The urgent need for climate economy

Bangladesh stands at a defining moment in its economic transition. As climate change intensifies environmental stresses, the global economy is rapidly reorganising around sustainability, resilience, and low-carbon growth. For a climate-vulnerable nation like Bangladesh, shifting towards a climate economy is not merely an environmental obligation but an economic necessity. This transition opens pathways for new industries, green jobs, renewable energy expansion, and participation in global carbon markets. Yet it also presents serious risks, especially the growing concern over "greenwashing," where environmentally harmful practices are disguised under the language of sustainability. Understanding these dynamics is crucial for shaping Bangladesh's next phase of economic development.

The rise of green jobs is one of the most promising dimensions of the climate economy. As countries invest more in renewable energy, sustainable agriculture, waste management, and climate-resilient infrastructure, employment opportunities emerge across both high-skilled and labour-intensive sectors. Bangladesh has already seen early signs of this shift. Solar home systems in rural areas, rooftop solar in cities, biogas production, recycling industries, and improved cookstove programmes have created thousands of new jobs. Expanding these sectors can absorb a significant portion of the young workforce entering the labour market each year. Green jobs are not only environmentally beneficial; they also promote safer working conditions and future-ready skills. But this potential can only be realised if vocational training systems, technical institutions, and private investment are aligned with long-term sustainability goals.

Renewable energy is another cornerstone of the climate economy, and Bangladesh has set ambitious targets. The country hopes to generate a larger share of its electricity from solar, wind, hydro, and waste-to-energy sources. Solar power offers the most incredible opportunity, especially given the declining costs of photovoltaic technology and the abundance of suitable land in certain regions. Bangladesh's Solar Home System programme remains one of the largest in the world. However, scaling up urban solar roofs, large-scale solar parks, and floating solar farms requires regulatory reforms, land-use planning, and incentives for private-sector participation. Wind energy also holds potential in coastal zones, but it demands advanced mapping, grid upgrades, and stable policy frameworks. Achieving energy diversification is not only an environmental goal but also a way to reduce dependence on fossil fuel imports and ensure long-term energy security.

The emergence of carbon markets opens an entirely new economic frontier for Bangladesh. With the global shift toward net-zero commitments, countries and companies are increasingly buying carbon credits from nations that can reduce emissions or preserve natural ecosystems. Bangladesh's vast mangrove forests, wetlands, and agricultural practices provide opportunities for carbon sequestration and emissions reduction projects. Participation in voluntary carbon markets could attract foreign investment for reforestation, sustainable agriculture, and improved land management. But carbon markets require transparent measurement, verification, and compliance frameworks. Without strong governance, they risk becoming revenue sources that benefit only intermediaries, not local communities. For carbon markets to be credible, Bangladesh must establish strict monitoring systems, ensure community participation, and prioritise environmental integrity over short-term financial gains.

Ensuring credibility in the climate economy requires robust regulatory frameworks. Bangladesh Bank's green banking guidelines, environmental clearance processes, and renewable energy policies are essential steps, but enforcement remains inconsistent. Strengthening ecological governance means improving monitoring capacity, expanding data transparency, and holding industries accountable for pollution and emissions. Public reporting requirements, independent audits, and citizen-driven oversight can reduce the risk of greenwashing. Strong climate legislation-especially in areas like waste management, energy efficiency, and environmental reporting-will be essential for ensuring that the climate economy becomes a fundamental economic transformation, not a branding exercise.

The transition to a climate economy is ultimately inseparable from social justice. Green growth strategies must ensure that low-income groups benefit rather than bear the costs. Workers in polluting sectors may need retraining to enter green industries. Farmers shifting to climate-smart agriculture require access to credit, knowledge, and markets. Urban residents need affordable, low-carbon transport options. Communities hosting renewable energy projects must receive fair compensation and long-term benefits. The climate economy cannot succeed if it deepens inequality or marginalises those already vulnerable.