Climate finance: A structural injustice for Bangladesh

Bangladesh is encountering a structural injustice in the name of climate finance as the country along with other vulnerable nations are being asked to borrow for survival against a crisis they did not cause. This is observed by M. Zakir Hossain Khan, Architect and Proponent of Natural Rights Led Governance who is also Co-founder and Chief Executive, Change Initiativef, Nature Insights in an exclusive interview with Shahnaj Begum of the Daily Observer

DO: The role of the GCF has been disappointing, as it has created debt-repayment burdens on climate-affected countries like Bangladesh. How can Bangladesh extricate itself from this situation?
M. Zakir Hossain: The issue is not only the Green Climate Fund; it is the wider climate-finance architecture. Climate-vulnerable countries were promised support for a crisis they did not create, but too much of that support has arrived as repayable finance. For Bangladesh, this is especially problematic because climate finance should strengthen resilience, not add another layer of sovereign debt.

Bangladesh should not withdraw from global climate funds, but it must change the terms of engagement. Adaptation, loss and damage, ecosystem protection and community resilience should be financed primarily through grants, not loans. Change Initiative’s Climate Debt Risk Index (CDRI) shows that Bangladesh’s overall climate-finance debt-to-grant ratio is 2.7, compared with a global average of 0.7. The energy sector is more alarming: about USD 2.54 billion has been allocated as climate finance for energy.

The way out is a three-track strategy: first, renegotiate and avoid non-concessional or weakly concessional climate loans; second, demand grant-based finance for adaptation and loss and damage as a matter of climate justice; and third, build Bangladesh’s own energy sovereignty through decentralized, nature-smart renewable energy, rooftop solar, solar irrigation, storage, efficiency and community-owned systems that reduce dependence on imported fossil fuels and debt-financed infrastructure.

DO; Climate debt has been accumulating in Bangladesh’s name in a manner that is alarming and unjust, especially considering the country’s minimal contribution to global emissions. How do you describe this situation?
M. Zakir Hossain: I describe it as a structural injustice in the name of climate finance. Bangladesh and other vulnerable countries are being asked to borrow for survival against a crisis they did not cause. That is not climate justice; it is a transfer of climate risk from historical emitters to climate victims.
In Bangladesh’s case, the risk is measurable. Change Initiative’s CDRI identified Bangladesh in the High Risk climate-debt category, with a score of 65.37. It also estimates Bangladesh’s cumulative per-capita climate debt at USD 79.61, far above the weighted global average of USD 23.12. This means vulnerable people pay twice: first through cyclones, floods, salinity, heat stress and livelihood loss; then again through public debt repayment.
This is not merely a financing problem. It is a moral and governance failure.
 
DO: Developed countries have refused to take full responsibility for climate damages, leaving vulnerable nations including Bangladesh saddled with debt. Is this acceptable? If not, what should they do?
M. Zakir Hossain: It is not acceptable, deviation from their own commitment made under the UNFCCC in 1994 to provide funds to the vulnerable developing countries under the polluters pay principle. Climate finance cannot be treated as charity, diplomatic tool or opportunity for market expansion. For historically high-emitting countries, it is a responsibility arising from accumulated irreversible ecological damages left intergenerational injustice.
The injustice is clearest in the case of LDCs, 46 nations together, with around 1.1 billion people, contribute only about 3.3% of global emissions, yet they suffer disproportionate climate-related losses and deaths. At the same time, LDC debt service has risen sharply, from about USD 10 billion in 2011 to USD 33 billion in 2019, while external debt service reached around USD 50 billion in 2021.Developed countries should move from pledge-based politics to obligation-based finance. 

DO: TIB Executive Director Iftekharuzzaman reportedly said that “there is no accountability infrastructure in the fund,” and raised concerns about policy violation, discrimination and irregularities. How do you view this issue?
M. Zakir Hossain: The concern is aligned with the long demand from global CSOs and experts for democratization as well as decentralized time bound direct funding for the communities in time. However, it is important to be precise, the problem is not only corruption in the narrow sense; it is also an accountability, access and governance deficit in the climate-finance system, sourced from not having universal definition of climate finance yet. Moreover, UNFCCC focused mostly on finance amounts rather than the quality of climate funding.  
Large climate funds often rely heavily on international intermediaries such as UN agencies, multilateral development banks and international financial institutions. This can weaken direct access, slow delivery and reduce national and local ownership. Complex accreditation rules also make it difficult for national institutions and community-level actors to access finance directly. Bangladesh should respond by strengthening transparency at home as well. We need a one-stop public climate-finance and carbon-market platform.

DO: Bangladesh created the Bangladesh Climate Change Trust Fund as a pioneering domestic initiative. How do you explain its role? Is it sufficient without international aid?
M. Zakir Hossain: The Bangladesh Climate Change Trust Fund is important because it shows national ownership. It proves that Bangladesh has not waited passively for international finance. It has tried to use domestic resources to address adaptation and resilience. Bangladesh spends around $4 billion on climate related projects annually. 
But BCCTF cannot carry on a global crisis alone. Bangladesh’s National Adaptation Plan requires about USD 230 billion for 2023-2050, or more than USD 8 billion per year, with roughly USD 6 billion per year expected from international sources. Yet between 2002 and 2023, Bangladesh secured only about USD 1.41 billion for adaptation, less than 1% of projected adaptation needs.

DO: Is there any broader issue that must now be discussed?
M. Zakir Hossain: The most urgent issue is that climate finance must move from a system of voluntary pledges to a system of enforceable responsibility. The world cannot solve climate breakdowns with delayed promises, debt-creating instruments and fragmented projects. This means three things. First, adaptation and loss-and-damage finance must be nature justice-driven NDC driven grant-based annual allocations, timebound and holistic finance prioritized community stewardship model. Second, mitigation finance must support Nature-Smart Energy, rooftop solar, community-owned renewables, storage, grid flexibility, clean cooking and decentralized systems, without land grabbing, biodiversity loss or water stress. Third, biodiversity finance must be treated as core public infrastructure investment, not a decorative environmental expense. The guiding principle should be simple: justice over pledges. Climate finance must serve vulnerable people, future generations and nature itself, not reproduce the same debt dependency and ecological damage that created the crisis.