioneering public-private partnership that provides long-term financing for its protected areas through a mix of donor, government, and private contributions. 

Sri Lanka has implemented innovative financing solutions to bridge biodiversity funding gaps by introducing biodiversity budget tagging, which enables the government to identify, track, and better allocate public expenditures for conservation across ministries. 

Uganda explored the use of environmental fiscal reforms, including introducing fees and levies on natural resource use, to generate dedicated revenue streams for biodiversity. 

These cases demonstrate how tailored, country-specific financial strategies—supported by BIOFIN—can effectively mobilise resources, mainstream biodiversity into public policy programmes and ensure sustainable conservation outcomes.

Proposed innovative biodiversity financing solutions for Bangladesh

Bangladesh's biodiversity plays a critical role in ensuring food security, climate resilience, livelihood support and human well-being, yet it remains significantly underfunded. 

To address this gap, the country must develop a comprehensive National Biodiversity Finance Plan, supported by a biodiversity expenditure and institutional review, building on the ongoing UNDP-supported BIOFIN initiative. This plan should assess current financial flows, identify funding gaps, challenges, and capacity needs, and prioritise investments. 

Establishing a National Biodiversity Conservation Trust Fund—drawing from government budgets, international donors, CSR contributions, and ecotourism revenues—would help secure long-term, predictable financing for conservation. In fact, there is a provision in the ECA Management Rule 2016 to create and manage an "Ecosystem Management Fund".

Innovative green fiscal policies such as environmental taxes, user fees, and biodiversity credits can generate new, dedicated revenue streams. Engaging the private sector through incentives like tax breaks, mandatory biodiversity offsets, and partnerships in ecotourism or afforestation/reforestation can also unlock additional capital. Aligning biodiversity efforts with climate objectives offers access to international climate finance sources, such as the Green Climate Fund, particularly for large-scale ecosystem restoration.

Empowering indigenous people and local communities through co-management models and access to green microfinance can ensure conservation benefits for both nature and livelihoods. Strengthening institutional coordination across government, NGOs, and development partners is crucial for transparency, efficiency, and strategic financing. 

A national coordination body or platform for nature conservation would facilitate this integration. This is a credible initiative, as Bangladesh has set 23 National Targets this year aligned with the Global Biodiversity Framework. 

Notably, Target 19 focuses on developing a National Biodiversity Finance Plan and a Biodiversity Fiscal Framework to secure adequate financial resources—from public, private, international, and innovative sources—to support the effective implementation of the National Biodiversity Strategy and Action Plan (NBSAP). Bangladesh can further enhance biodiversity finance by adopting a trust fund model inspired by countries like Sri Lanka, Uganda, Bhutan, and Costa Rica. 

This includes biodiversity budget tagging, ecotourism revenue sharing, repurposing harmful subsidies, and mobilising private sector investment. 

The recent launch of the "Umbrella Programme to Support Development of Biodiversity Finance Plans" by UNDP and the Ministry of Environment, Forest and Climate Change marks a pivotal step toward a more sustainable, coordinated, and impactful biodiversity financing system in Bangladesh

A call to action

Nature conservation is not a cost; it is an investment in the country's long-term development, health, climate resilience and human well-being. The Covid-19 pandemic and recent climate-related disasters have shown how fragile our human and ecological systems are when natural capital is degraded. With the right policies and financial innovations, Bangladesh has the opportunity to lead the region in developing a robust, inclusive, and sustainable biodiversity finance plan.

To safeguard our natural heritage for future generations, we must act now—with vision, collaboration, and strong political commitment. Financing nature is not just an environmental imperative—it is a national priority.

Arif Muhammad Faisal is working with UNDP Bangladesh. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of his employer or The Business Standard.