Bangladesh's path to net zero: A moment of urgency and opportunity

Bangladesh, a country on the frontlines of the climate crisis, has long been a voice for justice in global climate negotiations. But at home, the path from policy to action remains uneven—and the time to bridge that gap is now. With global temperatures breaching the 1.5°C threshold more frequently and devastating floods hitting parts of South Asia in recent times, the need for decisive climate action has never been more urgent.

Despite facing rising seas, heatwaves, and cyclones, Bangladesh's commitments to reduce carbon emissions remain aspirational rather than operational. At COP28, Bangladesh reaffirmed its alignment with global climate goals and emphasized the importance of climate finance and adaptation. We have ambitious targets: 40% renewable energy by 2041, energy efficiency improvements across industry and transport, and carbon neutrality in power generation by 2050. And yet, progress has been slow. Today, renewable sources account for just 3% of our electricity mix, while coal and LNG still supply over 60%—stalling the clean energy transition.

What's holding us back? A complex web of financial shortfalls, policy gaps, and institutional inertia.

The recent remarks by the interim government's energy advisor—emphasizing the "need to reassess our energy priorities in line with long-term resilience"—offered a rare but important acknowledgment of this contradiction. Now is the time to act on that recognition.

Unlike India and China, Bangladesh has yet to set a formal net-zero target. Without clear milestones, we risk falling behind in the global shift toward green economies. Committing to a 2050 net-zero target would not only strengthen our climate diplomacy—it would also unlock green investments from development banks and private financiers.

There is another missed opportunity: carbon markets. Global buyers—from tech giants like Microsoft to energy majors like Shell—are actively purchasing high-quality carbon credits. Yet Bangladesh lacks an official carbon trading framework. With immense potential for mangrove restoration, blue carbon initiatives, and afforestation, we are well-positioned to benefit—if we act swiftly to establish robust standards, transparent monitoring systems, and, most importantly, political will.

Bangladesh has expressed interest in cooperative approaches under Article 6.2 of the Paris Agreement (which allows for the transfer of mitigation outcomes between countries) and has begun exploring the necessary institutional and regulatory frameworks. However, the achievements till date is still much lower than expected. 

Equally concerning is the limited involvement of the private sector. ESG (Environmental, Social, and Governance) practices remain largely optional. Unlike Europe, where ESG reporting is mandatory, Bangladeshi companies face no such requirement. While the Dhaka Stock Exchange promotes sustainability reporting, there is no mandatory disclosure regime. Without clear rules and incentives, sustainability risks becoming a checkbox—rather than a strategy. Achieving Sustainable Development Goals or fulfilling commitments under the Paris Agreement is not the job of government alone. Especially in a time of shrinking global aid, the private sector must step up to address sustainability holistically.

Women-led enterprises—often pioneers in clean energy and climate-smart agriculture—remain underserved. Gender-inclusive climate finance is not a luxury; it is essential to building an inclusive green economy. As UN Women highlighted recently, "gender equity is one of the most underutilized solutions to the climate crisis."

Yet for all the gaps, the potential is enormous. Bangladesh has over 50,000 MW of solar potential and 30,000 MW in wind. Our waste-to-energy sector remains largely untapped, even as cities like Dhaka generate more than 6,000 tons of waste daily. The ready-made garments (RMG) sector, home to more LEED-certified green factories than anywhere in the world, could become the first net-zero RMG hub globally—if backed by the right policies and access to finance.

To realize this vision, we must act on several fronts.

And yet, we continue to miss critical moments. The much-talked-about Bangladesh Investment Summit, held recently, offered a global platform to showcase the country's economic ambitions. But conversations around sustainability, climate resilience, or green investment potential were noticeably absent. This was a missed opportunity—one that could have positioned Bangladesh not just as an emerging economy, but as a sustainable business hub where enterprises generate carbon credits, attract impact investment, and lead in ESG innovation.

First, the interim government must fast-track a national net-zero roadmap, with clear targets for power, transport, and industry. This will provide certainty to investors and demonstrate alignment with global climate goals.

Second, Bangladesh should pilot voluntary carbon markets and develop MRV (Monitoring, Reporting, and Verification) systems to support emissions offsets from nature-based projects.

Third, ESG reporting must be made mandatory for listed companies, particularly in high-emission sectors like garments, energy, and finance. This will enhance transparency and help attract impact investors seeking credible sustainability data.

Finally, we must address the financing gap. Bangladesh allocates approximately $1.2 billion annually to climate action, yet our actual need stands at around $8.5 billion per year. This shortfall won't close without private capital. To mobilize it, we must improve governance, reduce regulatory uncertainty, and scale up tools like green bonds and blended finance.

This is not just an environmental imperative—it is an economic one. As global supply chains decarbonize and ESG regulations tighten, Bangladeshi businesses that fail to adapt risk being locked out of future markets.

The current transitional period under the interim government offers a rare window for reform—unbound by political cycles. It is a chance to prioritize long-term sustainability over short-term fixes. As climate threats intensify, we cannot afford to stand still.

Bangladesh has the knowledge, ambition, and capacity to lead in climate innovation. What we need now is the courage to act—decisively and inclusively.

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